Senator FONG. We can expect the insurance industry, whether it is Mutual, Blue Cross, or Blue Shield, or these stockholder companies, to do everything possible to see that almost every individual who can afford a policy buys one? That is the way you are urging the American citizen to buy insurance on his life? Mr. WILLIAMS. Yes; I could not agree with you more. I used to sell this insurance before I got into my present job, and this is the kind of insurance which strangely enough-people do not buy it, you have to sell it and you have great competition for other desires of the public. Senator FONG. Then you can expect great progress to be made in this field Mr. WILLIAMS. Based on past performance, I would say yes. Senator FONG. And that a great effort will be made for those over 65? Mr. WILLIAMS. Yes, sir. Senator FONG. I have no further questions. Senator MCNAMARA. Thank you very much, Mr. Williams. Mr. WILLIAMS. Thank you, Senator. Senator MCNAMARA. The next witness is Mr. Morton D. Miller, president of the New York 65 Health Insurance Association. STATEMENT OF MORTON D. MILLER, PRESIDENT, NEW YORK 65 HEALTH INSURANCE ASSOCIATION Mr. MILLER. Mr. Chairman, my name is Morton D. Miller. I am president of the New York 65 Health Insurance Association and vice president and associate actuary of the Equitable Life Assurance Society of the United States. I am here at the invitation of the chairman of the Subcommittee on Health of the Elderly to discuss the activities of the New York 65 Health Insurance Association, a group of 49 leading insurance companies which offers elderly residents of New York State health and hospital insurance in accordance with the provisions of law as enacted by the New York State Legislature. You have a detailed statement from us and with your permission, I will proceed with the summary statement. Senator MCNAMARA. If you will, because we recognize that the noon hour is here. We have some people here who are being very patient and we appreciate the cooperation. You go right ahead. Mr. MILLER. Perhaps the most significant fact about the New York 65 Health Insurance Association is that it is doing its job. During the course of the past 18 months, it has succeeded in bringing low-cost health and hospital and major medical insurance to more than 120,000 elderly residents of New York State, many of whom might have had a large part of their savings wiped out by the cost of a serious or prolonged illness if they had not had this protection. Since it began operation on October 15, 1962, New York 65 has paid over $15.6 million in benefits to some 32,000 policyholders and issued over 74,500 claim checks. About one out of every four policyholders has received some benefits from New York 65. Individual claim payments have ranged from a few dollars to more than $6,500. The legislation which made New York 65 possible, passed unanimously by both houses of the New York State Legislature at the 1962 session, this legislation stated in part: It is the concern of the legislature that many residents of this State of advanced years do not have readily available to them health insurance adequate to their needs. It is the legislature's intent to encourage and facilitate the writing of such insurance by private insurers on a nonprofit group basis in order to make available to such persons broader coverage at lower rates than is possible on a regular commercial basis. The basic health and hospital and the major medical plans offered by New York 65 have been made "readily available" as the legislature has directed. All qualified residents of the State those 65 and over, and their spouses regardless of age have been invited to enroll through extensive newspaper, consumer and trade magazines, television and radio advertising, and a supporting educational campaign. No physical examination is required. Any interested person may apply directly or by mail. Anyone, such as a son or daughter, is permitted to file an application for a parent or any other qualified person. The legislature further authorized every agent and broker licensed to sell health insurance in New York State to sell our New York 65 protection. To assist these agents and brokers, New York 65 held meetings with them throughout the State, in advance of the public offering of New York 65 benefits, to familiarize them with its provisions. More than 25,000 agents and brokers have participated actively in enrolling the elderly in New York 65. These agents and brokers have given of their time and talents for only a nominal financial return because they believe in what New York 65 is trying to accomplish. Other groups in the State have likewise cooperated in making information about the New York 65 program available to the public. These include agents and brokers' associations, the State medical society, nursing groups, hospital administrators, chambers of commerce, banks, and a variety of others. The provisions of the New York 65 coverage offer a comprehensive and balanced package to meet hospital, medical, surgical, convalescent