Senator SMATHERS. Mr. John W. Edelman and Mr. William R. Hutton, president and executive director, National Council of Senior Citizens, and Mr. Frank Wallick.

We are delighted to have you gentlemen here, as is always the case. You may proceed as you like.

STATEMENTS OF JOHN W. EDELMAN, PRESIDENT, AND WILLIAM R. HUTTON, EXECUTIVE DIRECTOR, NATIONAL COUNCIL OF SENIOR CITIZENS; AND FRANK WALLICK, LEGISLATIVE STAFF OF THE INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE & AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, UAW

Mr. EDELMAN. Mr. Chairman, in case you have not met them already this is Frank Wallick of the legislative staff of the international union, United Automobile, Aerospace & Agricultural Implement Workers of America, UAW, who is testifying here today on behalf of Mr. Andrew Brown who is in charge of the retirees' section of his organization. On my left is Mr. William R. Hutton, executive director, National Council of Senior Citizens, who will in great measure carry the burden of this testimony. I will make a very brief statement.

I am John W. Edelman, president of the National Council of Senior Citizens, an organization comprising roughly 2 million members dedicated to building a better life for all the elderly in this country.

I mention in passing, sir, that I am also a "victim witness" in this instance. I have had two spells in the hospital as a patient under medicare program.

We of the National Council of Senior Citizens welcome the attention being focused on health needs of the elderly by the distinguished members of the subcommittee. We appreciate the wealth of knowledge and experience being brought to bear on this problem by the chairman, Senator Smathers.

Senator SMATHERS. Thank you very much.

May I say here that looking at you after you have had those two experiences in the hospital it is evident that you are getting quality medicine.

Mr. EDELMAN. Thank you, sir. I think that is exactly true.

As you must know, our organization was in the forefront of the legislative campaign for medicare and medicaid and our members are profoundly grateful to the Senators and Members of the House of Representatives responsible for enactment of this monumental legislation guaranteeing 19,300,000 who are over 65 hospital care up to 90 days for a spell of illness and 17,600,000 of this group who signed up for optional medicare doctor insurance payment of a major portion

of their doctor and medical bills.

This has resulted in a tremendous upgrading of medical care available to the elderly. However, I must in all honesty remind the distinguished subcommittee members great numbers of elderly are being excluded from the benefits of medicare and medicaid. Those being excluded are the ones most in need of adequate health care.

There are no reliable estimates I know of as to the number of elderly thus excluded from medicare and medicaid benefits but the number may run into millions.

WIDESPREAD POVERTY AMONG ELDERLY

Secretary John W. Gardner, of the U.S. Department of Health, Education, and Welfare, told the recent annual convention of the National Council of Senior Citizens in Washington that nearly 10 million, or nearly half those 65 or over, are poor.

They are poor, Mr. Chairman and distinguished members of the subcommittee, largely because they have to depend on inadequate social security benefits for their support.

Now, I ask the subcommittee members, can anyone getting social security averaging $84 a month-that is a meager $1,008 a year-find cash for the $40 payment required for hospital admission, the $50 downpayment required on doctor bills, the obligation to pay a fifth of remaining doctor bills, and the $20 payment required for outpatient diagnostic care under medicare?

We just simply think this is impossible for a great many of the persons eligible for medicare simply on the grounds of inadequate income. Senator SMATHERS. It is obvious by your statement but I just wanted to connect this up with your previous statement that there is a large number who are not eligible to get the benefits of the medicare and medicaid programs.

Mr. EDELMAN. That is correct, sir.

Senator SMATHERS. Because of the deductible.

Mr. EDELMAN. That is our view.

Senator SMATHERS. Very well.

Mr. EDELMAN. For vast numbers of the elderly, a ride costing 50 cents for a trip downtown is a luxury they can scarcely afford. Where will they find the cash to meet these costly medicare deductibles?

