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benefits changed after retirement. In 3 out of 4 cases the workers, once he retired, would have to bear the entire cost of his coverage. When the preretire ment benefits were paid for solely by the employer, however, less than one-tenth of the employees were required to make some financial contribution toward coverage after retirement.

Mr. CURTIS. Now, then, you can answer my question: How much progress does this show there has been in the period from the Fortune magazine article to the present time?

Secretary RIBICOFF. According to the BLS study, the proportion of employees in those of the 300 collectively bargained plans that continue hospital protection after retirement rose from 36 percent in 1955 to 42 percent in 1959. The proportion of workers in plans that provided protection for employee dependents both before and after retirement increased from 40 percent to 44 percent.

These figures indicate an average gain of one to two percentage points a year, a steady but not spectacular growth.

Mr. CURTIS. In other words, there has not been an acceleration?
Secretary RIBICOFF. There has been; yet.

Mr. CURTIS. There was a time when very few labor-management contracts took care of workmen after they retired. They were cut off. But there has been, I think, a considerable development in that area in recent years. And that would indicate that.

Secretary RIBICOFF. Let me point this out, Congressman Curtis. And I say this philosophically and respectfully. One way or another, health costs are going to be paid for.

Mr. CURTIS. We couldn't agree more.

Secretary RIBICOFF. All right. Now, what is happening? I picked up the paper the other day, and I noticed that the United Automobile Workers are insisting, in their present collective bargaining dealings with the automotive industry, that the automobile companies pick up the entire costs of health insurance, instead of part of the costs.

Now, basically, if this is the push, whether in pension plans, or in collective bargaining agreements, ultimately it is going to be paid for by the public. Right?

Mr. CURTIS. That is right. You are correct.

Secretary RIBICOFF. Now, my contention is: If something is going to be paid for, are we not better off being frank about it and knowing that the person who is getting the benefit is going to pay for it directly?

One way or another you have an indirect cost, because it goes upon the shoulders of the consumer.

Mr. CURTIS. Let us be frank about it. One is to do it through the private sector, which I happen to believe in, and the other way is to do it through the governmental sector, which you happen to believe in and I do not.

I think there are times when we have to use the Government function in order to accomplish a result. But I only want to do that when I see that the progress in the private sector to meet the social need or problem is not moving forward; or that Government is impeding it from moving forward.

And that is, as far as I am concerned, the basic issue that is involved here. If someone can demonstrate to me, No. 1, that we did not have, to start off with, the best health care program anywhere around, and then, secondly, even if we did, if that program were not

constantly being upgraded, and thirdly, I would have cause for alarm if a new program came up which imposed a real burden on our people, which I think has occurred

That is the situation of our people, living from 10 to 15 years longer; but that goes back to what I have said. That is a result of the success of the program.

Now, can we meet this new problem through the system that has brought about the success? Or do we have to abandon it on behalf of this program you are suggesting?

Secretary RIBICOFF. I am very pleased to join issues with you: I believe that everybody is entitled to health care, no matter who his employer is, whether he belongs to a union or does not belong to a union, or whether he lives in the State of New York, or in the State of Mississippi.

Now, therefore, what you are advocating: Those employees who work for companies represented by strong unions, who at the collective bargaining table are able to get good terms for the so-called fringe benefits they are covered. How about the man who is nonunionMr. CURTIS. I am not advocating that.

Secretary RIBICOFF. But you are talking about: Why can we not do it in the private sector? The point is that even in public programs you run a fantastic gamut between States that do practically nothing, or nothing, and States that do much. You have different conditions, different employment conditions. Now, as far as I am concerned, a person in Mississippi at the age of 68 who has to go to a hospital is entitled to just as good care as a person who lives in the State of Connecticut or New York.

Basically, if you do not have a health insurance program under the social security system, which covers 95 percent of the people of the United States, then where you live and who you work for will determine whether you will have good health or bad health.

I am for giving good health care to everybody in the United States of America, no matter who they work for or where they live.

Mr. CURTIS. That to me is a definition of socialized medicine. You are talking about it as Secretary of HEW. Now, I happen to be interested in the same objective, of getting as adequate health care as possible for all our people. I just happen to believe that the best way to do that is through the system, the private enterprise system, that has produced the tremendous success that we have today.

