to health and medical care. In discussing how "a dubious luxury becomes a civic right" the Somerses point out that:

"So long as men lived at subsistence levels, compassion and care for the sick were considered luxuries. The great advances in national income and in individual purchasing power, and rapidly rising educational levels, have created the conditions necessary to support an expensive structure of medical care as well as the sick during nonproductive periods."

The great and entirely reasonable expectations of the aged are not only for longer life but also for better health.

Medical costs are going to continue to rise and place the possibilities for financing such care further and further out of the reach of older people. Over the past decade, these costs have increased at a higher rate than other elements in the cost of living. Due principally to further developments in the kind and quality of care offered, these costs will probably continue to rise at the rate of about 5 percent a year. Perhaps persons who are currently in the labor force and whose income continues to grow with productivity and whose medical care costs are carried in part as a result of collective bargaining contracts, can continue to obtain the higher and higher quality of medical care at increasing rates; but these conditions obviously do not apply to persons out of the labor market because of retirement or disability. Some system that makes available at least such basic and essential health services as hospitalization and nursing home care must be established.

As indicated at the outset of our statement, our association believes that such a system is the provision of hospitalization and nursing home benefits through contributory social insurance as proposed by the administration bill, H.R. 4222, introduced by Congressman Cecil King.

We believe it has been amply demonstrated that the great majority of aged persons cannot afford private insurance.

Polls conducted among older people indicate that they prefer the insurance approach.

We do not believe that providing cash benefits in lieu of health benefits to permit purchase of health insurance would be practical or possible. Such an arrangement exists theoretically at least in many States in connection with public assistance, but the hard facts of life see these cash payments for medical care consumed to obtain the necessities of life. Congress recognized this fact several years ago and provided vendor payments for medical care recipients of public assistance to insure that medical care was obtained.

We do not believe that the program of medical assistance for the aged is the desirable approach for the aged generally, and are sure that the great majority of older people who have managed their own affairs without recourse to aid until sickness strikes would not choose this approach to their needs.

We think the time has come to take a great and important step forward and include the basic costs of health care for the aged within the social security system.

Initially, of course, these benefits would be made available to older people who have not contributed toward their cost, but this is a recognizable necessity in the initiation of a new program. However, an opportunity will be provided for all members of the working force to contribute toward and plan for a retirement program that will also make some provision for their health needs. We feel certain that if this issue were put up to our wage earners, they would accept the $1 or $2 a month additional payment required to assure such protection for themselves and collaterally for their parents.

There are two principal issues concerning the several approaches to financing medical care for the aged. Both of these involve the method of financing. The first may be simply stated as follows:

Shall medical care for the aged be financed through an insurance benefit or shall it be financed through a system of charity?

An insurance benefit available as part of an insurance system establishing a whole series of wage loss payments would be available to virtually all those in the labor force and/or their aged insured dependents.

A charitable grant, such as that available through our public assistance programs and through the extension of public assistance authorized under the Kerr-Mills legislation, requires in every instance some kind of a means test with its attendant loss of dignity. Depending upon the particular State laws to secure the charitable grant may require pauperization or near pauperization of the individual. In many instances, it may involve considerable divesting of assets which ultimately may result in application for public assistance anyway. This seems hardly the way to preserve independence in old age.

The second issue concerns the soundness of applying an insurance principle to the financing of medical care for the aged. For the same reasons that old-age and survivors insurance has been shown to be sound for the purposes it was established to serve, insurance for medical care for the aged is sound. The risk is spread on the broadest possible base to virtually every wage earner and most self-employed persons in our country. The period over which contributions are made is extended-a period which encompasses all of the working years. These two factors keep the premium at a low rate.

The likelihood of some utilization of benefits is high-particularly with the advances in the practice of medicine which prolong life and reduce mortality, but which have a concomitant penalty of increased morbidity. Where a social service becomes such that a large portion of the population requires it at any given time, it appears most sound to finance that social service on a prepayment basis extended over a long period of time.

The cost of financing a similar program out of current revenue would be virtually prohibitive, just as financing a pension system out of current revenue would be prohibitive.

