Secretary WIRTZ. That is correct.

Mr. ULLMAN. So what we are saying is if we take this other approach, "If you have a home, you are not entitled to anything. You ought to sell your home." On the other hand it seems to me that in establishing this very minimum base of economic security envisioned by H.R. 3920 we are just saying to the older citizen who owns a home that, "If you have a medical emergency here is something that you can turn to and you won't have to sell your home and you won't have to part from that very basic minimum of security that has meant so much to you." That security in my opinion, and I have talked to a lot of elderly citizens, is about all many older people have to live for, and if we are saying, "You have to get rid of that, and go into a home and go on welfare," then I think that we are doing a grave disservice to the older people of this country.

Thank you.

Mr. CURTIS. Mr. Chairman.

The CHAIRMAN. Any further questions?
Mr. Collier.

Mr. COLLIER. Briefly, Mr. Secretary, in another area. Do you think that the Federal Government has a responsibility in the many Federal-State matching fund programs to provide such guidance and leadership as is necessary to make them work as efficiently as possible? Secretary WIRTZ. It is so broad a question that an absolute answer would not properly reflect any view I would hold.

I would start from the same point that I assume all of us here would start, that the less of this kind of thing that is necessary, the better, so that there is no absolute necessity of that kind.

I would not shy away from that kind of program because of concern about control or something of that kind. The most helpful answer I can make I guess would be that I would feel that there would be in a number of programs of this kind a supervisory, administrative, and a kind of leveling out function, not including a regulating function, as far as the Federal Government is concerned.

Mr. COLLIER. Would you provide the leadership in every way possible to make the various matching fund programs work or does the Federal Government have no responsibility, merely passing these matching fund programs and then walking away from them?

Secretary WIRTZ. I don't think they can walk away from it. I think the responsibility that goes with the fact that it is Federal money includes a responsibilty to see that legislative purpose of that program is carried out and that that part is the Federal Government's function.

Mr. COLLIER. My next question then is this. Do you think that the Federal Government has made a sincere effort to provide this type of leadership in making the MAA program work to its maximum efficiency?

Secretary WIRTZ. I do, sir; but I would recognize and so would you that that is a responsibility of another department and so the basis for that answer would be much firmer in Secretary Celebrezze's testimony than in mine, but I have no questions about it myself.

Mr. COLLIER. I mention this only because I think it is very interesting to look at the potential of the MAA program with all of the criticism that was prompted by those who prefer, and have a right

to prefer, the social security approach to the medicare problem. However I think we have done an injustice to many people in many States by not providing the leadership necessary to make this program work. One of the prime examples that I know with which the Secretary is familiar is the history of the MAA in the State of West Virginia. Originally the requirements provided medical care even when an applicant had liquid assets of $7,500, ownership of a home without limits, plus property, and so on. In other words applicants merely had to show immediately need. Then this program was cut back. I feel, Mr. Secretary, until there is a decision in establishing a new program, if there is to be one, in dealing with the problem of medical care for older citizens, that there is some responsibility not necessarily the direct exercise of Federal control, but some responsibility on the part of the Federal Government to encourage and try to make this program work. Perhaps it should be done through consultation with the welfare leaders of the State, but certainly there is an area where now a vacuum exists and where I think this vacuum should be filled in the interim period until it is decided what course we shall pursue in meeting this problem of medical care for our older citizens.

In closing let me ask this. Is there anything being done now to your knowledge to consult with the leaders of the various States, particularly the 28 who have embraced this program, to try to provide some means by which it can work more successfully than it is at the present time?

Secretary WIRTZ. Mr. Nestingen, Under Secretary of HEW, is here. I would be glad to refer that question to him with your indulgence. I just wouldn't know.

Mr. COLLIER. All right.

Mr. NESTINGEN. Mr. Collier, we are in constant touch with the representatives of the various States on the MAA program. Any assistance that we can give to them we are most happy to do so and encourage adoption of MAA programs in every State in the country.

This has been true in great part due to the efforts of Secretary Celebrezze and Mrs. Ellen Winston, Commissioner of the Welfare Administration, but any assistance we can give we certainly stand ready to do so and have been ready to do so.

Mr. COLLIER. Do you think there are areas where the operation of this program could be broadened and could be administered in a more beneficial manner to meet the needs of elder citizens than it presently is?