And I cannot understand why you want to junk that program, as I think you would be doing, in favor of a system that never has worked, and, where it has been in effect, shows a downgrading of medical care.. We both want the person who lives in Mississippi or wherever to have the best possible health care that a society can develop. And it depends upon the system that society uses to bring that about. You cannot wave a magic wand and get these things done. Government is not that powerful, to be able to just accomplish these things by saying that everyone is entitled to it.

I do not know where you get the idea that they are entitled to it. We hope we can bring about a system where they can have it; but the entitlement comes from how well we handle ourselves.

Secretary RIBICOFF. Well, I would say every person in America is: entitled to get his health needs taken care of. I do not think that you

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or I, no matter what our political or social point of view, would advocate that a person who was ill would not have his health needs taken care of.

When you say your argument is a new argument, it is not a new argument. This argument is as old as the Constitution, when Alexander Hamilton and Thomas Jefferson crossed horns on this. And it was Alexander Hamilton who wrote the general welfare clause of the Constitution.

Mr. CURTIS. Mr. Secretary, I am referring to what I am calling the ADA philosophy, and point out that Alexander Hamilton is their particular patron saint.

Secretary RIBICOFF. I thought he was one of the patron saints of the Republican Party.

Mr. CURTIS. Not mine, I might say. And let me say this, Mr. Secretary. Had I been a Congressman back in those days, I probably would have been a Federalist, because it would have seemed to me that the needs of the times were directed along those lines.

Today, as I view the social structure and political structure, I feel that we will move forward much more rapidly by a greater emphasis on private initiative in the private sector and the local governmental sector and the States, rather than the Federal.

Now, this is a perfectly legitimate area for disagreement. And it is not one of you trying to help the older people get medical care and me trying not to. We are both trying to do that. And it is in this area of which system works best that I think our discussion should rest, and I think it has to a large degree.

Secretary RIBICOFF. I agree with you, Congressman Curtis. And let me say this. I am respectful toward each one of your arguments, because my feeling is that the rubbing of your type of mind against my type of mind-and minds such as ours throughout the Congress of the United States and this administration-will eventually produce a program that will get the majority support of the Congress of the United States.

Mr. CURTIS. I think so.

Secretary RIBICOFF. And it is important for us to have these types of discussion. I think they are all to the good. And frankly, I enjoy them.

Mr. CURTIS. I do, too, Mr. Secretary. And that is the point I want to get the thing on, really, on a basis that we are trying to get into the facts, here, not because AMA is for it or against it. I respect any group of people, whoever they are, that will put forward facts and arguments so that we can grapple with them.

I have a couple of detailed questions, here.

On page 17 you made this statement: "The medical expenses for older people who are hospitalized are about five times as great as the medical bills for people who are not hospitalized." The question I have is: Is that a different ratio for other than older people? Secretary RIBICOFF. On page 17?

Mr. CURTIS. On page 17. It is right at the end of the third paragraph.

Secretary RIBICOFF. Yes. That is taken from the 1957 survey of OASI beneficiaries. It shows the average annual total cost for aged persons hospitalized during 1957 was $700. For those not hospital

ized, it was $150. There are more details on this period on page 23 of the report, "Health Insurance for Aged Persons."

Mr. CURTIS. Yes. That would be the figure that I would suspect would be something like that. The question I have asked: Is that a different figure than what you would find for any age group? In other words, of course the hospital costs are going to be considerably more than the other medical costs. And what I am trying to find out is: Is this pecular to the over-65 age group, or is it something that runs through any age group?

Secretary RIBICOFF. I would say this: while there is probably a pretty good direct ratio, the difference is that people under 65 are in a better position to be able to pay than those over 65, because they have the jobs; they have resources; they have Blue Cross; they have the medical plans in their factories; and they are in a better position to handle medical costs.

Mr. CURTIS. That is a presumption that we need to get some information on. That is what I started out with in one of my points before noon, that you talk about one item of an older person's budget, health cost, being greater than that for any other age group, which is certainly true; but you forget that practically every other item in the older person's budget is less than that of any other age group, for various reasons, food, clothing, shelter. We also know when we get into the other side of an over burdened ledger, they have more liquid assets than any other age group. A higher percentage are homeowners. Most of them own their own homes. The average equity runs up around $8,500. There are just lots of things that we have to put in when we consider the budgets of our older people.

