the first 17 months of the MAA implementation averages out to $1,959,823 a month or $23,517,876 for a year of operation. The new MAA provisions effective September 1, 1963, are estimated to bring the annual cost to $26,462,876. With the added scope of the program cleared during the new State administration, the future in Pennsylvania should prove conclusively that local and State governments can meet problems and administer programs without additional Federal intervention and control. COST OF H.R. 3920 Remember that estimated figure of $26.5 million, given for the cost of providing medical care for the aged needy in Pennsylvania for a year? If H.R. 3920 should be cleared by this committee and passed by the Congress, Pennsylvania taxpayers would be forced to pay $152 million more in taxes the first year alone And this estimate is based on the administration's own figures, despite the fact insurance actuaries believe the proposal will cost at least twice the administration's estimate. The bill which you are considering would trade a medical care for the aged program that works and will cost $26.5 million a year in l'ennsylvania for an inadequate compulsory program that would cost the States residents a minimum of six times that amount. To provide some added statistical information, there are approximately 1,129,000 Pennsylvanians over the age of 65. About 49,000 of these older residents of the State are old-age-assistance recipients under the Federal-State public assistance program which has been in operation in Pennsylvania for more than 25 years. Subtracting 49,000 old-age-assistance recipients from the total number of Pennsylvanians over the age of 65 leaves 1,050,000. Certainly, some of these 1,080,000 aged persons experience hardship in meeting the expenses of their medical care to the same degree that they experience hardship in meeting any of their other living costs. What our hospital survey would indicate, however, is that the portion of the aged who require hospital care has more means available for meeting the cost of that care than does any other segment in l'ennsylvania. What's more, 85 percent of all persons 65 or older are in good health, The Pennslyvania Medical Society almost hesitates to mention the above facts. It almost fears that the figures will provide certain segments of government with ammunition for demanding a program of medical care for those under 65, financed with an added social security tax. Those persons who are unable to meet living expenses certainly require help, whether those expenses are for food, for shelter, for clothing, for transportation, or for medical care. The Pennsylvania Medical Society will always be in the forefront of those who help that segment of our population which needs help. It would seem, from the survey and rechecks conducted in our State that fewer than 1 out of every 100 persons over the age of 65 who are hospitalized does not pay his or her hospital bill or have it paid under the Kerr-Mills law. I'm sure that most nonpaying persons have just reasons for nonpayment, but do the members of this committee feel that in order to pay part of the hospital bill of that 1 person out of 100 in Pennsylvania, there should be established a massive taxation and administrative paycheck-eating monster to pay for some of the hospital costs of all 100 persons? INSURANCE PROGRAMS GROWING The Pennsylvania Medical Society wholeheartedly believes that the members of this committee cannot objectively weigh the facts that we have presented and arrive at a conclusion other than the obvious one-that the legislation you are considering simply is not needed, that legislation already enacted into law provides an adequate, fair vehicle for meeting the medical care costs of the overwhelming majority of those over 65 who need help. What we have presented so far only scratches te surface of the evidence that shows the concern and activities of our society in the areas of medical care for the aged. The Pennsylvania Medical Society has provided the stimulus for a Blue Shield senior citizens insurance program. It's being offered on a voluntary basis to Pennsylvanians 65 years of age and older and, like previously existing Blue Shield programs, permits persons to secure voluntary prepaid medical care insurance regardless of age or condition of health. Under the new senior citizens insurance program, an individual with an income of less than $1,500 or a person with dependents having an income of under $2,400 will receive covered services without additional charges from the 15,000 Sub Pennsylvania physicians who have adjusted their fees to participate. scription rates for this plan are $1.83 a month for a single person, and $3.66 for a subscriber with one or more dependents. These low rates are possible because the physicians have voluntarily lowered their fees. At the present time, over 4 million Pennsylvanians have Blue Shield coverage and can continue this coverage past the age of 65. Blue Shield presently covers a grand total of 371,482 persons over the age of 65 in Pennsylvania. In addition, many other persons have other forms of health insurance. Pennsylvania's Blue Cross plans offer over 65 coverage to individuals and to groups, and feature extended protection, including nursing home care in