nursing home, and other costs connected not only with hospital confinements but also with illnesses at home. The rates have been set as low as possible in light of the broad coverages afforded. As earlier stated, no physical examination is required. Once insured, a person has the guaranteed right to continue his coverage. More complete details of the coverages are given in exhibits A-F (pp. 114-172). Open enrollment periods were held in 1962 and 1963 and one is currently being conducted this month of April. In addition, special continuing enrollment opportunities are available to those who reach 65 or who retire after 65. In considering the 120,000 elderly individuals currently covered under New York 65, it must be borne in mind that New York 65 is only one of the mechanisms for health insurance protection available to the elderly in New York State. Many older individuals who retired in recent years have been able to continue their health insurance without interruption. In addition, there are a wide variety of other health insurance plans which are available on an individual or group basis. Nevertheless, we feel New York 65 has filled a hitherto unmet need as evidenced by the response received to the offering of our plan. The average age of those covered by New York 65 is nearly 74. In this connection, it is interesting to note that a recent check showed that 50 of those covered were 100 years old or over, and 1,966 of those covered were between the ages of 90 and 99. New York 65 was designed for the group which does not need the kind of help that is already available under the Kerr-Mills program. This group, we believe, is made up of self-reliant people and their families who have paid their own way all their lives and wish to continue to do so. Just as they need liability insurance to protect against the financial impact of automobile accidents, they also need health and major medical insurance to guard against the crippling financial impact of the cost of serious illnesses. To them and their families it is a matter of personal pride, dignity, integrity, and independence, to finance the costs of such protection out of their own pockets. New York 65, we believe, is still a developing program. We have been in operation for only 18 months. We are continuing with the help of our 49 member companies and with that of other elements of the insurance industry-nonmember companies and agents and brokers throughout the State, and other public-spirited groups-to bring information about the advantages of New York 65 protection to more of our senior citizens who stand to benefit from the plan. We are still learning and are continuing our efforts to find the most effective and economical methods of reaching and dealing with the elderly who need what New York 65 has to offer. To sum up, New York 65 health insurance is a much-needed protection against the costs, which are often catastrophic, of serious illness or accidents that can destroy a lifetime's hard-earned savings in a matter of months. It is currently doing this for more than 120,000 people. In addition, it is helping to provide peace of mind and a feeling of greater security, which in themselves are powerful mental stimuli in keeping elderly persons strong and healthy. New York 65 has carried out the mandate of the State legislature. It has made low-cost, broad-coverage health insurance, designed to meet the needs of the elderly, readily available to them. Senator MCNAMARA. Thank you very much. This New York 65 plan is restricted only to the State of New York, or is it New York City? What area do you cover? Mr. MILLER. We cover the whole of the State of New York, but there are similar plans, Senator, in other States. The first of these plans whom you will hear from later was established in Connecticut in 1961 and another plan was established in Massachusettts in 1962; in 1963 a plan was established in Texas; one has just been established in California; and another is underway in North Carolina and Virginia; and lastly, one is actively currently being planned for Ohio. Senator MCNAMARA. Your New York 65 plan covers doctor's expense as well as hospital expense? Do you have a separate program available for people who wanted only hospital insurance? Mr. MILLER. We have tried, in setting up our New York 65 benefits, to have broad-benefit packages, and so both our basic coverage and our major medical coverage include benefits for both hospital charges and for other charges. Senator MCNAMARA. You do not have separate plans for hospital only? Mr. MILLER. No, sir. Senator MCNAMARA. You refer to it as low cost and apparently you are quite proud of the fact that this is a low-cost plan. However, you indicate by the figures that you have submitted that it would cost a couple about $450 a year for this coverage. Do you still think that people in this retired group who have comparatively low income through social security and maybe other minor sources-do you find generally they can afford this plan? Mr. MILLER. There are two parts