Page images
PDF
EPUB

Mr. Bow. I have had a number of insurance companies who say they will write the policy at this premium.

Mr. BURKE. Why do they not do it today?

Mr. Bow. They do not have this large group of 14 million people as a group to go in and compete with.

Mr. BURKE. Can you produce a statement to this committee that the insurance companies of this Nation can guarantee that all the people that you say will be covered in this bill will be covered by the insurance companies and there will be no question about it?

Mr. Bow. I cannot guarantee they will all be covered. I can produce evidence and show the insurance companies, many of them, have said this type of insurance can be written at this premium. This being true, I would assume that most people would be willing to go

into it.

Mr. BURKE. A lot of things can be done, but will they be done? They are not being done today under a voluntary system. I do not know what the basis is for your hope and expectation.

Mr. Bow. I think in these areas where the people of age 65 and over have been able to buy insurance, they have purchased it for their protection. Under this bill, we give a much larger group of people over age 65 the opportunity to purchase this type of insurance. I think they would purchase it. I think although it is voluntary, most everyone would take advantage of it and buy through private carriers so they would have the broader coverage and it would be a voluntary thing, and they would be working with their own doctors and hospitals.

Mr. BURKE. Are you not afraid this bill will create the false illusion there is going to be a condition brought about that can never be brought about?

Mr. Bow. No.

Mr. BURKE. We would be creating more or less a hoax on the aged of this Nation if we were to tell them this type of policy can be written when today there is no policy, to my knowledge, in effect that will carry out the provisions of the bill.

Mr. Bow. Let me say to you, if I thought this bill was a hoax on the old people of this country, this bill would not be in under my

name.

Mr. BURKE. I did not say

Mr. Bow. I think this bill is a good bill. I have evidence it can be worked, and I think the old people of this country are entitled to this type of insurance. I certainly would say to you, sir, that I have no intention of working a hoax on the old people of this country. I think they are deserving of that. I am getting close to that age myself.

Mr. BURKE. I did not say you would be creating a hoax. I said, will we not be guilty of creating a hoax if we adopted your bill?

Mr. Bow. No. I think there is not hoax about it. I think it is one that can probably be enacted into law and would be of great benefit to the aged of this country.

Mr. BURKE. I think it is incumbent upon you to present evidence to this committee guaranteeing that the insurance companies of this country will write up this type of policy. I think until that is forthcoming, your bill is meaningless as far as I am concerned.

Mr. Bow. I am sorry that you have not been convinced.

Mr. ALGER. I will not try to cross-examine this plan at this time. I want to make a general statement as a format around which I can discuss this with you in the future, and bring such other information to the committee that such conservation might make possible. I will not take time for questions.

I would like to give you a summary.

It is true you have presented us an alternative. You have eliminated certain aspects of compulsion, though there is still some compulsion. Everybody has to pay into the general revenue in taxes. I see that. We all do.

I do concede to you it is certainly preferable as an alternative to the proposal before us, as I see it. I do have these reservations.

We are trying to establish the need and you wisely said in your statement, I believe it was page 8, or at least you mentioned "perhaps," and then you gave the figures in the millions. We are not sure how many people of the 17 to 18 million actually need the insurance because we have the indigent, the near indigent, and the great group you do not want to become indigent, as you put it, by preventing that horrible alternative of driving them to that through their catastrophic illness. We are trying to establish, and we are thinking, that probably we are only talking about an area of 10 to 15 percent-we are not sure; I certainly am not, I will not have you think I am-of the total number over 65 that are the ones we need to solve the problem for.

Therefore, we want to be careful not to expand for all the people a program that could be better tailored to only 10 or 15 percent of those over 65.

Now, we all recognize the problem. I think we can agree with the gentleman from Massachusetts, there is a problem. We all recognize the problem. Our difference is what is the degree of the problem, and what kind of a solution should there be.

My second thought after the element of need is the matter of assets and income. You relate your bill rather wisely to a certain level of income, but you do not take into account assets. Therefore, we are in the position of knowing there are people with very substantial holdings that could provide for themselves that now will be induced, if you please, into taking this because it is a plan to be picked and they are human, and after all, they pay taxes and they would like to get back what they can.

Now, the matter of control. Of course, cost and control is always on our minds. I knew it is on yours. We speak of this as not being compulsion, but I fear the matter of control as it will relate to the Government control of insurance industry is a real question. I am sure you do not concede that from the statement you have given us. I, because I oppose Government in business, fear while this may not. violate any antitrust laws, we might be getting into the area where the tremendous outflow of money into the insurance companies might effectively control them.

