to assume that $3,000 and $1,800 constitute adequate or more-thanadequate incomes.

Under Illinois MAA, individuals who do not have other resources available to them are eligible for benefits if their income is below $1,800. The maximum income requirement for a couple to be eligible is $2,400 per year. Apparently Illinois State officials and the legislature felt this was a more accurate determination of adequacy than the BLS budget. Whether the Illinois Legislature took homeownership and other factors into consideration in arriving at this income figure is not clear, but presumably they gave careful consideration to all factors in the situation of the State's older population.

In any event, by whichever standard is used, it would appear that the vast majority of older persons in the Chicago area whose incomes might be termed "inadequate," are eligible for MAA.

The fact that "only" (to use a word oft repeated in the majority views) 5,474 MAA applications were approved and "only" 2,039 were denied, withdrawn or otherwise disposed of in Cook County (of which Chicago is the county seat), during the first 23 months of the program's operation, reinforces the view that the alleged unmet need has often been greatly exaggerated. Since 192 denials were based on the "family responsibility" provision of the law, this appears an insignificant factor.

Another quote from the majority statement says:

The duration, levels and types of benefits vary widely from State to State. Except for those four States having comprehensive programs (Hawaii, Massachusetts, New York, and North Dakota) benefits are nominal, nonexistent, or inadequate.

Whether a program is "comprehensive," "intermediate," or "minimal" is based on definitions developed by the Bureau of Family Services of the Department of Health, Education, and Welfare with regard to the type of services provided. According to these definitions, which are set forth in the majority report, the administration social security financed proposal would qualify as a "minimal" program, unless one regards services by interns and residents in teaching hospitals and services by anesthesiologists, pathologists, radiologists, and physiatrists in the hospital as fulfilling the qualification regarding "physician services."

The significant fact is, however, that there is no real evidence for jumping to the conclusion that even "minimal" standards according to these definitions can be equated with inadequacy. The type of benefits cannot be isolated from other medical programs in the State. Tennessee, for example, contains no provision for physician services in its MAA program. An agreement by the Tennessee physicians voluntarily entered into and insisted upon by them, however, assures such services to all hospitalized persons unable to pay. In a similar way all of the States (six) referred to in the majority statement as omitting nursing home care do provide such services when needed through their OAA programs.

Continuing examination of the majority views, one finds the state

ment:

Administrative costs of MAA programs remain too high in most jurisdictions. These represent initial costs during periods when the programs are being set up and which are always high. It is too soon to determine actual administrative cost ratios for the program.

22-449-63-5

Another majority statement quotation says:

The distribution of Federal matching funds under MAA has been grossly disproportionate, with a few wealthy States, best able to finance their phase of the program getting a lion's share of the funds. Five States, California, New York, Massachusetts, Michigan, and Pennsylvania, for example, received 88 percent of all Federal MAA funds distributed from the start of the program through December 31, 1962, although those five States have only 32 percent of the Nation's elderly people. New York alone, with 10 percent of the Nation's elderly, received 42 percent of this total.

The five States referred to have 56 percent of the over-65 population in States with MAA. They are urban, industrial States which tend to greater use of assistance programs. Since they are among the States with the highest total and aged population, highest medical costs, and highest utilization patterns, their share of Federal medical funds will always tend to be greater than their share of the population. Still another quote from the majority opinion says:

The congressional intent to extend assistance to a new type of "medically indigent" persons through MAA has been violated by the practice of several States in transferring nearly 100,000 persons already on other welfare programs, mainly OAA, to the Kerr-Mills program. The States have done this to take advantage of the higher matching grant provisions of Kerr-Mills, saving millions of dollars in State costs, but diverting money meant for other purposes.

The Kerr-Mills Act was designed to expand care for all older persons unable to finance it themselves. There is no proof that money has been diverted for other purposes. On the contrary, while the OAA caseload decreased 1.8 percent from May 1962 to May 1963, expenditures have increased 5.2 percent.

A final example from the majority statement says:

The "welfare" aspects of the Kerr-Mills MAA program, including cumbersome investigations of eligibility, plus the requirement in most States that resources of an older person must be depleted to a point of near dependency, have further reduced participation.

The undocumented charge regarding eligibility investigations, if true, could easily be resolved by adoption of an amendment to the Kerr-Mills Act introduced by Senator Dirksen (and previously passed by the Senate, but rejected by the House of Representatives) or a similar change in the basic law.

A simple review of current eligibility requirements in the several States with MAA programs in operation or under development and a relating of such requirements to average per capita incomes and living costs in each will demonstrate the inaccuracy of the charge that "most States" require reduction of MAA beneficiaries to a "state of near dependency."

It should be noted further, with reference to this particular point and the entire majority statement, that careful examination of future developments under MAA, possible, probable, and certain, unfortunately has been given little attention. A number of States have and will have under consideration improvements regarding benefits, eligibility requirements, and other facets of Kerr-Mills operation. Among plans recently approved by State legislatures, but not yet in operation, are some which introduce new concepts.

MAA INNOVATIONS SHOULD BE ENCOURAGED

One innovation is the proposed plan by South Dakota to purchase voluntary health insurance for persons who qualify under the State's MAA program. Although spokesmen for South Dakota discussed this plan with Health, Education, and Welfare Department officials at length prior to adopting the legislation, as of October 10 approval by HEW was not yet forthcoming.

It would appear, however, that it was the intent of the Kerr-Mills Act that States be free to purchase voluntary health insurance for MAA beneficiaries. Encouragement of this type of approach certainly would be appropriate on the part of the Department of Health, Education, and Welfare and all others interested in adequate medical service for older people.