addition to hospital care and visiting nurse care. SOCIETY WORKS WITH AGED The Pennsylvania Medical Society has been supporting a move in Pennsylvania to make it legal for insurance carriers to band together to provide a nonprofit program similar to the "65 plans" in several other States. Such statewide underwriting pools are gaining favor across the United States and our society hopes that they will continue to grow where needed. It will support legislation to enable the creation of such an underwriting pool in Pennsylvania. To touch on some of our society's other activities in connection with the aging, the Pennsylvania Medical Society was instrumental in organizing the Pennsylvania Council on Health Care of the Aging. The council is composed of representatives of hospitals, nursing homes, dental, pharmaceutical, nursing, and medical organizations. This council has been supporting conferences on health care of the aging throughout the State. Our society's commission on geriatrics, established in 1952, has been assisting the development of appropriate courses in medical schools which will acquaint medical students with the problems they will be facing in the care of older citizens. This same commission has been instrumental in developing programs for the X-ray screening of older persons and has cooperated with various departments of State government in advising them of the necessary requirements for nursing homes. Our society has been stimulating the development of home care services which are of principal interest to the aged. Nutritional manuals have been distributed by our society to help physicians and others provide proper diets. What have the individual Pennsylvania physicians been doing? They have a long and commendable history of supplying eight different types of medical facilities for the aged and needy. Traditionally, physicians working in all of the facilities and as individuals and private practitioners of medicine have offered freely and generously their services in furnishing medical care to the aged in Pennsylvania. Our hospitals are partially reimbursed by the State for the care that is rendered to needy patients, but I would like to point out that the physicians working in these hospitals caring for these patients have never received any reimbursement. These doctors provide medical care needed by indigent patients and prefer not to have more of their time, after caring for every such patient, devoted to filling out involved government forms. Are the free services a physician provides impossible to describe in dollars? No, according to the publication New Medical Materia which took a random sampling across the United States in 1960 and came up with this report: That Pennsylvania physicians provided $41,969,000 worth of free care during 1960. This free care was apportioned on the following basis: 28.4 percent resalted from treating private patients without charge; 37.3 percent resulted from hospital ward service; 24.3 percent was provided in outpatient clinic service; 10 percent resulted from free care to all other persons, including physicians' relatives, students, campers, amateur athletes, clergymen, emergency cases, and charity cases. Many of us, after discussions with our patients, are of the opinion that the majority of the citizens of Pennsylvania prefer to provide for their own health care upon retirement, on a voluntary basis. It is our considered opinion that the aged in Pennsylvania who need assistance for their medical care, do receive it through the aid that is already available from Federal, State, and local governments, and with the continued cooperation of those who provide health care. To summarize this area, the physicians in cooperation with the health insurance plans have made available voluntary insurance that will protect those aged whose life savings would be endangered in the event of a prolonged illness. That such voluntary insurance is meeting the need is evident in the results of the hospital survey that we have presented to you here today. "PROBLEM" IS DIMINISHING Our survey showed that more than three out of every four persons 65 or older admitted to hospitals took care of their hospital obligations with Blue Cross, other types of health insurance, and with cash. With this must be considered the fact that health insurance plans are still growing and that with their current noncancelable features, the number of insured is certain to increase in the years ahead. In other words, the legislation you are considering is aimed at a "problem" that is diminishing every year and will continue to grow less and less. Kerr-Mills can and is meeting the "grey area" between indigency where old-age assistance meets the problem and ability to budget for health insurance. It all leads us to the conclusion that there is no need to force each and every working person to submit to an added tax under social security to provide a program of Government-directed payments for a portion of the medical care expenses of all persons over the age of 65. The proposal being considered by this committee today would give aid to anyone over the age of 65 whether aid is needed or not. It is a proven fact that many of our social security recipients have adequate funds to buy the luxuries of life as well as to provide