Finally, the entire matter of this type of a bill during a period of deficit financing just makes me uneasy.

Mr. Bow. I think the gentleman recognizes at times it makes me uneasy as well. I think the gentleman knows my position. I have a feeling that this is a problem. It is a national problem, one that has

to be solved. There are other places we could probably dispose of some things we are doing and take care of these people in this

program.

Mr. ALGER. Thank you.

Mr. ULLMAN. Why clutter up our income tax forms with this kind of a credit. It would in reality be financed out of Treasury funds anyway. Why not just do it the straightforward way and expressly provide that it shall be paid out of Federal revenue-just say that these checks shall be written to the insurance companies under certain conditions in place of going through this fouling up of our income tax forms?

Mr. Bow. It seems to me their forms now provide the additional exemption at age 65. We now provide for refunds for people. We have the income tax now which provides after age 65 you can take your full deduction without the limitation. We are doing it now. This committee has written this type of thing into income tax laws, and it seems to me a proper way to do it.

Mr. ULLMAN. You are moving way out ahead of anything being done. You are saying if a man pays $20 tax, then the Government has to compute the difference and send a certificate for the difference between $150 and $20.

Mr. Bow. That would not be a difficult thing, even for the IRS.

Mr. ULLMAN. As you well know, I do not think you are a great friend of building bureaucracy, but I do not know of a better way to build bureaucracies than to require this type of paperwork.

Do you know what percentage of the older citizens pay taxes?

Mr. Bow. We have the figures. I do not have it with me. Perhaps one of my colleagues will have them.

Mr. ULLMAN. I am sure it is a vast preponderance of older citizens. Mr. Bow. I have seen

Mr. ULLMAN. They pay less than $150, so the Government would actually have to write checks for most of our older citizens?

Mr. Bow. Yes.

Mr. ULLMAN. They would have to do the computing of finding out the difference between what they made, and it would add greatly to the bureaucracy of the country. I think it is a totally unsound way of financing a program like this. I think if we were going to go into that type of program, the only way we could go would be by direct payments from the Treasury for everybody.

Mr. Bow. Before I close, Mr. Chairman, I ask permission to present this statement by our colleague, the gentleman from New York, Mr. Carleton J. King, who is the author of H.R. 4247, a bill identical to H.R. 21. Mr. King regrets that he is unable to appear in person today, and would like to have his statement appear in the record of the hearings following my testimony.

STATEMENT OF HON. CARLETON J. KING, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW YORK

Mr. Chairman, my name is Carleton J. King, and it is my privilege to represent the 30th Congressional District of New York State. I appreciate this opportunity to submit a brief statement in support of my bill, H.R. 4247, which provides for the medical and hospital care of the aged through a system of voluntary health insurance.

The medical costs and health needs of the aged, many of whom have low incomes, are much greater than those of other age groups in our population. There have been many proposals introduced, which, in my opinion, would require millions of workers, particularly younger couples with heavy responsibilities, to pay the medical care cost of these older persons.

Today over 50 percent of the current-aged group do have some form of private health insurance. Seventy percent are expected to have some form of hospital insurance by 1965. The President has stated that only half the old-age population has medical insurance. But this is just another way of saying that a good many of these people already do. So even without counting those people who can care for themselves without insurance, and ignoring entirely the astronomical growth rate in private insurance plans, those who need help from all of us are only a minority of our number.

The question here is not, and never has been, whether society has an obligation to care for its old and unfortunate. The question, rather, is whether this proposal to make us all wards of the Government will provide the needy with what they need, whether it will provide better medical care for the whole society or diminish it. A compulsory Government health care program could not help but adversely affect the quality of medical service by lowering the incentive for improved service to the public, discouraging students from entering the medical profession, provide a "foot in the door" to socialized medicine. Medical care is the same old story of private initiative versus a socialized state where the Government tries to do everything. It may sound like good politics today, but eventually the facts will catch up with the propaganda arguments. The problem of medical care isn't really limited to the one group of senior citizens. It involves the quality of medical care that is going to be available to everyone.

Generally speaking, my proposal would permit each individual or married couple over age 65 to select his own health care insurance, permitting a choice of plans similar to that now offered Federal employees. Regardless of other medical costs, my bill would permit a deduction of the total amount spent on such insurance in the income tax returns of the individual taxpayers whose income does not exceed $4,000 or $8,000 for a married couple. For those individuals who have no taxable income or who would pay a tax less than the cost of the insurance plan, my proposal would authorize issuance of a certificate entitling them to purchase an approved health insurance plan. Such a certificate would be in the amount of the difference between the cost of the plan and the amount the individual or couple could pay by reason of a tax credit. This would mean that a person with no taxable income would pay nothing for the insurance, and others would only pay in accordance with their ability to pay.