Mr. NESTINGEN. I think the program could be improved in most States in the Union. It isn't from the standpoint of administration that I say that. I say that they could improve these programs from the standpoint of range of benefits, but that the primary limitation that we are finding in the various States in the Union go to the difficulty of State governments in financing a broader program as far as benefits are concerned or eligibility for benefits either one.

Mr. COLLIER. Of course at the present time under the welfare qualifications and regulations of the various States this would tend to relieve expenses which otherwise must be provided for other purposes, would it not?

Mr. NESTINGEN. In general the adoption of the MAA program in any one State will add to the financial expense of the State. It will not basically, in the overall financial picture, relieve the financial situation for the State, but will add to its expenses.

Mr. COLLIER. But since this is a problem of prime importance wouldn't it seem logical that the people who run the State governments could recognize the importance of this problem equally as we here in Washington do?

Mr. NESTINGEN. I don't have any doubt in my own mind but what most State officials are as well aware of this problem as any of us in Washington.

I don't have any doubt in my mind, however, either as I have talked to any number of State officials, be they Governors or otherwise, of the difficulty within each State financial picture of financing a broad MAA program, and this is the basic limitation that State governments are encountering except in a very limited number of States.

Mr. COLLIER. I realize there is a basic limitation in the expenditure of tax funds, be it at the city, county, State, or Federal level, but here we are dealing with a problem that we regard as a priority problem. Therefore, if it is a priority problem and I am prepared to say that it is in many cases, then it would seem to me that the fund problem should be treated on the basis of the priority that it demands.

Mr. NESTINGEN. I might say, Mr. Collier inherent in the problem of helping to assure adequate coverage for health costs of the aged through the Kerr-Mills legislation is some thing you have touched on inferentially that merits comment.

There is priority on this particular problem in varying degrees in varying parts of the country. In some States they say, "We don't need Kerr-Mills. We will handle it through the vendor payments of OAA." In other States they say they will take care of it by MAA on a more limited basis as compared to other States. In addition to that you have the problem of biennial sessions of the legislatures and competing pressures for use of funds each time a legislature meets.

You find a varying composition of the legislative bodies at succeeding sessions. As you find these varying circumstances arising through 50 different jurisdictions, you are finding 50 different answers being given and those answers varying from one legislative session to another as a good possibility.

If we are to have an answer to this problem on a national basis, as we believe must be the case, the King-Anderson bill provides the best mechanism for an answer on a national basis.

Mr. COLLIER. Yet in fact in two States where the legislatures adopted a program to participate in this, two Governors succeeded in vetoing it; isn't that correct?

Mr. NESTINGEN. That may be correct. I don't know offhand.
Mr. COLLIER. That is all I have, Mr. Chairman.

The CHAIRMAN. Mr. Burke.

Mr. BURKE. Mr. Secretary, in looking over the figures for medical assistance for the aged recipients, payments for recipients by State, ending the fiscal year July 1963, we find that the total amount expended was $28,426,914. Of this amount I notice that the State of California, State of Connecticut, States of Massachusetts, Michigan, New York, Pennsylvania, and the State of Washington have almost 90 percent of those funds. Why is it that the rest of these States haven't implemented the Kerr-Mills law? Would you place the blame on the States, or on the Federal Government, or on the law itself?

Secretary WIRTZ. I just have to make clear that I have not been closely enough connected with the administration of that program which has been in the Department of Health, Education, and Welfare. I have not been close enough to it, Congressman, to answer the question.

Mr. BURKE. But these figures do indicate that these States that have taken up the lion's share of these funds have actually implemented the Kerr-Mills law and they are using it. It also indicates, in my opinion, however, that many of our States are reluctant to enter into that program or else the restrictions are such that it becomes impractical or impossible for the Kerr-Mills law to operate in those particular States.

Secretary WIRTZ. I noticed in Secretary Celebrezze's testimony yesterday the reference to the fact that in September almost all of it went to five States. I don't know the administrative end of this. We don't handle it in our Department.

Mr. BURKE. Those figures would indicate that in those five States the aged are being taken care of to a certain extent and what bothers me is what has happened to the aged in these other States where the Kerr-Mills is not operating. Just how are they being taken care of?

