They say, "Well, doctor, can't this be done in the hospital?" And the doctor says, "Yes, it can be done in the hospital." Then they say, "Well, you see, I haven't used up my hospital insurance for this year and I might just as well go into the hospital." So, the doctor being an accommodating man and also being a man who has to satisfy his patients like any other fellow that is dealing in goods, whether it is advice or material goods, says, "Well, yes, this can be done in the hospital."

So, they go to a hospital and they take up a bed for 5 or 6 days which is needed by somebody who is not just having a diagnosis. The insurance company cannot protect themselves against that first 5 days' expense which is very considerable. There should be deductions of the first 3 to 5 days on the board and room only. I say that for this reason: If the patient has an emergency and has to go into a hospital, they ought to have protection insofar as their catastrophic expense is concerned. Believe me, laboratory work is catastrophic expense, Mr. Chairman. I have paid a lot of money myself for it and I have had a lot of patients who have had to pay a lot of money for it. It is much more in many cases than board and room.

But, suppose a patient comes in with an emergency case, and he has to have laboratory work and he has to have operating-room service and he has to have blood transfusions or whatnot, or anesthetic which in itself runs up much more in the first 3 to 5 days than any possible room they could get on a board and room basis.

To eliminate and I used an unfortunate term when I was here before "chiseling," and I do not mean chiseling but I mean taking human advantage of a chance to save a little here and a little there, which is excusable, this is necessary. Certainly, that is what runs up the bill of expense for the fellow who wants insurance to protect himself against catastrophe.

Now, if the bill is written, it seems to me, in this form, it gives some discretion. It gives a great deal of discretion on how these policies will be protected and how the insurance companies will be protected by this Government reinsurance. I think it leaves the thing wide open to a lot of rulings. I had considerable experience in the Government service and I also had a lot of cooperation from the people that I worked with. But we had to get rulings after that outfit had been running for years and years on what we could do and what we could not do.

Now, as near as I can figure out, the attorneys based those rulings on the intent of Congress, as near as they can find out by reading the records when the law is not entirely clear. In this, as I see it, there are a lot of things that could be interpreted as the intent or the nonintent of Congress. Then, you would have a jamb between a lot of fine print between the Government and the insurance companies, instead of a lot of fine print between the insurance companies and the patients. That is the way it now exists.

I would like to see the fine print eliminated and the misunderstandings eliminated so far as possible by seeing the Congress definitely state what this reinsurance covers and how it protects the companies and how it protects the patients. Then, let the companies go ahead and use this as the banks do their insurance on bank deposits. There is not a bank in the country that does not advertise that their deposits are covered by Federal insurance.

The minute these companies had a chance to advertise that they were covered by Federal reinsurance and that this was a policy that was covered by the Government's wish to help the people of this country get adequate medical service for a price they could afford to pay and that the Government was not going to let either the companies or the individuals chisel on it, it could be definite enough so that that is that and everybody can read it. They do not have to get a pair of magnifying glasses to find out what is in the back of their policy. That is all I have to say, Mr. Chairman, about this thing, as a whole, but that to me is the principle that reinsurance ought to cover from the standpoint of the patient, the Government and the insurance companies, or whoever is going to protect these patients against catastrophic loss.

The CHAIRMAN. Well, doctor, the counsel that you have given us is greatly appreciated by the committee, because we realize that it is based upon an experience of yours which has been very large. Your feeling is such, judging by the report that was made by the Commission of which you were chairman, that there was some obligation resting upon Government or individuals to care for what we recognize is a problem. Your advice and counsel comes to us in a very strong way because we know your personal inclination and what you say is based not upon a desire to avoid responsibility but to carry it to the fullest extent possible and in the best way possible.

Are there any questions, gentlemen?

Mr. DOLLIVER. Doctor, I certainly join with what the chairman has said about your experience and wide knowledge in this field.

I would like to discuss with you one segment of the health field about which I am sure that you are quite familiar due to the various studies you have made and that have been made under your supervision.

One of the class of peoples who need medical care are sometimes referred to as the medically indigent, that is people who are unable to pay for proper medical care for themselves and their families. Is that a proper term?

Dr. MAGNUSON. That is a proper term, sir.

