"2 times the average daily hospital cost" deductible associated with the 180-day maximum hospitalization alternative is on a "dynamic" basis and so is automatically kept up-to-date, while the deductible of "$10 per day" is not on a "dynamic" basis. The other three benefits provided by the bill would have a far lower relative cost than the hospitalization benefits (assuming that the types of services provided by the different facilities remain approximately the same as at present). Accordingly, even relatively large variations in the cost estimates for these benefits would have much less effect on the overall costs of the proposal. Although the se services (skilled-nursing-facility care following hospitalization, outpatient-hospital-diagnosis, and home-health-visits) are now being extensively provided in a number of areas, comparatively little data is available in regard to their cost for aged persons, when provided in the manner set out by the bill. In many instances, these three types of benefits are not currently available because of lack of facilities (or insufficient facilities). Accordingly, the early-year costs for these benefits will be relatively low. The long-range costs, however, are determined on the assumption that sufficient, adequate facilities will be available to supply the benefits provided. Another important factor in connection with the actuarial analysis of proposals for various types of health benefits is their cost-interrelationship. For example, if hospitalization benefits were provided, but skilled-nursing-facility care were not, there would tend to be more utilization of the hospitalization benefits because an individual would be more likely to stay longer in a hospital (at little or no cost to him) rather than to enter a skilled-nursing-facility operating at lower costs, but with the full amount to be paid by him. Similarly, if there were no outpatient-hospital-diagnostic benefits provided in the bill, and if there were no deductible in the hospitalization benefits, there would be a financial incentive for an individual to enter a hospital (with resulting higher cost) to obtain these services without cost to him. Likewise, the availability of home-health services can reduce hospitalization-benefit costs in certain cases. Otherwise, an individual might enter a hospital or stay in it longer if in doing so there were less cost to him personally than in obtaining home-health services. On the other hand, the home-health services, when available, will undoubtedly be utilized by many persons who would not otherwise have been in hospitals. In the same way, the presence (or absence) of a deductible provision for one benefit can influence not only the cost of that benefit, but also the costs of other types of benefit. 10. 14. 19. 21. Actuarial Studies Available from the Division of the Actuary* Various Methods of Financing Old-Age Pension Plans--September An Analysis of the Benefits and Costs under Title II of the OASI 1943-44 Cost Studies--May 1944. Analysis of Long-Range Cost Factors --September 1946. 32. Analysis of 346 Group Annuities Underwritten in 1946-50--October 1952. 34. Analysis of the Benefits under the OASI Program as Amended in 1952--December 1952. 37. Estimated Amount of Life Insurance in Force as Survivor Benefits under Social Security Act Amendments of 1952--August 1953. 38. Long-Range Cost Estimates for Changes Proposed in the OASI System by H.R. 7199, with Supplementary Estimates for Universal Coverage--March 1954. 40. 41. 43. The Financial Principle of Self-Support in the OASI System-- Analysis of Benefits, OASI Program, 1954 Amendments-- May 1955. Estimated Amount of Life Insurance in Force as Survivor Benefits under OASI--1955--September 1955. 44. Analysis of 157 Group Annuity Plans Amended in 1950-54--July 1956. 45. Present Values of OASI Benefits in Current Payment Status 1940-56 --May 1957. 46. 47. Illustrative United States Population Projections--May 1957. Estimated Amount of Life Insurance in Force as Survivor Benefits under OASI--1957--July 1958. 48. Long-Range Cost Estimates for Old-Age, Survivors, and Disability Insurance under 1956 Amendments--August 1958. 49. Methodology Involved in Developing Long-Range Cost Estimates for the Old-Age, Survivors, and Disability Insurance System--May 1959. Analysis of Benefits, OASDI Program, 1960 Amendments--December 1960. 50. 51. Present Values of OASI Benefits in Current Payment Status, 1960 - 52. Actuarial Cost Estimates for Health Insurance Benefits Bill-July 1961. 53. Medium-Range Cost Estimates for Old-Age, Survivors, and Disability Insurance and Increasing-Earnings Assumption--August 1961. 54. Estimated Amount of Life Insurance in Force as Survivor Benefits under OASI 1959-60--October 1961. 55. Remarriage Tables Based on Experience under OASDI and U.S. Employees' Compensation Systems --December 1962. 56. Analysis of Benefits under 26 Selected Private Pension Plans-- MEDICAL CARE FOR THE AGED TUESDAY, NOVEMBER 19, 1963 HOUSE OF REPRESENTATIVES, Washington, D.C. The committee met at 10 a.m., pursuant to recess in the committee hearing room in the Longworth Building, Hon. Wilbur D. Mills (chairman of the committee) presiding. The CHAIRMAN. The committee will please be in order. We are pleased this morning to have as our first witness the Honorable W. Willard Wirtz, the Secretary of Labor. Mr. Wirtz, you have been before the committee before. We welcome you back, sir. You are recognized. STATEMENT OF HON. W. WILLARD WIRTZ, SECRETARY OF THE DEPARTMENT OF LABOR; ACCOMPANIED BY ARNOLD CHASE, ASSISTANT COMMISSIONER, BUREAU OF LABOR STATISTICS; MRS. HELEN LAMALE, BUREAU OF LABOR STATISTICS AND HON. IVAN NESTINGEN, UNDER SECRETARY OF HEALTH, EDUCATION, AND WELFARE Secretary WIRTZ. It is always with very great pleasure that I appear before this committee. As well as with appreciation for the help which this committee invariably is to the programs in which we are interested. There are with me this morning, Mr. Chairman, the Under Secretary of Health, Education, and Welfare, Mr. Ivan Nestingen, and from the Department of Labor, Mr. Arnold Chase, who is Assistant Commissioner of the Bureau of Labor Statistics, and Mrs. Helen Lamale from the Bureau of Labor Statistics. They are closely acquainted with the details of this subject. I have filed with the committee, Mr. Chairman, a statement and with your permission I will simply summarize it. The CHAIRMAN. With the understanding that the entire statement will appear in the record, Mr. Secretary. (The statement referred to follows:) STATEMENT OF W. WILLARD WIRTZ, SECRETARY OF LABOR, ON H.R. 3920, A BILL TO PROVIDE MEDICAL CARE FOR THE AGED Mr. Chairman and members of the committee, I am very grateful for this chance to support Secretary Celebrezze's very fine and detailed testimony favoring H.R. 3920, introduced by Representative King. Although I shall limit myself to more general terms, nevertheless I speak with a sense of urgency and importance I cannot overemphasize. Together we express, on behalf of the administration, our deep and united conviction that the principles of democracy and of humanity support and demand the passage of this legislation. |