These certificates would be accepted by insurance companies in payment of premiums and in turn would be accepted by the Internal Revenue Service as part payment of taxes due from the companies.

The proposal I have introduced has several advantages which I believe should be considered in any program of hospital insurance for the elderly. First of all, it is completely voluntary. It cannot interfere in the practice of medicine or in the administration of hospitals. It will limit the assistance to those who really need it. It provides a number of insurance programs that may be tailored to the specific needs of the individual; and it will preserve the American free enterprise approach to solving individual needs, eliminating any Federal control of the service which could lead to socialized medicine.

Mr. Chairman, the longevity of our people, now over 70 years of age on the average, is a tribute to American medicine and the high standards we have maintained through the years. We have seen what has taken place in other countries where the Government has infiltrated itself into the medical problems of its citizens. It would be tragic, indeed, if the real need for medical care for elderly people who cannot afford it were to become the means of restricting them to a lower quality of medical care than we now enjoy in this country.

Many of my colleagues following the initiative of the distinguished gentleman from Ohio, Mr. Bow, have introduced similar measures. It is my understanding that in his presentation before this committee, he will go into much greater detail; and I sincerely hope that this learned committee in its wisdom will seriously consider this program which in my opinion will not endanger the social security system or the free enterprise system.

The CHAIRMAN. Thank you.

Our next witness is our colleague from Florida. The Honorable William C. Cramer.

We appreciate your also being a witness this morning. You have a bill somewhat similar, I understand, to H.R. 21. If you want us to, we will include the bill that you have introduced at this point in the record prior to your testimony.

STATEMENT OF HON. WILLIAM C. CRAMER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA

Mr. CRAMER. I would appreciate it.

The CHAIRMAN. It is H.R. 766.

Without objection, that bill will be made a part of the record at this point.

(H.R. 766 follows:)

[H.R. 766, 88th Cong., 1st sess.]

A BILL To provide for the medical and hospital care of the aged through a system of voluntary health insurance and tax credits, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Free Enterprise Medicare and Voluntary Health Insurance Benefits Act of 1962”.

FINDINGS AND DECLARATION OF PURPOSE

SEC. 2. (a) The Congress hereby finds that (1) many elderly Americans have resources inadequate to meet the expenses of major illness, (2) that more than one-half of all citizens who have reached the age of sixty-five have taken advantage of the growing opportunity to insure against such expenses, (3) that health and medical care insurance can be made available to all citizens regardless of previous medical history, (4) that health insurance coverage of all citizens who desire such coverge and who have reached age sixty-five is a desirable national objective, (5) that this coverage should be extended without Government interference on a voluntary rather than a compulsory basis, and (6) that it is in the public interest to provide Government assistance and encouragement to elderly Americans who seek the protection of medical care and hospitalization. (b) The purpose of this Act is to make it possible for every citizen of the United States who has reached age sixty-five to obtain on a voluntary basis comprehensive medical care and hospitalization insurance of his choice, subject to minimum standards designed to protect against the costs of the customary illnesses of old age as well as major medical expenses, on a guaranteed renewable basis regardless of prior medical history, with direct Government assistance for all who are otherwise unable to obtain such protection, and with tax incentives for elderly citizens, their relative or former employers who are able to provide medical care or protection against such costs, utilizing the facilities of the voluntary health insurance carriers of the United States in a manner consistent with the dignity and independence of each individual and the historic ability of the American people to solve social problems through their own initiative and enterprise, making certain that the Government will not control the individual's free choice nor interfere in his selection of a physician or hospital.

SEC. 3. (a) Part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1954 (relating to credits against tax) is amended by redesignating section 38 as section 39, and by inserting after section 37 the following new section: "SEC. 38. COSTS OF MEDICAL CARE FOR THE AGED.

"(a) DEFINITION OF QUALIFIED MEDICAL CARE INSURANCE PROGRAM FOR THE AGED. As used in this section, the term 'qualified medical care insurance program for the aged' means a program, offered by one or more insurance carriers operating in accordance with State law, providing protection, without regard to any preexisting health condition, under guaranteed renewable insurance for individuals 65 years of age or over against the costs of medical care (as defined in section 213 (e)) through a system of benefits including either

"(1) a plan providing benefits which may not be less than:

"(A) $12 for hospital room and board charges per day of confinement and $1.080 for all days of confinement in a calendar year;

« PreviousContinue »