and published reports of insurance associations, health insuring plans, Government agencies, and hospital and medical groups.

Our services to various public or groups include the preparation and distribution of a series of regularly issued publications offering a broad view of the health insurance field. From time to time, the institute has prepared and distributed pamphlets on specific aspects of health insurance.

Because the institute is essentially an information and data transmitting organization, as we indicated in our responses to the specific questions submitted by you, Mr. Chairman, the institute feels it can best contribute information to the subcommittee on the availability of health insurance offered by insurance companies to persons 65 years old and over.

As we indicated in our letter, some of the subjects which the subcommittee is interested in are not within the scope of activity of the institute. However, we publish an annual report which may have some bearing on the retention of health insurance by employed people at the time of retirement. This study was referred to in our response to question No. 3 of those submitted to us by the subcommittee.

The most recent report, covering 1963, was based upon a survey of 47 insurance companies which accounted for some 75 percent of total group health insurance premiums written by insurance companies in the United States in 1962. This analysis was taken from a sample of new cases underwritten by reporting companies in 1963. It indicates the types of insurance arrangements those employees of companies reported on will have at retirement, and this can be a broad scope from those in the early twenties up to those in the fifties or

beyond.

I would like to quote from this publication:

Out of a total of 317,301 employees eligible for hospital and medical care benefits, 70.6 percent had the option to continue their health insurance into retirement by converting their group coverage to an individual policy.

Some 80,051 workers, 25.2 percent of those surveyed, had the right to remain with the insured group after retirement. Barring duplication of policies, the sample study found that 82.6 percent of the employees under hospital and medical care protection had the right to retain their health insurance upon retirementeither by conversion to an individual policy or by continuation under a group policy.

A copy of this publication has been made available to the subcommittee. With respect to the availability and cost of insurance, the institute would like to present to this subcommittee the information it has collected. This information is contained in a booklet, "Report on Guaranteed Lifetime Health Insurance; for Persons Over 65; for Persons Under 65."

Every effort was made to assure that each of the three editions of this booklet published by the institute provided as complete a listing of insurance companies and associations as possible although it is not all inclusive.

The first edition provided information as of mid-1961. At that time 66 different companies and associations were listed as providing some 126 guaranteed-for-life policies and plans.

The second edition, published as of January 1, 1962, showed 81 companies and associations offering 157 guaranteed-for-life policies and plans. The third edition, published as of July 1, 1963, listed

95 companies and associations offering 191 such insurance arrange

ments.

The latest edition broke down into eight categories the health insurance programs available from insurance companies to those in or near retirement. Each category showed the premium range of the various policies and plans for a person at a selected age which was done for purposes of example. The range of benefit provisions in the policies were listed by company or association, and the address of each organization was given.

The booklet shows a wide-ranging variety of policies and plans which can be tailored to the varying needs of families. A copy of the latest edition has been made available to the subcommittee.

The booklet lists plans available on a group, mass enrollment, or individual basis. Because this subcommittee has heard, or will hear, from representatives of these mass enrollment and group plans, we will concentrate on the programs available on an individual basis. Even more than the other plans, the individual policies show a wide range of benefit provisions and of premiums. Among the many plans, for example, the institute booklet lists guaranteed renewable hospitalsurgical expense plans available to a 65-year-old man.

For instance, one company offers a plan which would pay $10 a day toward hospital daily room-and-board charges for up to 30 days; all of the first $100 of miscellaneous hospital expenses, and 80 percent of the next $250 of such expenses; a $200 maximum surgical schedule; $3 a day for in-hospital doctor visits for up to 30 days, and various other expenses. The premium for this 65-year-old man would be $86.60 a year.

Another company, for example, has a plan paying $30 a day for hospital room and board for up to 180 days; $750 in miscellaneous hospital expenses; and a $600 maximum surgical schedule. The premium for this individual at the same age would be $207.80. A third company has a plan, to show the variety of plans available, paying $50 a day for room-and-board charges in a hospital for up to 365 days; $1,000 for miscellaneous hospital expenses, and a $1,000 maximum surgical schedule.