FOOD OR HEALTH CARE

Undoubtedly, many of the 1,700,000 elderly who refused to buy medicare's $3-a-month doctor insurance did so because they realize they cannot meet these high-priced deductibles. They had a grim choice between having something to eat and getting health care they might need but could not afford.

Just on this point, Mr. Chairman, could I mention that I got a letter the other day from a social security beneficiary in Philadelphia. She was telling me her only means of support is a social security monthly benefit of approximately, I think, $34 a month. And of this money she is now receiving, $3 of course is being deducted, so actually all her income is about $31 a month. She said she has been going to the doctor for some relief for a nervous condition and he has been prescribing to her certain pills, she said, which makes things worse. She writes to me Mr. Chairman, this is a terrible tragedy-saying, "How can I get out of having to pay this $3 which I was told would benefit me so that I could use this $3 for food which I know would benefit me?" I felt under obligation to write to her and explain what the law says about this situation. It will take her some little time, I believe this October, before she has an opportunity to withdraw from this program. I pointed out to her I thought it would be disastrous if she would render herself ineligible for these medical benefits.

True, medicaid, the health care program for the medically indigent, supplies cash for medicare deductibles in 28 States if-and that's a big

if applicants submit to a means test. But what of the elderly in the 21 States that do not have medicaid?

Even in the States with medicaid, I am sure there are many elderly who proudly undergo great privation rather than submit to a means test. These are men and women who were most of them self-supporting until excluded from the labor force on account of age.

Upon leaving gainful employment, they were forced to join that other America, described by Michael Harrington, an America of poverty, deprivation, and disease.

A year's experience with medicare and medicaid shows that medicare and medicaid have bypassed a great many men and women they were designed to help.

What can be done?

DEDUCTIBLES, DRUGS CAUSE PROBLEMS

We of the National Council of Senior Citizens urge with all emphasis at our command a phasing out of the medicare deductibles. The way it is now, with deductibles and other restrictive medicare features, we offer the elderly modern health care with one hand and snatch it with the other.

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Even with the increase in social security now being considered, the medicare deductibles will remain a barrier to adequate health care for large numbers of older Americans.

Proper health care takes in vision, hearing and dentistry. Yet, medicare excludes eyeglasses, hearing aids and dental care. These items must be covered if we are really going to bring modern health care to the elderly poor.

The exorbitant prices often charged for drugs are another obstacle in the way of modern health care for the elderly. Drugs the elderly must buy-four out of five elderly have chronic ailments should be brought under the medicare umbrella.

Who will pay for these improvements?

We of the National Council of Senior Citizens insist our prosperous land can and should pay for them out of general taxation, generally income taxes.

I am glad to note that the Health, Education, and Welfare Department has called a conference for June 26 and 27 in Washington to discuss these critical matters.

My colleague, Bill Hutton, executive director of the National Council of Senior Citizens, is close to the problems of rising health care costs. Daily, he and I see desperate letters from our members telling of their medicare problems. I would very much like to have him present his observations to the subcommittee. I thank you for the privilege of appearing before you.

Senator SMATHERS. Thank you, Mr. Edelman, for that splendid statement. We are happy that you are back feeling well and could make it. That is a fine statement.

Mr. Hutton, you may proceed.

STATEMENT BY MR. WILLIAM R. HUTTON

Mr. HUTTON. Senator Smathers, members of the National Council of Senior Citizens do not spare themselves in recognizing that medi

care and medicaid are doing more to break down the barriers to adequate medical care for older people than any other steps that have been taken in the history of American medicine and in the history of our social legislation.

But it is precisely because we believe that the organization and delivery of medical services to every American citizen may be changed dramatically by the impact of these programs that we are glad to submit the following observations.

Through its enactment of the Social Security Amendments of 1965 which included these important health programs, the U.S. Congress clearly recognized that the problems of medical care for the aged are more severe than for other age groups.

Though we are intensely grateful to Congress for the enactment of these programs, we have had plenty of opportunity during a full year of their operation to realize where they fall far short of the minimum that is needed to make good health a reality for many aged citizens.