for their own medical care. In fact, 200,000 older Americans had incomes of $20,000 or more in 1962. To tax a less fortunate individual to provide a fund for payment for the more fortunate is so far from the principles of democracy that it causes us to shudder. We have found that Pennsylvanians over the age of 65 believe in the principles of democ racy and wish to be free and independent and have bought private insurance for their own protection. These individuals can choose their own hospital, can select their own doctor, and are not being subsidized by a younger and frequently less fortunate generation. For anyone or any group to insist on the passage of legislation to provide aid for an area where the need is not clear causes one to question the motives behind such urgings. Previous proponents of legislation much like H.R. 3920 publicly admitted that their proposals were aimed at providing a foot in the door so that the step could be followed with the full-scale adoption of socialized medicine with its heavy tax burden and its Government control of the hospitals and the medical profession. NOT AN INSURANCE PROGRAM The proposed law will provide care in only those hospitals which have made agreements with the Federal Government. It further provides for the payment of funds to hospitals for care rendered by pathologists, radiologists, anesthesiologists, and physiatrists. These people are all doctors of medicine, practicing in a specialized field of medicine. How soon will you be asked to include the surgeon, the internist, or the general practitioner? How soon will you be asked to provide complete hospitalization and medical care for every man, woman, and child in the United States once our aged, regardless of need, have become direct wards of the Federal Government? H.R. 3920 is designed as a foot in the door. With its social security financing mechanism, it taxes many who can afford it the least to pay for the current medical costs of many who do not need and do not want the help. It is not an insurance program. It would use current income to pay for current costs which would mean that as the percentage of our over-65 population increases and as the cost of hospitalization rises, the tax rate would have to be increased again and again. H.R. 3920 is a monster that would eat away chunks of the incomes of those in the lower income brackets. With the evidence that we have presented, with the Federal Government returning tax dollars to the individual States through the Kerr-Mills law, the aged in need will continue to have adequate medical care at the lowest possible cost and without further endangering the freedom of you, me, or our children. The legislation that you are considering here today is a threat to our cherished freedom and democracy and we urge you to abandon it as not only undesirable legislation, but as unneeded legislation. On behalf of the Pennsylvania Medical Society, I wish to thank the members of this committee for this opportunity to present our views. You have been kind. I hope you feel that we have been convincing. (Appendices A and B follow :) [Appendix A] KERR-MILLS PROGRAM IN PENNSYLVANIA JANUARY 1962 TO SEPTEMBER 1963 The medical-assistance-for-the-aged program in the Commonwealth of Pennsylvania specified the particular elements of medical care within the scope of the provisions as follows: (1) Inpatient hospitalization; (2) posthospitalization home care when provided by a hospital; (3) nursing care in the home; and (4) nursing home care in county institutions. The law did not authorize medical-assistance-for-the-aged payments for any other elements of medical care. The amount of the assistance to be provided to eligible beneficiaries also was specified in our public assistance law. The beneficiaries of our State medicalassistance-for-the-aged program were defined in the public assistance and support law as follows: (A) Over-65 residents of the State who did not have a spouse or dependent child living with them were entitled to medical care within the scope of the program when that medical care costs more than the sum of these four amounts: (1) The amount by which the clear market value of real and personal property exceeded $1,500, excluding his home, household furnishings, car, and life insurance with cash surrender value not exceeding $500; (2) the amount legally responsible relatives (spouse and children) were financially able to pay toward the cost of the medical care as determined by the State department of public welfare; (3) six times the difference between the aged person's average monthly gross income and $125; and (4) the amount of any health insurance or other benefit available to meet the cost of the medical care. (B) Residents who had a spouse living with them were entitled to specified medical care when the cost of that medical care exceeded the sum of these four amounts: (1) The amount by which the clear market value of the real and personal property belonging to the person or spouse exceeded $2,400, excluding their home, household furnishings, car, and the spouse and aged person's life insurance with cash surrender value not exceeding $500; (2) the amount legally responsible relatives (children) could pay as determined by the State department of public welfare; (3) six times the