CONCLUSION

In conclusion, it would seem that the majority opinion that— The evidence available after 3 years of Kerr-Mills operation demonstrates conclusively that the congressional intent has not and will not be realizedwill not stand up under even the most casual review.

The fact that much of the data used in the majority statement is based on a period when many States were getting started and some were engaged in perfecting plans authorized, but yet to be inaugurated, underscores the inconclusiveness of the evidence presented therein.

It bears repeating, further, that the preferred method of most Americans for meeting the major costs of medical care is voluntary health insurance. This is true of both young and old. This preference should be encouraged.

Because availability of adequate income wherever possible constitutes the best way to express such encouragement, the highest priority in Federal Government policies relating to older people should be those aimed at improving income and at preserving the dollar's value so such improvements will have maximum beneficial effect.

EVERETT MCKINLEY DIRKSEN.
BARRY GOLDWATER.

FRANK CARLSON.

SUPPLEMENTAL VIEWS OF SENATOR HIRAM L. FONG

It is gratifying to observe Hawaii's medical assistance for the aged program described as one that provides comprehensive services. It reflects the firm desire of Hawaii's citizens to adequately care for their elders. It would appear that all States could do likewise in keeping with their own unique needs and resources.

The comments in the minority views with reference to the prematurity of any current judgment of the Kerr-Mills Act appear to be well taken. The program is new. Despite the comparative speed with which most States have taken action to effect its purposes, more time and experience with the various programs and their continuing improvments would seem desirable before seriously considering abandonment of the concepts of Federal aid on which present law is based. It is, nonetheless, fitting that both majority and minority views consider the possibility of some changes in the Kerr-Mills Act.

This coincides with my view that additional legislation is needed. While persisting in the opinion that the proposal jointly sponsored by Senators Saltonstall, Aiken, Scott, Boggs, Prouty, Cotton, and myself during the last session of Congress contains the most desirable elements for such legislation, it should be recognized that Kerr-Mills Act amendments along such lines might be a satisfactory legislative avenue for their accomplishment.

This plan, based on sharing of cost by Federal and State Governments with the advantages of State administration, gives three choices to all persons over 65 whose annual income for Federal tax purposes is below specified levels. The choices would give beneficiaries an option to choose (1) a diagnostic, preventive, short-term illness plan, (2) a long-term illness plan, or (3) private health insurance. It is appropriate that the desirability of such an approach be reiterated as a part of this document.

The recurring suggestion in the majority report that social security financing is desirable impels me to comment.

Social security financing of medical care for the aged is grossly unfair. It would put the burden very heavily on wage earners regardless of their income or ability to pay. The $5,200-a-year clerk would pay as much social security tax as the $50,000 corporation president.

It would be especially hard on young people, struggling to feed, clothe, house, and educate their children and protect them currently with medical insurance, to be forced to shoulder at the same time the tax for hospital insurance for the aged. Through all their working years, America's working men and women would be compelled to pay a social security health insurance tax, yet receive none of the benefits for themselves until they reached age 65. Should they die before age 65, they would receive nothing for all their payments.

Social security taxation for aged health insurance is a very regressive tax, hurting most those in the lowest wage brackets. About fifty percent of America's workers earn wages of $5,000 a year or less.

Under the social security financed insurance plan of the administration, even those of the blind, the handicapped, the domestic workers, and the farmworkers who pay social security taxes would be taxed to pay for health care of the well to do.

Meantime, 40 percent of all taxable income in the United States on which no social security tax is levied would escape any responsibility whatsoever to help in this problem, including the income of 9 million American workers not in the social security system.

In October 1962, the Hawaii Medical Service Association informed me that the medical benefits proposed under the administration's social security plan could be offered in Hawaii for each senior citizen at an estimated $7.10 per month, or $85.20 per year.

Under the administration's proposed social security tax plan, an employee earning $5,200 annually, which is the maximum salary to be taxed, would pay $27.50 a year more than the tax he now pays under social security. If an employee age 20 would deposit this $27.50 in an insured savings and loan association each year for 45 years at 4-percent interest compounded quarterly (this rate is common in Hawaii and West Coast States), he would have a nest egg of $4,093.78 at age 65.

If he continued to invest the $4,093.78 at 44-percent interest compounded quarterly, he could pay for an excellent medical care insurance policy with the $197.94 in interest on his savings each year and get better coverage than the administration's plan would provide. Or, he could buy the benefits of the administration plan for $85.20 and still have $112.74 left over.

Most startling of all, after he died, his nest egg of $4,093.78 would go to his family. Should he die before age 65, say at age 60, his family would inherit his savings of $3,126.16. Under the administration plan he would build no nest egg. Actually, the administration would have consumed his goose.

As one who voted for the Kerr-Mills law in 1960 and who has cosponsored an excellent voluntary health insurance plan for those aged persons not eligible for Kerr-Mills or old-age assistance, I believe there are better ways than the social security plan of the administration to meet the remaining problem.

All of us want to make sure proper medical care is received by our elderly citizens, those who arrived on this earth before us and to whom we owe so much.

As they reach their sunset years, and as others reach them tomorrow, next year, and in the years to come, their security and dignity are on our conscience.

Now in the twilight of their years, some of our senior citizens are in need of assistance. We must see to it that they enjoy their remaining years in peace and dignity, not as wards of the Federal Government, but as free citizens, able to live their lives in gracious fulfillment. As the administration plan is woefully inadequate, Congress should continue to explore better ways to meet the need.

HIRAM L. FONG.