Nevertheless, we want to emphasize that in our goal to seek a better life for all older Americans the National Council of Senior Citizens is extremely conscious of the national interest. This concept of seeking improvements for the elderly within the framework of the national interest is one, Mr. Chairman, which has brought recognition of our organization by the Members of this Congress as a responsible voice of the elderly people of America.

"RUNAWAY COSTS" OF SERVICES

We are desperately concerned about the health care needs of the elderly. We are just as desperately concerned with unnecessary, unrealistic, "runaway costs" which are forcing up the price of health care, not only to elderly people themselves, but for their sons and daughters and for their grandchildren.

Ever since the spring of 1965-when it became clear that medicare was going to be enacted-the National Council of Senior Citizens has been warning Congress that soaring hospital costs and spiraling doctor fees pose a dangerous threat to the program.

We believe quite sincerely that this is currently an economic threat and not a political one. Something must be done to halt the rate of health cost increases. We must work to control costs and improve efficiency without sacrificing the quality of care. While to some degree this calls for the understanding and cooperation of the people who will use the care, it calls more seriously we believe, for restraint and judgment by those doctors who are willfully and flagrantly raising their fees on the theory that "Uncle Sam can afford it" or who are inflating their fees because a patient happens to be privately insured.

It is understandable that some hospitals which are belatedly meeting staff demands for needed increased wages are having to meet higher costs. It is also clear that there are wasteful and extravagant practices in many of our health institutions. Inside and outside of Government there is a great need for built-in incentives to control costs.

Mr. Chairman, in your Senate statement on June 7 announcing these hearings, you asked a number of questions to stimulate discussion con

cerning the organization of our medical services as they affect the elderly. I would like to group several of our observations under the topics prescribed by these questions.

Do many of our elderly face insuperable obstacles in obtaining needed health services?

I know that the committees of Congress appreciate the tremendous difficulties we experience in gathering accurate data on the invisible poor. As President Johnson pointed out in his message to Congress on social security, there are 5.3 million older Americans living in the squalor of poverty and obviously it is difficult, if not impossible, for many of them to meet the deductibles and coinsurance features of the medical law. The leaders of our over 2,000 affiliated clubs have told us they believe there are many older Americans in their communities who will not go to a doctor because of their lack of money.

Many aged sick would rather suffer in silence than admit they cannot produce the $40 for the first day of hospitalization, the initial $50 for doctor bills, or subsequent one-fifth of all doctor costs as coinsurance for medical insurance.

ONLY 29 STATES HAVE MEDICAID

The people I am talking about, Mr. Chairman, include many proud Americans whose sweat and toil helped to make this country great. They don't wish to admit their failure by throwing themselves on the mercy of the welfare people and taking advantage of medicaid. It might be pointed out here, however, as it has been by Mr. Edelman, that only 29 or our 50 States have medicaid programs in operation. Elderly poor in 21 States are out of luck insofar as meeting the deductibles and coinsurance features of medicare are concerned even if they are prepared, in their desperation, to go the welfare route.

The truth is that the deductible and coinsurance features of the medicare program merely discriminate against the elderly poor who need the most help. Any hospital administrator will tell you that deductibles and coinsurance are not necessary to control utilization and they certainly will not control abuses. People with plenty of money never have much difficulty getting into a hospital.

Frankly, the National Council of Senior Citizens fought against the inclusion of deductibles in the original King-Anderson bill, and after 1 year of their operation in the medicare program we are even more convinced that we were right.

Our medicare program is a program of social insurance but the use of deductibles and coinsurance comes strictly from the practice and thinking in commercial casualty insurance. The basic concept of fire, auto, marine, et cetera, insurance is the pooling of risks to protect against loss from undesirable and often preventable accidents. The deductible is promoted as a guard against carelessness or paying the consequences.

But in today's world everyone requires health services. Modern medicine embraces preventive care and health maintenance as essential elements. The casualty insurance concept simply does not fit in a medicare program established as an element of our social insurance system.