might well examine the decisions being made in the light of future problems and acceptable public policy. In addition, good cause for leaving a job should not be limited to causes "attributable to the employer"; recognition should be given to good personal reasons. As long as the worker is available for work, good personal reasons for quitting a job are just as valid as reasons attributable to employers. The administrators of the 18 State laws containing such provisions should examine the implications of decisions they must make on mobility of labor, economic freedom of the individual, and compensation for involuntary unemployment. Disqualification provisions should not be used to prevent individuals from relocating in new communities or attempting to better themselves by trying for more desirable jobs.

Lastly, the special causes of disqualifications, such as disqualifications of women who get married, or because of pregnancy, which have been written into many State statutes, should be removed or modified so such cases could be handled by State administrative action, which appraises all the circumstances surrounding the individual case. While the elimination of such disqualifications from the statutes will increase the administrative burden on the State agencies, it will eliminate the inequitable treatment that now exists and will fulfill the function of compensating bona fide unemployment of individuals who are in fact able and willing to work and available for work.

In unemployment insurance a claimant's ability to work, availability for work, and refusal of suitable work are based on a weighing of various factors which are not always readily determinable and rest ultimately on sound, informed judgment. Yet a State agency in making these determinations must be certain that persons genuinely unemployed are declared eligible for benefits, and only persons who are not genuinely unemployed are declared ineligible. The fact that there are unfilled jobs in the community does not mean that workers should automatically be denied benefits. The existence of unfilled jobs while individuals are claiming

benefits is inevitable in a free enterprise system but does unquestionably present a situation that should be investigated to see if the characteristics of claimants match the specifications of the offered jobs. Where it is not possible to match jobs and applicants, unemployment insurance should perform its function of tiding workers over their periods of unemployment.

State agency concern about the phenomenon of unfilled jobs and claimants drawing benefits has recently taken the form of consideration of the extent to which claimants are "actively seeking work" on their own initiative. Translation of such concern into a general requirement that all claimants affirmatively establish that they are actively seeking work in addition to registering for work with the employment service would be administratively unwise since it provides too mechanical a measure of an individual's availability for work, which must be determined by a weighing of all the facts. Such a general requirement could easily result in rewarding the "chiseler" while punishing the unemployed individual who has canvassed the labor-market situation and knows about prospects for employment. Thus a claimant who persists in looking for work as a welder in areas where no welding is done is not proving his availability by his search for this type of work, nor is the claimant who knows that a plant where his skills are needed will open soon proving unavailability by the fact that he is not looking for other work. British experience with such a general requirement has proved that it not only fails to accomplish its purpose but places an unjustified burden on unemployed workers and on employers.

Some of the severe disqualification provisions have been included in State unemployment insurance laws because employers have questioned the reasonableness of having certain benefits charged to their accounts for experience-rating purposes. In some situations, the employer may in no way be responsible for the unemployment of a former worker who is entitled to benefits. For example, the last employer is not responsible if a worker had good personal reasons for a voluntary quit, nor is a base-period

employer responsible for the unemployment of a worker who has quit another employer, been disqualified, and still remains unemployed. Restrictive disqualification provisions are not necessary to prevent the charging of benefits paid under these and similar conditions. We have pointed out that all benefits need not be charged to employers' accounts provided that the benefits charged assure a reasonable measurement of an employer's experience with respect to the risk of unemployment. It is hoped that such policy will aid State agencies in reconsidering the disqualification provisions of their

laws.

Payment of Benefits to Young People While Undertaking Training

At the present time, the State laws require that a claimant for unemployment insurance must, in order to be eligible for benefits, be available for work. In the administration of this condition, State administrative authorities most commonly find that claimants who are full-time attendants at educational institutions are not available for referral to work and consequently are not entitled to benefits. Therefore, claimants who might otherwise undertake special training or return to school because they have little likelihood of finding jobs with the skills they now have may be deterred from doing so because benefits would be withheld for the weeks of school attendance. In the interest of promoting greater training in order to enhance opportunities for

employment, States might give, consideration to amending their laws or revising their administrative practices to permit the payment of benefits if, though attending training, the individual is available for work and does not refuse suitable work without good

tion of procedures to reduce reporting burdens on employers, to expedite payment, and to promote public understanding. It will be important not only that benefits be adequate but that they be paid promptly. Much has already been done, but there is ample room for continued improvement if the program is to maintain the confidence and understanding of the public. One of the procedures that might aid greatly in the expeditious payment of benefits would be decentralization of benefit payments to local offices. Thirty-four States have already operated with some decentralization of the benefit-determination function, and other States have been studying similar plans.