It is one of the anomalies of the current controversy of financing medical care for the aged that no one has seriously questioned the validity of the old-age survivors and disability insurance program as it now stands. No serious proposal has been brought forth to abolish the old-age survivors and disability program. There seems to be general agreement that it is more desirable to provide a basic social insurance program to finance life in old age than to rely on a system of old-age assistance.

How strange then to support a system of social security to avoid reliance on relief in old age, and then advocate a system of relief for those who are medically indigent.

That the social security approach is fiscally responsible and administratively sound is testified to by a large number of eminent students of and/or experienced administrators of our social security system among whom are the following who are also members of the National Association of Social Workers:

Mr. Arthur Altmeyer, former Chairman of Social Security Board and Commissioner of Social Security.

Dr. Eveline M. Burns, professor of Social Work, New York School of Social Work, Columbia University; former consultant to Committee on Economic Security and Social Security Board and member of Advisory Committee to Secretary of Health, Education, and Welfare (1954).

Mr. Wilbur J. Cohen, Assistant Secretary for Legislative Affairs, Department of Health, Education, and Welfare; former professor, Public Welfare Administration, School of Social Work, University of Michigan; member of the staff of the President's Committee on Economic Security (1934–35).

Miss Loula Dunn, director, American Public Welfare Association; member, 1959 Advisory Council on Public Assistance.

Mr. Fedele F. Fauri, dean, School of Social Work, University of Michigan; former consultant on social security to House Ways and Means and Senate Finance Committees.

Miss Jane M. Hoey, Director, Bureau of Public Assistance, Social Security Administration (1936-54).

Mr. Charles I. Schottland, dean, Florence Heller Graduate School of Social Welfare, Brandeis University; former Commissioner of Social Security (1954-58). Mr. Karl de Schweinitz, former consultant to Social Security Board and professor emeritus, University of California.

Mr. John W. Tramburg, commissioner of New Jersey State Department of Institutions and Agencies; former Commissioner of Social Security (1953).

Mr. George K. Wyman, executive director, Welfare Council of Metropolitan Los Angeles; former Deputy Commissioner of Social Security (1959).

In addition, we might point to the 19th Annual Report of the Board of Trustees of the Social Security Trust Fund, which at the time was headed by the then Secretary of the Treasury, Robert B. Anderson, reads as follows:

"Long-range cost estimates show that the financing of the old-age and survivors insurance program is in close actuarial balance. In other words, the system will have sufficient income from contributions based on the tax schedule now in the law and from interest carried on investments, to meet payments for benefits and administrative expenses over the long-range future. Aggregate income of the disability insurance trust fund during the period immediately ahead will continue to be wholly sufficient to meet aggregate disbursements and, in fact, will build up a substantial fund."

Finally, we believe that there is a broad argument economically for providing an adequate system of health benefits for the aged. The estimated $1 billion cost of the King bill would enhance the purchasing power of the aged by releasing funds for consumer expenditures on the one hand, and on the other creating a demand for more medical equipment, more buildings, and more health personnel, particularly auxiliary and paramedical personnel. Real and essential jobs would be created as a partial answer to the residue of hard-core unemployment of the past three recessions. Part of the answer to the drying up of jobs in business and industry due to automation has to be found in our service industries of which one of the most significant and socially useful is the area of health and medical care. Here should be job opportunities for some of the younger as well as the more responsible and responsive unemployed who could be trained under legislation now pending in the Congress.

MEMORANDUM-THE MEANS TEST IN PENNSYLVANIA

A person telephones or comes to the office of the county board of assistance to apply. He is given an appointment. He is told that everyone in the family over 18 years of age should come for this appointment, if at all possible. He is told to bring certain papers and information with him, since they are needed for a decision on his eligibility for assistance. Attached is our Appointment for Interview form which lists the papers and information he is told to bring with him.