And one of my criticisms of the presentation of your Department has been that they have just focused attention only on this one item, as to an older person's budget. We need to know what their entire financial situation is.

Secretary RIBICOFF. Those figures are in the supplementary document that I have given the committee. I think we should keep in mind that while it is true that 66 percent of the nonfarm spending units headed by a person over 65 do own their own homes, 83 percent mortgage free, and with average equity in 1957 of about $8,000 for beneficiary couples, yet the average income of a couple is under $2,500. Even though they do own their own homes, they still have taxes to pay and repairs to make, you know.

Mr. CURTIS. Oh, sure. I am not trying to deny that. I am saying that this is an entire budget picture. And let us get all the items in. And anyone who keeps concentrating on one item without the others-now, I did look through this very hurriedly, I must confess, because I just got it this morning, and I saw nothing in here this morning at all on the overall budgets of older people. I do not think there is a thing in here on that subject, which would be in accord with the way you have presented it in the past.

Secretary RIBICOFF. Let me say this, Congressman Curtis. If there is any figure that is not in that document, upon the request of you or the clerk of this committee, we will supply it to you.

Mr. CURTIS. I hope you will. But, Mr. Secretary, why was it not in in the beginning, as one of the points?

Secretary RIBICOFF. If you will turn to page 20 of that document, you have the total cost here, and on page 21 in the second full paragraph you have the separate items.

This passage states that the Bureau of Labor Statistics has developed a scale based on the relation between food expenditures and income throughout the entire range of income, which suggests that one person 65 or over would need 59 percent as much income as an elderly couple with the same standard.

Mr. CURTIS. Yes; but you see, what I was directing my attention to: You have used the figures of the health costs of people over 65 in relation to the health costs of people from other age brackets. And all I am saying is that we would love to have the other items in the older people's budget compared to those other groups that we are going to get a complete picture on, and also we need to do a similar thing on income.

The people on retirement do not have as much in wages and salaries as other age groups; much less.

Secretary RIBICOFF. Sir, in the hearings on the social security amendments you asked the same thing, and on April 3 we sent you a memorandum, which appears on page 41 of the hearings of the Committee on Ways and Means, April 3, 1961, and which analyzes what you now ask for.

May I have the chairman's permission to have the staff memorandum of April 3, 1961, incorporated at this place in the record, sir?

Mr. CURTIS. I certainly would like to have that.

The CHAIRMAN. Without objection, that may be done.

(The staff memorandum of April 3, 1961, referred to, follows:)

DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE,
SOCIAL SECURITY ADMINISTRATION,
BUREAU OF OLD-Age and SURVIVORS INSURANCE,
April 3, 1961.

STAFF MEMORANDUM

Subject: Needs and income of elderly people.

In the executive session of the Committee on Ways and Means on H.R. 4571 on March 9, a member of the committee raised a question whether family budgets. that have been devised for elderly people actually reflect the needs of aged retired people.

Governmental and private agencies concerned with the preparation and pricing of family budgets gear the content of each budget to a specific type of family situation or indicate items that vary with the family situation. For example, the Bureau of Labor Statistics for a retired elderly couple living in a large city or its suburbs at a "modest but adequate" level (comparable to the original 1948 Social Security Administration budget which the present version revises and updates) is similar in content to the Bureau's city worker's family budget,' but includes only items that old people would be expected to need-food, housing (two or three-room rented dwelling), medical care, transportation, recreation, contributions, and other goods and services. It does not include any allowance for items that might be assumed to be purchased by younger people or people currently working but not by older retired people--for example, life insurance, income taxes, expenses connected with travel to work, or payments for education of children. The elderly couple's budget, priced in 20 large cities in autumn 1959, showed living costs ranging from $2,641 per year in Houston to $3,366 per year in Chicago.

1 "The BLS Interim Budget for a Retired Couple," Monthly Labor Review, November 1960. U.S. Department of Labor, Bureau of Labor Statistics.

2 The Interim City Worker's Family Budget," Monthly Labor Review, August 1960. U.S. Department of Labor, Bureau of Labor Statistics.

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