Mr. DOLLIVER. Now, doctor, is it not true that in every State there are local provisions for taking care of such persons if they get into a medical difficulty of some kind?

Dr. MAGNUSON. Yes, sir.

Mr. DOLLIVER. And, are you

Dr. MAGNUSON. I was just going to add that the people I referred to were the people who can and will budget and are not medically indigent. The medically indigent ought to be left to the local community to judge whether they are medically indigent or not.

Mr. DOLLIVER. The thing I am thinking about is in my own State of Iowa and I know from personal experience and knowledge there that any person who is unable to pay and so recommended by proper authorities, can secure medical treatment and surgical treatment and hospital care to the extent that is needed.

Dr. MAGNUSON. That is right, sir.

Mr. DOLLIVER. Am I right in saying that that pattern exists all over this country?

Dr. MAGNUSON. Absolutely.

Mr. DOLLIVER. There is nobody, then, in that category of medically indigent who is not already taken care of?

Dr. MAGNUSON. That is my opinion, after having practiced medicine for 45 years. I have not seen anybody suffer for lack of money or for medical care if they didn't have any money. The people I have seen suffer are the people who did.

Mr. HARRIS. If you will yield to one question there and I think it is highly important. I intended to ask it of another witness yesterday or the day before.

Doctor, if you know, what is the average percentage of charity work that the doctor in this country gives to people?

Dr. MAGNUSON. Do you mean, sir

Mr. HARRIS. How much of a doctor's practice is charity?

Dr. MAGNUSON. Well, when I was practicing I figured that onethird of my time was given to charity and teaching without compensation. Now, some doctors figure that the bills they do not collect are charity. I never figured that. I think, perhaps, if I figured that, it would add something to it. But I think that is a matter of business and if the doctor overcharges the patient, sometimes they will not pay it and sometimes I do not blame them for not paying it. On the other hand, the county hospital in Chicago, for instance, and all of our city hospitals, are served by medical men of the top bracket without ever any compensation at all. Everybody gets paid except the doctor. They want it that way, because that is their duty to the community. That is one of the things that we are brought up on from the time we start into medicine and before. That is that a doctor must contribute his services for the good of humanity, and he must not get any patents on things that will raise the price of these things that he gets out of research work for the benefit of humanity.

Mr. HARRIS. Thank you very much.

Mr. DOLLIVER. That is right in line with what we are saying. Now, having heard your testimony, that people in the medically indigent category are generally well cared for, this bill, as I understand it, is directed toward two problems that are currently existent. One is the problem of cancellable insurance and the other is the problem of major medical disaster.

Now, is it your feeling that a Government reinsurance would help solve those difficulties?

Dr. MAGNUSON. Yes, sir. It is only in this way, that as I see it these companies all have their own policy and whether they be Blue Cross or Blue Shield or a stock company or whatnot, they put certain limitations on their policies. I will say that they are putting future limitations on them as they get more experienced. It is the way if something could be done to make that company feel that they were not going into the red if they wrote a broad coverage policy, and when I say "broad coverage" I mean covering accidents and disease that disable people at any age-I could not get insurance now in any company. I am beyond the age.

Mr. DOLLIVER. I wanted to get your categorical opinion on that one question and I yield the floor now.

Mr. HALE. You say you could not get insurance in any company? You do not mean Blue Cross and Blue Shield. You can get that. Dr. MAGNUSON. I am past 70.

Mr. HALE. They will not take you in Blue Cross?

Dr. MAGNUSON. I do not know, but I do not think so, because the American College of Surgeons had just gotten out some information on that.

Mr. HALE. I remember I questioned one of the Blue Cross witnesses and it is true that he said he did not take new people after 70, but if they had people before 70, they would carry them on through. Dr. MAGNUSON. I think that is true, Mr. Hale.

Mr. HALE. You cannot get it new, but you can continue it on if you have it before you reach 70.

Dr. MAGNUSON. Yes, sir.

The CHAIRMAN. May I make a suggestion that those who question the witness have in mind that the House will be convening at 11 o'clock and I suppose we will be called shortly after 11 and if each one in the first turn around, so to speak, could limit their questions so as to give everyone an opportunity, I think it would be appreciated by the committee. That has no reference to any particular person, but it is just a suggestion so that everybody may have an opportunity. Mr. PRIEST. I just have one question, Mr. Chairman.