When the applicant applies, the agency must have the following additional information from him, supported by acceptable evidence: Why he is applying; how he has managed up to now; what has changed to make him apply now; what his actual or potential resources are-for example, earnings; such benefits as veterans, OASDI, railroad, unemployment compensation, workmen's compensation, Government employees' disability or retirement, labor union and private employers' health, welfare, and retirement benefits; support order payments; relatives' contributions; lottery winnings; any resources from recurring or nonrecurring income, the sources, frequency of receipt, expenses of securing the income; personal property such as cash, stocks, bonds, mortgages, insurance, household furnishings, or personal effects of unusual value, burial reserve, institutional contract to furnish maintenance, automobile, inheritances; as well as all real property.

Eligibility of any person who has a claim or legal right to any property, real or personal, or any benefit or award, depends on his agreement to apply for it and make it available for his use or repayment of assistance received.

The agency must also know whether he has disposed of property in the 2 years before application, without receiving fair market value in return. In such cases, all of the details of the transaction must be gone into. If he did not receive fair market value, he is ineligible for assistance unless the property is reconveyed to him, or the owner acknowledges liability of the property for assistance granted, or certain other actions are taken.

If the applicant owns his home, he must give the Commonwealth what amounts to a lien on the property. If he owns any other real property, he must take steps to sell it promptly at whatever price it brings on the open market. Meantime, he must give the Commonwealth a lien on that property.

Not only the applicant, but also the spouse of an applicant, and the parent of minor children for whom assistance is being asked (even if they are married minors applying for themselves) must sign an agreement acknowledging the liability of real and personal property for repayment of assistance. This is a $2,000 lien, and, therefore, a new one must be executed periodically if assistance continues.

Cash value of insurance above $500 must, within 6 months after the family or individual starts to receive assistance, be reduced to the permitted value. If an automobile is less than 5 years old, or has a net worth of over $500, the owner must, within 6 months after first receipt of assistance, reduce this asset to the permitted value. Any burial reserves must be in irrevocable form and may not exceed $500.

Something of the scope and process of exploring and verifying resources and related facts may be conveyed by a listing of a few of the forms used in the process: Request for confidential employment information (on this form regular periodic, as well as one-time, information may be requested); memo to school official on student's employment; request for financial information (from banks, building and loan associations, postal savings, etc.); request for legal information (facts about real estate, inheritance, marriage, divorce, nonsupport, prosecu

tions, etc.); request for verification of birth; record of death; request for information, bureau of motor vehicles; request for insurance data; request for advice from life insurance adjustment bureau; inquiry about death claim payment; request for workmen's compensation information; request for information (on refunds or annuities) from the U.S. Civil Service (or State Employees, or public school employees) retirement system; inquiry to military installation, etc.

The applicant must also give the following information, supported by acceptable evidence: his living arrangements; the names, relationships, and birthdates of those others living in the home; gross income, certain work expenses and number of dependents of parents, spouse, children-minor and adult, whether they are living in the home or elsewhere. This information is compared against a relatives' income scale and other standards, and a decision is made as to the amount of support expected from, or assumed to be available from, the relative for the assistance client. The client's alternative to this decision is to go to the court for a decision on the relative's responsibility. The applicant's capacity for work is a resource that is thoroughly explored in the means test-"thoroughly explored" is a phrase that covers a whole network of discussion, investigation, and evidence. Whenever the agency considers that a medical examination is necessary in making a decision about the extent and kind of work the applicant is able to do, a medical examination becomes a condition of eligibility for assistance. If a man applying for assistance were unwilling to undergo such medical examination (perhaps out of fear), not only would he not be eligible for assistance, but his wife and children living with him would also not be eligible.

If the applicant is deemed employable by the agency, he must show satisfactory evidence that he is actively seeking employment and is willing to accept anything within his capacity-not just work he considers "suitable." If he had had employment, he must give evidence that his failure to keep it was not willful, and that this was not a regular work history for him.

The applicant must take an affidavit that he has "revealed all the facts concerning the income and resources available to all the persons for whom application is made * * *"; that he agrees "to assist in securing further information necessary to determine my eligibility for assistance and hereby authorize any duly accredited representative of the department of public welfare to secure any information that may be desired concerning my resources, including old-age, disability, and survivors' age and benefit information"; and that he "agrees to give immediate notice to the department of public welfare of any changes in the facts above stated. * * *"

In addition, the applicant must sign an indemnity agreement authorizing the prothonotary or attorney of any court of record to enter judgment in the sum of $500 against the applicant if assistance is obtained by making false representation or concealing facts.