to our package, Senator, and deliberately so. The basic part of our program costs $10 a month per person, and the major medical part costs $9 per person a month, and it is the two parts together which you have reference to. We were conscious of the fact that persons who are in advanced years have somewhat more limited income. It had been our purpose to design these packages separately so that those who felt that they could not afford the full amount of this protection would have a reasonably good basic health insurance policy available to them at the cost of $10 a month. And we felt that was well within range for quite a few of these older folks. Senator MCNAMARA. You still only reach 120,000 people. Is your rate of enrollees increasing or is it rather constant? Mr. MILLER. Well, to answer the first part of your question first. On the 120,000, we are exceptionally well endowed in New York State with insurance companies and prepayment plans who offer plans to our citizens, and New York 65 is only 1 of the means by which they can secure coverage. There are well over 200 companies actively writing health insurance in the State through insurance agents. Among them are the largest, such as the company by which I am employed. In addition, we have seven Blue Cross and seven Blue Shield plans and a number of individual plans that operate besides those. So the number we cover must be viewed in relation to the proportion of the persons with coverage in the State and as an addition to those who have coverage through one of these other means, we believe that probably New York is ahead of the national average of 60 percent that has been referred to as a proportion of persons with coverage. The second part of your question was to ask whether our enrollment was increasing or not, and I think it is. We have had these 3 enrollment periods, as I mentioned, and we presently insure 120,000, which is significantly more than what we began with at the end of the first enrollment period. We also have plans for developing our marketing possibilities more fully. The State legislature this year extended our authority at our request to permit us to provide benefits for a retired person who might live in New Jersey, for example, and who had worked for a New York employer, or a person who was over 65 and working in New York and living out of the State. We hope to use that as another means of developing our coverage further. Senator MCNAMARA. You indicated this plan had been in effect only about 18 months? Mr. MILLER. That is right, sir. Senator MCNAMARA. Do you have any questions or comments, Senator Fong? Senator FONG. Yes. You have five plans here; is that right? Mr. MILLER. That is right, sir. Senator FONG. Under your basic plan, which costs $10 a month, or $120 a year, you will pay $18 a day up to 31 days; is that correct? Mr. MILLER. For hospital room and board; that is right, sir. Senator FONG. There is no deductible? Mr. MILLER. There is no deductible. Senator FONG. So, you are paying $558 if a man stays in the hospital for 31 days? Mr. MILLER. That is right. Senator FONG. You pay miscellaneous hospital charges of $150? Mr. MILLER. That is right. Senator FONG. Doctor's fees in hospital up to $145; $6 per day first week, $5 per day second week Mr. MILLER. That is just an elaboration of the $145. The $145 is the maximum that may be required for someone in 31 days and it is arrived at at $6 per day for the first week, $5 per day for the second week, and $4 per day thereafter. Senator FONG. This refers to $145 doctor's fees? Mr. MILLER. Yes. Senator FONG. That is only for the payment of doctor's fees? Senator FONG. Then for the convalescent nursing home, up to $7.50 a day, following at least 5 days' hospital confinement? Then you have coverage here, surgery in or out of the hospital, and radiation therapy for malignancy, according to the schedule, up to $250. Suppose a person needs all of the benefits that you give here; how much are you making available to him? Mr. MILLER. Well, if you simply add up all of the maximum benefits you get something that is, I believe, in excess of $1,000. Senator FONG. You gave that package for $120 a year; is that correct? Mr. MILLER. That is correct, sir. Senator FONG. With this package here, how much of the medical cost of the average person-say you had 120,000 people, it has been in operation for 18 months-what percentage of the medical costs would this take care of? Have you been able to figure that out? Mr. MILLER. We designed our plans with the intention of, we hoped, being able to cover about 75 percent of the hospital costs within the limits of the benefits provided, and for the surgical charges we have incorporated into our benefits, and deliberately so, the Blue Shield schedules that were being used by the Blue Shield plans and honored by the doctors in the State for persons under $6,000 of income. So, we hoped that in relation to the surgical and the other medical fees that our benefits would cover the major part of the load for those. 33-420 0-64-pt. 2 |