Employers, especially large interstate employers, have complained about the burdens of variations in the forms used by State agencies for similar procedures-variations in reporting wages and contributions, in low-earnings reports, and separation reports. Elimination of any reports where feasible and simplification and uniformity where possible can relieve employers of unnecessary burdens. Additional simplifications can be made by eliminating the use of benefit payments in the formula for experience rating.

Good administration encompasses something more than the kind of organization and the kind of procedures that are established. It is the spirit and understanding of those who make up the organization and who carry out the procedures that count.

Each State agency must constantly review its law and procedures so that it can recommend changes to improve the administration of its law. Each State law should be written and administered so that the State agency can assume the initiative all along the line. It must make certain that employers do not avoid their obligations to pay contributions and that workers do not mulct the fund. It cannot sit back waiting for cases of dereliction to be brought to its attention, nor can it sit back expecting unemployed workers to know their rights and take advantage of them. It must remember at all times that it has an affirmative obligation to make certain that unemployment insurance is paid promptly and fully to workers 727827-47- -2

involuntarily unemployed and only to such workers.

Relations With Employer, Labor,

and Public Groups

In administering the unemployment insurance system, we must constantly strive to adjust the program to meet new problems as they arise. These problems cannot be solved simply on the basis of technical knowledge. They involve a realistic appraisal of social and economic factors. They involve assumptions as to the basic purposes of the law. They must take into account group attitudes and public opinion. That is why it is desirable for the State agency to work closely with an advisory council representing employers, employees, and members of the public, including outstanding citizens and persons versed in labor relations, social welfare, and related matters. Out of this discussion between the technicians of the State agency on the one hand and the advisory groups on the other can come the sound social judgment that is so essential to a social program such as unemployment insurance. The experience in most of the States that have used advisory councils has shown that they can be helpful in the progressive improvement of the program and in the development of community understanding of the complex issues involved in unemployment insurance.

In hearing appeals on claims denials, appeals tribunals composed of employers and employees perform a similar function. States which have no provision for the use of tripartite appeals boards should give consideration to the adoption of an amendment which would permit the use of such boards. While most appeals can be handled satisfactorily by referees, there are cases, especially cases which may set precedents, which involve grave and complicated issues of employer-employee relationships and which need the considered opinion of representatives of workers and employers as well as the judgment of an impartial representative. Such boards have been found effective in the administration of labor laws in many States; they bring the experience of labor and management to the settlement of the issues, and protect the agency from charges of arbitrariness in handling the issues.

Temporary Disability

With a strengthened unemployment insurance system and an organization experienced in administering the unemployment insurance program, the States might well expand their social insurance protection by providing for a system of cash benefits to individuals when they are sick or temporarily disabled.

It makes little difference to workers, in terms of wage loss, whether they are unemployed because of lack of work or because of illness. As a matter of fact, the latter contingency places a double burden on workers because it results not only in cessation of earnings but in medical costs. Yet at the present time most industrial workers are protected against the former contingency and not the latter. Already two States, Rhode Island and California, have enacted temporary disability insurance laws in which the same State agency administering the unemployment insurance program is administering the temporary disability insurance program. Such an arrangement permits the use of a single set of wage records for determining benefit rights under both programs, results in greater efficiency of operations, and reduces total administrative costs. Other States are seriously considering enactment of similar laws.

Congress recently enacted legislation including benefits for temporary disability under the railroad unemployment insurance program. Congress also provided an inducement to State action in this area by permitting States to withdraw, for temporary disability insurance purposes, employee contributions they had deposited in the unemployment trust fund. Since the beginning of the program nine States-Alabama, California, Indiana, Kentucky, Louisiana, Massachusetts, New Hampshire, New Jersey, and Rhode Island-have collected employee contributions, some of them in substantial amounts. These employee contributions might well form the financial basis for embarking on systems of temporary disability insurance, since withdrawal of such employee contributions will not endanger the solvency of the State unemployment funds.

In 1945, the Social Security Board

issued a document entitled "Some Provisional Notes on a Program of Temporary Disability Compensation Administered by a State Employment Security Agency," and this document is now being revised to take account of new developments. The Social Security Administration stands ready to lend every assistance in formulating a sound program of temporary disability insurance and in developing an administration integrated with unemployment insurance.

