Part II.--Continued The cost and financing of the plan.. Proposed plan of administration.... Management of the health insurance benefits... Over-all responsibility............ Operating responsibilities of the Insurance..... 73 Participating roles, States and private organizations.. 75 75 Role of States....... Role of private organizations.. Lead time to have health insurance benefits program fully operational..... Certifying eligibility of providers to Reimbursement policies and formulas. procedures.... Identification of individuals 78 78 79 80 82 82 Establishing and maintaining beneficiary records..... 83 Appendix. Medical assistance for the aged: Selected characteristics West Virginia... .1 .2 .3 .5 .6 .7 .8 .9 ..10 .....11 Plans (for which information is available) as proposed to go into effect before end of 1961. HEALTH INSURANCE FOR AGED PERSONS INTRODUCTION Rapid growth in our aged population has been accompanied by increasing concern about their problems. One of these is the problem of medical care: How can higher-than-average needs be financed for a group with lower-than-average financial resources? Medical care has become a matter of national concern in the United States--not because sickness and disease are more prevalent but because of the very successes of modern medicine. Modern medical services are not only more effective, they are also very much more costly than the best services available as recently as the early decades of this century. The medical profession will have to work out the future pattern of medical practice. Society as a whole, however, has a proper concern with the methods of paying for medical services. The method of paying for care is of particular consequence for the aged. And the problem is by no means limited to low-income groups: Many middleincome families with too much money to expect free care may find themselves with too little to pay for what they need. Because no one knows when he will be taken seriously ill, the cost of medical care is a threat to the security and independence of the aged. Every aged person knows--and fears--that some day before he dies he will face serious illness. Most have too little set aside to finance an expensive illness. And it is understandable that those who have savings hesitate to use them all up; they know only too well how likely it is that they will have further illness. Aged persons, like others, dislike turning to public assistance; many old persons go without care rather than subject themselves to a means test. With medical service a basic necessity, and an individual's need for it highly variable and unpredictable, some socially organized method of paying for services is indicated. One method is that of insurance, which permits individuals to budget ahead for at least some medical expenditures. Aged persons now find it difficult to obtain adequate health insurance protection. As a group they have more need of medical services than younger persons. Because they use more than others, the average medical cost and hence the current insurance premium needed for aged persons is between two and three times as high as for younger persons. Up until quite recently, most persons over 65 could not buy health insurance. At present, less than half of all persons aged 65 and over have some type of health insurance. While the extent of insurance protection has increased in recent years, voluntary action alone cannot meet the full need. Some who need the insurance most, because they already have expensive health problems, will find they are not accepted as insurable risks. Others, who would be considered good risks, will find the premium cost more than can be spared out of an income already stretched thin by everyday necessities. How, in terms acceptable to our social goals and political organization, should medical care for the aged be financed? Much care for the aged and for other low-income groups is already supported out of public funds, that is, from taxes paid largely by the working population. If the aged are to have adequate medical care, society as a whole must continue to help carry the costs of this group in our population. Society does have a choice as to the terms on which the care should be available and how the tax funds should be collected. This problem cannot be met satisfactorily through sole reliance on a program of assistance varying from State to State and with the funds coming from general revenues. What is required is a national program, financed through social insurance contributions, with the same benefits available throughout the Nation. This report first summarizes the evidences of the problem of medical care for the aged. It describes the means now available to deal with the problem--primarily voluntary insurance and public assistance programs. It then takes up in some detail the Administration's proposal to provide protection against the costs of hospital and skilled nursing home services, home health services, and outpatient hospital diagnostic services through social insurance. It describes the provisions as to coverage and benefits, the costs and the financing, and how the program might be administered. PART I MEDICAL CARE FOR THE AGED: THE NEED AND PRESENT PROVISIONS FOR MEETING THAT NEED The growth of the aged population of the United States, both in absolute numbers and in relation to the total population, has led to increasing concern about their special problems. In the 10 years from 1950 to 1960 the number aged 65 and over in the United States increased more than 4 million, or 35 percent, nearly twice the rate of increase in the total population. The total number of persons in this age group in the United States, Puerto Rico, and the Virgin Islands now exceeds 17 million, and by 1970 will probably exceed 20 million. The sharp drop in income associated with withdrawal from the labor market has been of first concern. Monthly benefits under the old-age, survivors, and disability insurance system provide substantial protection against loss of earnings, making it possible for the great majority of beneficiaries to meet day-to-day living expenses, at least at a minimal level. Heavy medical costs are now the most serious impediment to security in old age. For this reason, increasing attention has been directed toward methods of financing the medical services needed by older persons. THE NEED FOR FINANCING MEDICAL CARE HEALTH CHARACTERISTICS 1/ Millions of older persons are reasonably healthy, but many more millions suffer from disease and disability. Health of course affects every aspect of a person's life--his participation in society and his financial status--and is in turn largely dependent on his ability to obtain appropriate care. Unless otherwise indicated, the data in this section are drawn from U.S. Public Health Service Publication No. 584-C4, Older Persons, Selected Health Characteristics, United States, July 1957-June 1959, and other National Health Survey reports. |