The premium is $547.15 a year. While this latter example is obviously for an individual who would want the finest accommodations available and also who would have to pay a substantial premium. but it does illustrate the breadth of coverage being made available at widely varying premiums.

The programs listed in these booklets indicate the broad range of policies offered by insurance companies to people in or near retirement. And since the publication of the third edition additional companies have announced new plans and others have announced broader benefit programs, particularly of the major medical variety.

I recognize that the information we are able to provide your subcommittee is necessarily limited in relation to your broad scope of study. We hope the information the institute has provided will prove useful in your inquiry of private health insurance for the aged.

Senator MCNAMARA. Thank you very much. I am sure the information you provide is helpful in a general way.

You do stress the fact that your statistics are compiled from information put out by various insurance companies plus some queries that

you have directed to these companies. Therefore, you indicate that you take no responsibility for the figures, but that these are insurance company figures?

Mr. WILLIAMS. They are not gathered by the institute, Senator. Senator MCNAMARA. They are used by you and you take the figures without going behind them?

Mr. WILLIAMS. That is right, we accept the figures as they are given to us, and also in our reporting we give the references.

Senator MCNAMARA. Your press releases and publications that you have been putting out on the subject are really a reflection of the statements made by the organizations that are members of your institute?

Mr. WILLIAMS. I am not quite sure I understand your question, Senator.

Senator MCNAMARA. Let me see if I can make it plainer.

I started out by saying you assume no responsibility for these figures; you are using figures that have been furnished to you? Mr. WILLIAMS. That is right.

Senator MCNAMARA. Out of this kind of data, then, you put out the publications that you refer to and the press releases that emanate from your organization; this is correct?

Mr. WILLIAMS. That is correct.

Senator MCNAMARA. But you do not go beyond that?

Mr. WILLIAMS. No, sir.

Senator MCNAMARA. Thank you very much.

Do you have a comment or question?

Mrs. Neuberger?

Senator NEUBERGER. When you change from this group coverage to an individual policy, does the cost change?

Mr. WILLIAMS. It would change; yes, Senator. To what extent I do not know, because it varies from company to company, depending upon the group plan that is in effect that the person would be going from into retirement. But there would be a change in premium; yes, ma'am, from the group policy.

Partly that is true also because in most of these group plans, all or part of the costs are paid by the employer.

Senator NEUBERGER. But I am referring to this quote from your booklet on page 3. It seems to make a virtue of the fact that if you have been carrying insurance, yes, you keep right on carrying it; but, of course, if you convert to an individual policy, I think it would be more costly.

The institute, of which you are vice president, has advertised paid up in full at age 65.

Now, what does that mean?

Mr. WILLIAMS. Are you referring to the booklet that I referred to in my statement?

Senator NEUBERGER. No, press releases and other advertisements that came to us carried an ad called "Paid Up in Full at Age 65 Policy." Now, when did you pay it up in full?

Mr. WILLIAMS. I do not recall that we had any ad like that, but we do report on the various types of plans and paid up at 65 is one of the many types of insurance arrangements that we refer to.

Senator NEUBERGER. How do you pay up at age 65? I mean, do you pay up a lump sum of $10,000 or what?

Mr. WILLIAMS. Oh, I see what you mean. That type of policy is if it is taken out by an individual at 25, he pays the regular premium and then at the age of 65, he does not have to pay any more and it accepts itself in force.

Senator NEUBERGER. But when he took it out at age 25, he probably though that $10 a day hospital would be adequate coverage, so at age 65 he finds that it is not adequate coverage; is that not true?

Mr. WILLIAMS. That could happen; yes.

Senator NEUBERGER. This is the fault of insurance versus health care under a social security plan because it does not allow for this big increase in hospital costs that we are talking about, so paid up in full at age 65 is misleading advertising, it seems to me, because it does not tell what you are buying for that cost?

Mr. WILLIAMS. It is the name of a policy and I think when the policy is sold to an individual, it is pretty well clear to him or should be clear in his mind what he is buying.