The person who receives assistance must report promptly all money or other resources the family receives even $1 a youngster earns cutting grass. Anything an adult recipient earns above $10 (a schoolchild above $20) and certain work expenses reduces the assistance grant. The client must also report any change of persons in his home a person who moves out, a person who moves in, a baby born. If the client does not report any change in the home or any resource within a given time, a claim may be set up against him and he may be prosecuted as well.

WE SUPPORT HEALTH BENEFITS FOR THE AGED THROUGH SOCIAL SECURITY (Published by National Association of Social Workers, New York, N.Y.)

FOREWORD

The National Association of Social Workers is pleased to publish these statements in support of the principle of social-security-related benefits for the aged. It is our hope that this booklet will help those concerned with the problem to see the broad and varied base of support for the social security approach. "S." refers to hearings of the Senate Finance Committee, 1960 "H." refers to hearings of the House Ways and Means Committee, 1959

A CROSS SECTION OF ORGANIZATIONS AND PUBLICATIONS ENDORSING PRINCIPLE OF HEALTH BENEFITS FOR THE AGED THROUGH SOCIAL SECURITY

American Federation of Labor and Congress of Industrial Organizations and 51 affiliated national and international unions, and 26 affiliated State labor bodies

"Our own experience at labor meetings and in discussions with experts in health and social security has reinforced our conviction that the established social security system is the most appropriate method through which the Government can assist aged citizens with problems of financing medical care" (S., p. 223).

American Nurses' Association

"*** the American Nurses' Association support the extension and the improvement of the contributory social insurance to include health insurance for beneficiaries of old-age, survivors, and disability insurance. * * *

"The benefits of modern medical science should be available to all citizens of this country. Health services which are essential to social well-being are expensive and likely to become more so in the years ahead. Without insurance protection against the costs of illness, the disabled, retired, and aged must often depend on public relief in times of sickness.

**** Certainly, insurance coverage against the costs of illness which may occur after retirement, which insurance can be paid for during the working years, would be less costly to the public than tax-supported public relief for health care a dependency which is distasteful and degrading to citizens of this country (H., p. 361).

American Public Welfare Association

"We strongly urge, * * * the establishment of a program of health benefits for social security beneficiaries as part of OASDI. This program, together with the expansion of OAA to provide better for the medical needs of persons not eligible under social insurance or whose needs cannot be fully met in that way, would give to all aged persons the assurance that they will not have to go without essential medical care when their working years are over. We subscribe to the principle of financing the costs of any health insurance benefits to OASDI beneficiaries through the contributory social insurance program so widely accepted by the American people" (S., p. 357).

American Veterans Committee

"Private health insurance programs are unable to meet the costs of medical care beginning around the age of 65, or, when people are able to meet these costs, the premiums are so tremendously high that the general public is unable to afford them.

"Working within the social security system, with a regular payroll deduction by employee and employer, a person will have sufficient funds upon reaching age 65 to enable him to cover medical costs" (editorial, AVC Bulletin, December 1960).

Business Week

"Everyone who has seriously studied the situation has concluded that the provision of better health care for the aged is a serious and growing problem. "Health, Education, and Welfare Secretary Fleming, in his thorough report to the House Ways and Means Committee last year, concluded that three out of every four aged persons would be able to prove need in relation to hospital costs.' * * *

"Indeed, after studying Flemming's able report, and the arguments on all sides of this issue, we are forced to conclude that the voluntary approach simply will not do the job.

"The problem basically is that the aged are high-cost, high-risk, low-income customers. Their health needs can be met only by themselves when they are young or by other younger people who are still working. The only way to handle their health problem, therefore, is to spread the risks and costs widely. And that can best be done through the social security system to which employers and employees contribute regularly" (S. pp. 228, 229).

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