Hospital insurance through social security would be financed by an increase of one-fourth of 1 percent in social security contributions for both employees and employers (0.4 of 1 percent for self-employed persons) and an increase in the taxable earnings base from $4,800 to $5,200. Part of the income from the increase in the earnings base will go for higher cash benefits for those earning over $4,800 a year. The cost of the hospital insurance program to the average worker would be about 25 cents a week. The cost of hospital insurance provided older people not eligible for social security or railroad retirement benefits would be met from the general revenues of the Federal Government. The hospital insurance program and the additional social security contributions would both go into effect January 1, 1965. What hospital insurance for the aged through social security is It is social insurance to help the American people meet the most expensive health-care costs they will face in retirement. It is protection built up on a pay-as-you-earn basis-half the cost being met by small payments by the worker when he can best afford it, during his working years and the rest being met by employer contributions. It means protection when people need it most and can least afford it-after the working years are over. Social security hospital insurance would not be difficult to administer. People over 65 would be given cards much like the cards now provided hospitalization insurance subscribers. And these cards would entitle them to all the benefits of the program. Neither they nor their families would have to prove poverty in order to enter a hospital or nursing home or receive home health care. Hospitals, skilled nursing facilities, and community health service organizations would bill social security for the reasonable cost of the services they furnished. There would be little difference between the procedures under the proposed program and those already set up and accepted by hospitals in connection with Blue Cross programs. Every hospital which is accredited by the Joint Commission on Accreditation of Hospitals (a non-Government, professional organization) would automatically be able to participate, provided only that it had an arrangement for reviewing the utilization of its services and facilities. Appropriate State agencies would play an important role in determining which nonaccredited hospitals and which skilled nursing facilities would be eligible to participate. These State agencies would also provide consultative services to those institutions to help them qualify. What hospital insurance for the aged through social security is not It is not socialized medicine. Nor would it lead to socialized medicine. It is simply a program designed to help older people pay hospital and related healthcare bills. The Government would not choose the patient's doctor he would make his own choice of doctor, just as now. The Government would not choose the hospital the older patient used-that would be up to the patient and his doctor, just as now. The Government would neither own nor operate the hospitals. Doctors would not be employees of the Government-they would continue to practice medicine, just as they do now. The only difference would be that neither the doctor nor the patient would have to worry about how the hospital and nursing home bills were to be paid. In short, social security hospital insurance would not provide health services. It would simply help pay for them. The proposed hospital insurance through social security-reinforced by private savings and private health insurance and supplemented where necessary by medical care through public assistance-would become the first line of defense against the high cost of illness in old age. (U.S. Department of Health, Education, and Welfare, Washington, D.C., March 1963.) The CHAIRMAN. The Chair asks for unanimous consent to insert in the record at the proper point the document, "Actuarial Cost Estimates for Hospital Insurance Bill." Hearing no objection, so ordered. (Document follows:) ctuarial Cost Estimates for Hospital Insurance Bill by ROBERT J. MYERS U.S. Department of Health, Education, and Welfare Social Security Administration.... Division of the Actuary ACTUARIAL STUDY NO. 57 JULY 1963 This study has been issued by the Division of the Actuary, under authority delegated by the Commissioner of Social Security. It is designed for the use of the staff of the Social Security Administration and for limited circulation to other persons in administration, insurance, and research concerned with the subject treated. B. Data, Assumptions, and Procedures in Cost Estimates for Hospital and Related Health Benefits for OASDI Beneficiaries.. Intermediate-Cost Estimate for Hospitalization Benefits. Cost Estimates for Skilled-Nursing-Facility Benefits........ Cost Estimates for Home-Health-Services Benefits....... Cost Estimates for Outpatient-Hospital-Diagnostic Benefits.. Estimated Long-Range Progress of Hospital Insurance Trust Fund under King-Anderson Bill of 1963, Intermediate-Cost Estimate FOREWORD Proposals to add hospital benefits for beneficiaries aged 65 and over to the OASDI program have created an interest in the data and methods used to develop actuarial cost estimates in this new area. This Study is a revision and expansion of Actuarial Study No. 52, which dealt with an earlier version of the Administration proposal. It is the policy of the Division of the Actuary to make its methods and procedures available to those interested. It is our hope that this Study will provide the information not readily available in other published reports. Robert J. Myers Social Security Administration - (11) |