Senator NEUBERGER. When you say "It is the name of a policy, that is just a name for the policy," reminds me of a story.

We have a dentist in Portland, Oreg., who advertised painless dentistry. This is 50 years ago.

Senator MCNAMARA. Before your time.

Senator NEUBERGER. And the FTC and other such organizations said there is no such thing as painless dentistry, and this man's name was Parker and he had been advertising under the name of Painless Parker, so he went to the bureau of registration in the State of Oregon and had his name changed; his name legally was Painless Parker and he continued to advertise under that. [Laughter.]

So, that is a little bit like this reminds me, "Paid Up at Age 65" is just the name of a policy.

Mr. WILLIAMS. But I do not think the companies have registered it with the bureau. [Laughter.]

Senator NEUBERGER. You do say in your booklet that many companies offer such coverage but how many different people are actually covered by-how many people reach age 65 and find their insurance is all paid and they do not have to pay anything more?

Mr. WILLIAMS. Senator, I do not know. That question was asked us earlier in the letter from the chairman. We just cannot get the information, because it is not kept that way in insurance company records. They do not keep these statistics

Senator NEUBERGER. Then they do not buy it by this name, they do not buy it by the name, "Paid Up in Full at Age 65."

Mr. WILLIAMS. That is why I say it is more of a merchandising name rather than a formal name.

Senator NEUBERGER. Well, how many of these policies are in force right now, do you know that?

Mr. WILLIAMS. No, I do not, Senator.

Senator NEUBERGER. Or how many were sold in this last year?
Mr. WILLIAMS. I do not know.

Senator NEUBERGER. Well, one company that does advertise this is the Prudential. Are they still selling that policy, I wonder?

Mr. WILLIAMS. I do not know, and I think that they could better answer that than I could, because it is their policy.

Senator NEUBERGER. The information that we got is that they had stopped selling it and I wonder if anybody knew why they had stopped selling it?

Mr. WILLIAMS. I think that was their decision and I think they would be the ones who could perhaps supply that information to you. Senator NEUBERGER. What is the purpose of your organization?

Mr. WILLIAMS. We are an information organization established by the insurance companies [laughter] but we do not have all the answers, Senator.

Senator NEUBERGER. Thank you.

Senator MCNAMARA. Thank you very much. Senator Fong, do you have any questions at this time?

Senator FONG. Mr. Williams, you stated that in 1961 there were 66 different companies and associations who are listed as providing guaranteed-for-life policies; that in 1962, you listed 15 more companies; and in 1963 this was increased by another 14 companies.

Now, this field of health insurance is quite a new field; is it not? Mr. WILLIAMS. Yes; comparatively speaking, yes; it is.

Senator FONG. And this field for the aged as far as health insurance is concerned is very, very recent?

Mr. WILLIAMS. That is right, sir.

Senator FONG. With your knowledge of the business, naturally in your type of work, you are called upon to make projections into the future?

Mr. WILLIAMS. No; we are not. We do not try and project into the future. What we try and do, and we are a fairly new organization, Senator-what we try and do is develop what information we can obtain from various sources and make it available to many groups. But we do not go into the forecasting of

Senator FONG. Is it not correct that an insurance company is always looking for different types of policies to present to the public?

Mr. WILLIAMS. Well, yes. Well, in one sense that is correct the way you state it. Another way might be that they are always trying to measure public needs and public attitudes and if they feel that another type of policy would be made available to the public and they would purchase it they certainly would construct a policy that could be sold.

In other words, they are trying to respond to public need and public desire.

Senator FONG. And this is a great public need?

Mr. WILLIAMS. That is right.

Senator FONG. And being a great public need like life insurance, naturally all of these companies will be interested?

Mr. WILLIAMS. Yes, sir.

Senator FONG. And there is going to be tremendous competition in this field; would you say that?

Mr. WILLIAMS. Yes; there is a lot of competition in this field, Senator. In our source book which I referred to, as of December 31, 1962, we list 170 companies who are writing 65-and-over policies.

That is a growth from 1958 of from 108, and there have been additions since that time.