Secretary WIRTZ. I regret my inability to be helpful on this point. The CHAIRMAN. Any further questions?

Secretary WIRTZ. I am advised, Mr. Chairman, that I am now running late for this other committee so I will leave if I may.

Mr. CURTIS. Mr. Chairman, I hate to delay the Secretary but I am a little bit concerned about whether there may be a misunderstanding with regard to the data that I requested in light of the questions of Mr. Karsten and Mr. Ullman, I want to make it clear that when I was asking for statistics I was referring to the economic problem. I was not confining this to the needs. I am afraid that the two gentlemen misunderstood. The other thing I want to be sure is that it is appreciated that I want as much data that bears on this as possible. If you want to draw conclusions from it, all right. Far from wanting to play a game with statistics, I am trying to stop what I think has been the game that has been played with them. The way to stop this is to get the full picture in.

Then one final thing, Mr. Secretary, that bears on it. I used the figure 15 to 20 percent as being this group and it was not pulled out of a hat. There were in 1962 2,226,000 people on old-age assistance and you add to that the 128,000 on MAA and you relate that to the 17,500,000 group and it is 13 percent, so I would be a little generous by those percentages.

The other point bears on this because this relates to the data I have asked for. The over-65 age group on welfare has been the group that has been declining. In 1950 this group was 2,789,000 and has declined to 2,226,000, even though the population over 65 has been increasing. The trend is that this group that have had to go on welfare over 65 is further declining. This is in contrast, I might add, with the groups on ADC, the families on ADC, which are almost all below 65, and the groups on disability through social security, these are the groups that are increasing, so in relation to the financial well-being of the aged group this data is important, too. It is along those lines that I directed my inquiry for further statistics.

The CHAIRMAN. Mr. Secretary, again, we thank you, sir, for coming to the committee and bringing your statement on this matter to us. We appreciate your doing so.

Secretary WIRTZ. Thank you very much.

The CHAIRMAN. We have with us today the Honorable Harrison A. Williams, Senator from the State of New Jersey. Senator, we appreciate so much that you have come to this side of the Capitol to visit the committee. You are recognized and you may proceed.

STATEMENT OF HON. HARRISON A. WILLIAMS, JR., A U.S. SENATOR FROM THE STATE OF NEW JERSEY

Mr. WILLIAMS of New Jersey. Mr. Chairman, it seems inescapable to me that the most equitable, dignified, and economic method of financing the hospital and related expenses of older Americans would be a program of insurance financed through the social security mechanism-a program such as that embodied in the King-Anderson proposal-H.R. 3920 and S. 880.

The need for such a program is undeniable. Older Americans have markedly lower incomes-half of aged couples receive less than $2,500 a year. Half of our older citizens have less than $1,000 in liquid assets. Almost one-half of our older population have no health insurance. Much of the insurance policies held by those fortunate enough to have any coverage is inadequate and extremely costly-often carried at the sacrifice of money which should be going for basic necessities such as food, clothing, and shelter. Older citizens use three times as much hospital care as younger people and suffer far more chronic conditions than persons under age 65.

Private insurance cannot do the job that must be done. In my own State of New Jersey, for example, the most widely held Blue Cross contract offers policyholders, under age 65, 120 days of full coverage plus 245 part-benefit days. Coverage is reduced at 65 to 60 full days only. Coverage is again reduced at age 70 to only 30 days. This illustrates the conflict between the health needs of the elderly and the fact that they, as a high-risk group, are an uneconomic segment of the population in terms of the interests of the private insurer. As the above illustration reveals, when needs are greatest coverage is cut.

Kerr-Mills cannot do the job either. Not only does the program place a tremendous strain upon the already limited finances of any State embarking upon an MAA program, but the means test-relief nature of the program are totally inconsistent with the dignity and sense of independence which are the right of every older American.

A self-funded program of insurance for hospital and related expenses, financed through social security, is the only economically and socially sound answer to this overwhelming problem of our older generations.

The CHAIRMAN. Thank you for your statement, Senator. Are there any questions? If not, thank you again.

Our next witness is a former distinguished colleague of ours who saw fit to go to the other body, the Honorable Karl E. Mundt.

Senator Mundt, we appreciate having you back with us this morning on the House side. We welcome you, and you are recognized, sir.

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