Conclusion

The next sessions of the State legis

latures will probably convene at a
time when employment is at high
levels and unemployment remains
low. However, major economic ad-
justments may occur within the next
few years. Whether they take the
form of a slight or a more severe re-
cession we do not yet know. The task
ahead, however, is to prepare the pro-
gram for its maximum contribution
to the maintenance of high-level em-
ployment in a free democratic society,
through broadening its coverage and
providing adequate benefits to indi-
viduals when they are unemployed
because of lack of work or illness.

Recent State Legislation Concerning
Prepayment Medical Care

By Margaret C. Klem*

In this study of State legislation in the field of voluntary prepayment medical care plans, the author points out the characteristic pattern followed in recent laws. As in all Bulletin articles, the opinions expressed are those of the author and do not necessarily reflect official views of the Social Security Administration.

DURING THE PAST few years the increasing public interest in problems of medical economics has been expressed many times through legislation, either proposed or enacted, at both national and State levels.

On the national scene the WagnerMurray-Dingell bill, which provides for personal health service on a compulsory insurance basis, has aroused most interest. The Senate hearings on the bill, which ran from April to mid-July of last year, brought together testimony from many of the Nation's most eminent authorities on the medical, economic, and social aspects of health problems.

State legislation has also assumed much importance during this period. Many States have made provisions for committees to study various aspects of personal health services, such as medical facilities, expenditures for medical care, and the need for more

Chief, Medical Economics Section, Division of Health and Disability Studies, Bureau of Research and Statistics. This article is based on addresses presented at a Conference on Rural Medical Care, Purdue University, August 1, 1946, and the National Conference on Cooperative Health Plans, Two Harbors, Minn., August 17, 1946.

adequate services to all or to certain groups of the State's population. Since 1943 alone, health commissions to inquire into the problems of medical care have been established through legislative action in nine StatesCalifornia, Illinois, Maryland, New York, North Carolina, Rhode Island, South Carolina, Virginia, and West Virginia. Commissions have also been appointed, although not specifically authorized by legislative acts, in Alabama, Colorado, and Florida.

State interest in health matters is further evidenced by the fact that by February 1946, 18 months after the Commission on Hospital Care was set up by the American Hospital Association in cooperation with the Government, all 48 States and the District of Columbia had made plans for or were conducting State-wide hospital surveys. On January 31, 1946, studies were in progress in 31 States and the District of Columbia; 2 additional States had completed preliminary studies; studies had been authorized but not started in 8 States; and the other 7 were forming study groups.1

inaugurated to study the Nation's hospital facilities, has been helping the States in their surveys. To assist the Commission in its work, the U. S. Public Health Service has made technical personnel and physical facilities available to the staff. State health departments have given assistance and in some instances are actually conducting the studies. The introduction in January 1945 of the HillBurton bill, which authorized Federal grants to States for surveying hospital needs and for constructing hospitals and public health centers, and the hearings that followed gave great importance to the studies. This bill was enacted by the Seventy-ninth Congress as the Hospital Survey and Construction Act and was approved August 13, 1946.

Nonprofit Medical Care Plans

Although all State legislation relating to medical problems is of interest to those who want to improve health conditions, one aspect is of particular concern to everyone interested in prepayment plans. Physicians, labor unions, industries, and various consumer groups who are sponsoring or hope to establish such plans will find significant implications in legislation which the specifically authorizes establishment and control of prepayment medical care organizations.

To date, 29 States have enacted laws dealing with medical service plans. More than half these laws were enacted during 1945 and the early part of 1946, when 15 States' passed such laws for the first time and 5 States amended or reenacted legislation already in force. Thirty-six States have also passed laws regarding nonprofit hospital service plans. Medical Participation

Recent legislation on voluntary nonprofit prepayment medical care plans is particularly significant from one aspect-the provisions made for participation by physicians. The 15 States recently enacting new laws for the regulation of these plans have followed the precedent set by such States

Alabama, Arizona, Florida, Illinois, Iowa, Kansas, Kentucky, Maryland, Minnesota, Mississippi, North Dakota, Rhode Island, Tennessee, Texas, and Wisconsin.