Dr. Magnuson, I did not quite understand whether it was your opinion that insurers who might be protected by a reinsurance program should advertise that fact as the banks do. You mentioned it and I did not quite get your opinion on that point.

Dr. MAGNUSON. Well, I think they will. I do not think they even have to have permission to. If this thing were set up so that people would know that the insurance policy that these people were selling them had been subsidized-that is not a good word either, but had been guaranteed-by the Government to carry it from start to finish and it was not going to be canceled if they had a serious illness and that it would go on after they got to be in their old age, it would give a much broader coverage. As I understand insurance, the more people they can cover the lower they can make their premium.

Mr. PRIEST. I understood that or thought that was your position but I wanted to be sure. Thank you, doctor.

Mr. ROGERS. Doctor, you made the statement, I believe, that you could not get insurance now because of the fact that you were 70 years of age. Do you think you would have any difficulty in getting insurance in a company if the Government would pay whatever loss

there was?

Dr. MAGNUSON. I do not know that I quite understand that.

Mr. ROGERS. Do you think that there is any doubt but what you could get some insurance if the companies knew that they would not sustain a loss on you?

Dr. MAGNUSON. If they knew they would not sustain a loss, sure, anyone would bet on a sure thing.

Mr. ROGERS. Well, then, these companies would bet on a sure thing if they knew the Government by giving reinsurance would pay the loss?

Dr. MAGNUSON. Yes, I think so.

Mr. ROGERS. Therefore, they would be kind of lax in their writing of the policies?

Dr. MAGNUSON. Yes.

Mr. KLEIN. Doctor, I have just one question. In the testimony that we have heard, it indicates that 75 percent of the people in this country who earn less than two or three thousand dollars a year are not covered by any insurance whatsoever. I am talking now of this medical insurance. Do you think that if this bill were in effect, it woud have the effect of extending this or some type of medical insurance to those people in that class? They are not what you might call the "medically indigent" and we know that is a public problem. We are talking about people who want to pay their own bills and do not want to be on charity and that group who cannot afford to pay the present premiums. Do you think if this bill were enacted it would extend to those people this type of coverage?

Dr. MAGNUSON. I think many of them would. Many of those people that you speak of have budgeted for radios and television and automobiles and that sort of thing. Now, it just depends upon how provident they are whether they are willing to budget for this as well, if they want to pay their own bills.

Mr. KLEIN. I did not mean to interrupt you. Did you finish your statement?

Dr. MAGNUSON. Yes.

Mr. KLEIN. They are very provident, let us say, but they cannot afford the present premiums. Do you think as a natural result of this type of reinsurance, it would make the premium lower so that those people could afford this insurance?

Dr. MAGNUSON. That is my thought in the matter; yes.

Mr. KLEIN. I might tell you that the insurance companies do not think so. They do not believe that this would have that effect. In other words, even some of the insurance companies who were advisers on this plan, have stated that. I do not want to go into that, however, with you, Doctor, and I thank you.

The CHAIRMAN. Are there any other questions?

Mr. THORNBERRY. Now, may I ask you this, Doctor? In connection with what Mr. Klein had to say, is it your thought that the program contemplated under this legislation should provide reinsurance to the groups who furnish medical insurance on the basis of whether the risk is insurable or on the basis of seeing to it that more comprehensive coverage would be afforded to the people of the United States? Dr. MAGNUSON. I think if health insurance is any good at all it ought to take the people as a whole.

Mr. THORNBERRY. Mr. Klein referred to some previous testimony, where it was asserted that only insurable risks would be covered by this bill. Now is it your thought, and I am not trying to get into another field, not to be so concerned about the soundness of the plan as you are that whatever Government money is put into the plan is to see to it that there is a wider coverage on medical insurance or would you want the test to be based on the financial soundness of the plan or that the Government would get all of the money back it puts into it? Dr. MAGNUSON. No, sir.

Mr. THORNBERRY. That is all.

Mr. HALE. I just wanted to make sure that I got from your testimony the impression that you meant me to get. Do I understand that you feel that in all of these health insurance policies there should