difference between the average monthly combined gross income of the person and spouse and $200; and (4) the amount of any health insurance or other benefits available to meet the cost of medical care. Aged residents of the State who had dependent children living with them were eligible for specific care when the cost of that care was more than the sum of the four amounts given in paragraph (B) above, except that the income figure in item (3) was increased by $41.66 for each dependent child. The Pennsylvania support law stipulated in general terms how the amount required of legally responsible relatives was to be determined. The same law also made the medical-assistance-for-the-aged recipient's home and other property available after death for repayment of the amount granted. Although it prohibited the placing of any lien against the recipient's property during his lifetime, except when that payment was improperly obtained, the law makes an individual's property liable for medical-assistance-for-the-aged repayment or, for that matter, any other type of public assistance granted to or in behalf of the individual's spouse. [Appendix B] Survey of 10 general hospitals in Pennsylvania conducted in August 1963, of 65-and-over admissions Survey of hospitals A through H covers 1962 calendar year, survey of hospital I covers 1962-63 fiscal year; survey of hospital J covers January 1 to June 30, 1963. (Explanation follows:) 47-140-65-pt. 2—11 Survey data.—The hospitals checked in the survey cover a broad range of geographical and economic areas in Pennsylvania. They range from hospitals in the largest cities to community hospitals serving rural areas. All except J serve areas where the number of residents age 65 and older is somewhat above the national average. Hospitals A through G serve highly industrialized, moderate to low-income areas which as of July 1963, were averaging between 12 and 15 percent unemployment. Hospital H also serves an industrialized area, but the unemployment rate is 8.6 percent and it is in a moderate- to low-income section. Hospital I serves an industrial-rural area, the unemployment rate is 6.1 percent and it is in a moderate- to low-income section. Hospital J serves a large metropolitan highly industrialized area with an unemployment rate of 7 percent. It is in a moderate-income area, but as a teaching hospital, handles more clinic (free) cases than the average. Time changes statistics.-Earlier this month, we rechecked several of the hospitals involved in the survey to determine how time changes the survey results. Hospital H, for instance, with percentages in all categories close to the total survey averages, was rechecked. This is what we found: In 3 months, the percentage of nonpaying patients age 65 and over dropped from 2.5 to 0.4 percent. There was a resulting increase of 2.1 percent in the number of patients paying with private insurance or cash-from 29.4 to 31.5 percent. Hospital officials tell us that this change is a natural one-that included in the original group of nonpayers are such patients as accident victims whose temporary nonpayment occurs because of pending litigation; persons who need a few weeks to withdraw money from a time savings account; some persons, who, although eligible for Kerr-Mills assistance, refuse it because they prefer to meet their own obligations; and, a few real hardship cases generally reflected in the less than 1 percent of nonpayers that ultimately result. The experience of hospital H is not unique. In spot checking other hospitals in the original 10, we found their percentage of nonpaying patients age 65 and over also has been reduced since August. These hospital officials tell us that the final payment picture cannot be obtained for at least a year after the patient's release from the hospital. Senator ANDERSON. Any questions? Senator SMATHERS. I have no questions. Thank you, Doctor. I stated, Doctor, that we got very little testimony on what the doctors thought about the correctness of the $72 payment that is going to be made per year for these extra services. If you have any doubts as to the financial solvency of the program we would like to have them raised. We would be glad to have that comment. I know you feel eldercare is a good way of taking care of it. That income is a proper way to evaluate these things. I was supplied a memorandum a while back that in 1961 there were 17 Americans with incomes of more than $1 million a year, who paid no taxes of any kind. That is true because of the oil depletion allowance, capital gains, trust arrangements, and so forth, and they would be eligible under eldercare because they have no income, taxable income. The had a $1 million income. So you do have problems in these fields, and I just hope you would bear in mind that we have problems, too, as we start to deal with it in the Finance Committee. Senator DOUGLAS. I ask consent that there be printed as a part of today's hearings the statement of Dr. A. A. Adams, president-elect of the American Chiropractic Association. (The statement referred to follows:) STATEMENT BY DR. A. A. ADAMS, PRESIDENT-ELECT OF THE AMERICAN Mr. Chairman and members of the committee, the American Chiropractic Association is fully in accord with the objectives of Federal legislation to provide |