Connecticut, New Hampshire, New Jersey, New York, and West Virginia.

as New Jersey, Ohio, and Pennsylvania, where the legislation was formulated along lines demanded by medical society groups, In most of these 15 States, under the present laws, the future of prepaid medical care will be largely in the hands of the medical profession, as it is now in New Jersey, Ohio, and Pennsylvania, to the exclusion of other nonprofit or profit organizations or groups. This type of legislation has been

sponsored by medical societies or by persons interested in prepayment medical care programs similar to those now operated by many State medical societies. Individuals or groups who are interested in other types of prepayment programs must either seek to have such acts amended or must sponsor other legislation."

'No attempt has been made to study other types of legislation in the various States under which such plans can be or

Experience in Massachusetts, for example, shows that the passage of an act adapted to the needs of one particular type of program does not preclude passage of legislation providing greater latitude of operation. In 1941, Massachusetts passed two separate acts (table 1). The first, sponsored by those favoring the medical society ganized, such as the laws authorizing the formation of cooperatives and nonprofit organizations.

Board of directors approved by a medical society incorporated not less than 10 years and having not less than 2,000 physicians as members; at least one-third of directors must be subscribers to plan.

Board of directors

with not less than 9 members, of whom at least 3 and not more than a third shall be subscribing members of corporation, and at least 3 and not more than a third physicians who are members of the Massachusetts Medical Society or other recognized association physicians and who are not associated with physicians of the medical service plan. Any person in Commonwealth who meets qualifications specified in bylaws may become a subscribing member.

of

Board of trustees. No person can be approved as trustee unless approved by a recognized medical society or a professional organization having not less than 2,000 members licensed to practice medicine and surgery.

Pennsylvania (Acts 398 and 399). Approved: 1939. Amended: 1943.

Authorizes

non

profit corporations to operate voluntary nonprofit medical care plans.

Provides for nonprofit medical service plans.

Fifteen-member board of trustees, representing the public and the medical profession; at least 6 public representatives.

Nine persons, residents of Pennsylvania, majority physicians. All questions involving professional ethics to be decided only by physicians selected in accordance with bylaws of corporation.

Professional services by physicians and surgeons in office, hospitals, and homes: hospitalization not included. Contracts cannot be issued to persons without dependents and with income exceeding $900 during 6 preceding months, or persons having dependents whose income exceeded $1,200 during preceding 6 months' period.

Medical services (not cash) for persons of low income and their dependents as follows: Person with one dependent whose income for preceding 25 weeks averaged not more than $30 weekly or whose income with dependent's averaged not more than $45; persons with more than one dependent whose income with incomes of all dependents averaged not more than $60 during 25-week period. All persons of low income entitled to apply for membership. Persons with higher incomes may become members with understanding that physicians may make extra charge for services.

type of organization, provides for the formation of medical service corporations to be managed by boards of directors composed of persons approved by a medical society which has been incorporated for at least 10 years and has not less than 2,000 members; not less than one-third of the directors must be subscribers to the medical care plan. The second act, sponsored by those who favored a plan that would not give a monopoly to medical societies, provides for the formation of medical service corporations, approved by the Department of Public Health and managed by boards of directors with not less than 9 members, of whom at least 3 but not more than a third are subscribing members, and at least 3 but not more than a third are physicians who are members of the Massachusetts Medical Society or of some other recognized association of physicians. Both laws are on the statute books.

Eleven of the 15 States recently en

acting legislation have made definite provisions for medical supervision and participation. Illinois and Tennessee specify that a certain number of citizens (7 in one State and 9 in the other) may incorporate, but the majority must be physicians. Moreover, before plans in these States are approved, proof must be given that the majority of the physicians in the area of operation are willing to participate.

The Minnesota act states that not less than 21 persons, all doctors of medicine, may incorporate. Wisconsin legislation provides for the incorporation of plans by the State medical society or by county medical societies having State medical society approval. Alabama has amended State hospital legislation to permit hospitals which have been approved by the State hospital and medical associations to provide medical services.

Legislation in Rhode Island provides for double approval by the Governor, who must certify that the

plan is a public convenience, and by the State medical society, which must give approval before a plan may incorporate.

While the Kentucky law does not specify the type of persons who may incorporate, it requires that at least 51 percent of the physicians in the area of operation must signify their willingness to provide services before a certificate of incorporation will be granted. Neither Iowa nor Kansas made any special regulations about incorporation, but the former requires that 150 physicians must participate in any plan, and the latter specifies 50.

Both Florida and North Dakota, while giving latitude for the types of plans that may be incorporated, specify that the plans must be managed by boards of directors, the majority of whom are physicians.

Other Aspects

Boards of directors.-The regulations regarding boards of directors in