Blue Shield and an estimated one-half to three-fourths of a million by various prepaid group-practice, clinic type arrangements. While the contracts of people covered by such plans are not guaranteed renewable, these plans have not exercised the privivlege of cancellation or nonrenewal ("Voluntary Health Insurance and the Senior Citizen," New York State Insurance Department, pp. 33–34).

Of the approximately 4 to 44 million persons 65 and over covered by insurance companies, three-fourths million are insured under group plans and about 1 million are covered under mass-enrollment programs. The policies of people covered under these approaches are not subject to individual nonrenewal. Of the remaining 21⁄2 million aged covered by insurance companies, an estimated 500,000 have individual policies which are guaranteed renewable. The remaining 2 million aged covered by insurance companies presently have individual policies which, by their terms, are not guaranteed renewable.

The trend in individual health insurance policies written on a guaranteed renewable basis is evident from the following. According to a study of the New York State Insurance Department, 20 percent of the people insured under individual hospital-surgical-medical policies in 1956 had guaranteed renewable coverage. Based on a study conducted by the Health Insurance Association of America this proportion had increased to 31 percent by 1959. Thus, during this 3-year period, there was an increase of over 50 percent in the proportion of people covered by individual guaranteed renewable hospital-surgical-medical expense policies.

(6) Mr. Ullman inquired concerning the basis for our assumption that one out of three hospital discharges would go into nursing homes. Admittedly, accurate data in this area are difficult to obtain. HEW, on pages 11 and 12, respectively, of Actuarial Study No. 52, filed as an appendix to the testimony of Secretary Ribicoff, supports this view when it states: "It is very difficult to make estimates for skilled nursing home benefits because *** there are a number of different concepts under which these benefits might be operative or be utilized by the medical profession," and "Use of the data and analysis can produce a wide spread in the cost estimates both short range and long range."

The difficulty is further evident from the fact that HEW has revised its original level premium estimate with respect to this item and now predicts costs for nursing home care which are eight times those predicted earlier. No basis for this revision was furnished in the material filed with your committee.

We have experienced the same difficulty in obtaining reliable data on which to base our cost estimates. Therefore, we had a group of competent actuaries discuss the question thoroughly and they reached a conclusion that one out of three is a reasonable basis for estimate. We appreciate that this assumption produces an estimate of cost of nursing home care that is five times that of HEW's. However, we think that a Health Information Foundation study in 1961 ("Health Care for the Aged in the State of Washington, Report No. A-3, June 1961") is significant in this regard. It indicates that the annual cost of nursing home care per OAA recipient in the State of Washington was $210 in 1959. If this cost were to prevail for the population eligible under H.R. 4222, the nursing home cost alone would total $3 billion, or more than 120 times the HEW first-year dollar cost estimate of $25 million.

(7) In reference to our estimate that 53 percent of the noninstitutionalized aged population has some form of voluntary health insurance, Mr. Ullman requested the minimum coverage included in reaching this estimate. This figure is a projection from figures prepared by HEW and responsible private sources which studies did not indicate what minimums were used.

(8) At Mr. Ikard's request, we are submitting a copy of a report prepared by the Texas Research League for the Texas Department of Public Welfare entitled "Indigent Medical Care Services for Texas Public Assistance Recipients." This report was referred to by Mr. Rietz during the course of his testimony.

INDIGENT MEDICAL CARE SERVICES

TEXAS PUBLIC ASSISTANCE RECIPIENTS

THE TEXAS RESEARCH LEAGUE is a privately supported, nonprofit, nonpolitical, educational corporation engaged in objective research into the operations, programs and problems of Texas government.

The League does no lobbying. It undertakes studies only upon official request. No charge is made for these studies. They are financed entirely by annual contributions paid by public-spirited individuals, firms and corporations as a public service to the government and the people of Texas.

Submitted February, 1961

We take pleasure in submitting to you and the members of the State Board of Public Welfare this report of the League's study of "Indigent Medical Care Services for Texas Public Assistance Recipients."

This report embraces an inventory of local indigent medical care resources and services; it analyzes your Department's medical care expenditures from public assistance appropriations; it delineates the unmet medical needs of the present public assistance caseload; and it discusses the advantages and disadvantages of two basic approaches to meeting these medical needs. All of these items will probably be considered by the 57th Texas Legislature.

Because of the paucity of reliable and specific data on this problem, the League staff spent 18 months in intensive field analyses in all parts of the State. Public officials at all levels of government as well as medical, dental and related professional persons were consulted. Altogether the League's staff analyzed over 2,000 case records and gathered local indigent medical care data from each of the 254 counties.

The detailed research in this report was undertaken by four members of the League's staff. Aris (Bob) Mallas served as Project Director, assisted by Howard Blomquist, Margaret McQueen and James A. Hankerson. Throughout this study your staff, and especially your field staff, supplemented our efforts and assisted our staff in the finest manner possible.

It should be understood that this report is the third in a series emanating from the League's three year study of your Department undertaken at your request. Some of the findings and conclusions of this report may prove controversial. We felt it our responsibility, however, to furnish you and the State with the facts and the conclusions that we feel can be drawn from such data. We only hope the report will be of assistance to you in your efforts to maintain high standards of public service.