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CHAPTER I

AVAILABILITY OF KERR-MILLS MEDICAL ASSISTANCE FOR THE AGED

Previous reports have called attention to several areas of misunderstanding concerning the Kerr-Mills program of medical assistance for the aged which have obscured and inhibited objective evaluation of the program. These confusions persist. Among these are the number of States which have actually established plans; the number of older persons who receive some help; and where responsibility lies for promotion of the program. These important questions are considered here.1

1. NUMBER OF STATES IMPLEMENTING KERR-MILLS

Much of the misunderstanding as to the number of States which have implemented the Kerr-Mills legislation arises from failure to distinguish between the two facets of Kerr-Mills: (1) The new FederalState program of medical assistance for the aged (MAA) and (2) increased Federal support of medical care for recipients of old-age assistance (OAA) under the basic vendor payment provisions enacted by the Congress in 1950.2

We are, in this report, concerned only with the Kerr-Mills MAA program. The other phase of Kerr-Mills represents only one of a series of congressional acts liberalizing Federal sharing in relief programs. It does not represent a new departure and did not purport to be part of a new program to resolve a basic problem in financing the health care of the aged.

The primary purpose and new feature of Kerr-Mills was the provision by the Federal Government of an opportunity for the States to secure substantial Federal grants applicable toward meeting the medical expenses of older citizens who had previously been ineligible for such assistance the medically indigent aged. The extent to which this purpose has been achieved is the principal measure of the accomplishments of the Kerr-Mills legislation.

A salutary effect, apparently resulting from the earlier efforts of the special committee to clarify the matter, has been a noticeable slackening in attempts to combine in a single total those States making some improvements in their OAA plans with those States establishing new MAA plans. Statements such as "Kerr-Mills is now being put into

1 We wish to acknowledge the cooperation of the Bureau of Family Services in the Welfare Administration of the Department of Health, Education, and Welfare in the assembly of data for this report. Within the Bureau we want to recognize particularly the contributions of Mr. Garnett Lester, who supervised the development and preparation of much of the statistical data and tables, and Mrs. Catherine Miller, who was responsible for the drafting of State program descriptions and certain of the tables.

Three methods are employed to pay medical care costs of recipients of public assistance: (1) The "vendor payment" method consists of direct payments to hospitals, doctors, and other suppliers of medical care; (2) the "money payment" method is a system whereby a monthly cash grant is made to a recipient for his basic living expenses including a specific amount allocable for his medical requirements; (3) the third method consists of a combination of the first two. The Kerr-Mills legislation applies only to expenditures made under the "vendor payment" method.

It might be appropriate to note that in order to secure any payments for medical care under an OAA program, the older person must go onto the relief rolls. He must satisfy, where applicable, residence requirements, be subject to current liens on his property, and possibly have his name on a list, to which the public has access, of people on relief. All of these provisions are expressly prohibited from use in KerrMills MAA.

operation in 46 States," appear much less frequently than was formerly the case.

Nonetheless, these misleading claims still crop up. For example, a Member of the House of Representatives, in a speech on the floor of the House said recently:

It is interesting to me to note that as a result of actions this year by State legislatures, nearly 95 percent of persons over 65 live in States in which the KerrMills program is in operation. This to me certainly gives us reason to question the need for any new program which in itself is limited as to the persons who would be covered.

As will be shown in this report, that "95 percent" certainly do not live in States with Kerr-Mills MAA programs. And within those States which have MAA programs in operation, limitations as to persons eligible and benefits provided are all too real facts of life, which seemingly should serve to temper statements such as that quoted above.

Other sources of confusion in the determination of the precise number of States which have MAA plans in operation may result from:

(1) Counting as States, Guam, the Virgin Islands, Puerto Rico, and the District of Columbia, all of which have functioning MAA plans.

(2) Inclusion among the States with MAA programs, of States such as Georgia, New Mexico, and Nevada, which have enabling legislation, but where no funds were available for payments.

The fact is, that as of August 31, 1963, MAA programs were approved and known to be in operation in exactly 28 States, Guam, the Virgin Islands, Puerto Rico, and the District of Columbia. Table I notes the status of implementation of MAA among the various States as of August 31, 1963.

TABLE I.—Activities of the 54 jurisdictions to put into effect the program of medical assistance for the aged, August 31, 1963

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B. Plan submitted; not in effect (1): South Dakota.?

C. Plan being drafted (1): Iowa (effective July 4, 1963).
D. Legislation enacted; plan not yet submitted (6):

Kansas (effective Jan. 1, 1964)
Minnesota (effective July 1, 1964)
Nebraska (effective Oct. 1, 1963)
North Carolina

Virginia (effective, Jan. 1, 1964)
Wisconsin (effective, July 1, 1964)

1 Plans of these States are approved by HEW.

To become effective upon approval of State's plan by HEW.

Pennsylvania
Puerto Rico
South Carolina
Tennessee
Utah
Vermont
Virgin Islands
Washington
West Virginia
Wyoming

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F. Have authority for MAA; implementation indefinite (2):

Georgia: Enacted 1961; no funds available.

New Mexico: Has legal authority; 1963 appropriation request denied.

Considered by 1963 legislature; not enacted.

Vetoed by Governor.

Enacted 1963, but contingent upon voter approval of sales tax increase to finance program-rejected by voters in June 1963 referendum.

Passed resolution for constitutional amendment, which, if ratified by popular vote, may be followed by enabling legislation.

Source: Bureau of Family Services, Welfare Administration, Department of Health, Education, and Welfare.

Two additional States are expected to have MAA plans in operation by the end of 1963. With these new States-Iowa and Nebraska30 of the 50 States will have implemented Kerr-Mills.

As table I reveals, prospects are that by the end of 1964, some five or six other States may have operative MAA plans. It is anticipated, therefore, that more than 4 years after enactment of Kerr-Mills, some 10 to 15 States will not have implemented the program.

Nonimplementation, of course, means that almost none of the older citizens in the States concerned receive any help. Implementation, by itself, on the other hand, cannot possibly be used to conclude that those who need help are, in fact, being helped. In those States which have plans, eligibility requirements and the types and extent of services provided, combine to sharply limit the number of those aided. (Eligibility requirements and benefits are considered in chs. III and IV.) The section which follows provides concrete evidence of the relatively few of our almost 18 million older Americans who receive any help from MAA.

2. NUMBER OF RECIPIENTS

The Bureau of Family Services of the Welfare Administration issues monthly reports which show the total number of MAA recipients for the latest month for which data are available. In August 1962 the Bureau reported a total of 108,939 recipients of medical assistance for the aged in the 26 jurisdictions reporting payments for that month. For the month of August 1963, 31 jurisdictions reported payments made in behalf of 148,467 older persons.

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TABLE II.-Number of recipients in jurisdictions making MAA payments, August 1963

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The year-to-year increase in the number of recipients does not signify any particularly marked progress in the relative ability of MAA to reach older persons who need help. The number helped should be considered in relation to several factors:

A. Only 8 out of every 1,000 older Americans received any sort of help from the Kerr-Mills MAA program in August 1963. It was the hope of the Congress that all States would, ultimately, fully implement MAA. Such complete institution of MAA programs could, it was believed, provide potential protection to as many as 10 million aged persons.

The 1960 estimate of 10 million people who might need help was based upon a population of 16 million persons age 65 and over and would have to be increased today, as the aged population has enlarged to almost 18 million. While not every one of the medically indigent requires medical services each year, a very substantial proportion do. As many as one of every six aged persons requires hospitalization each year and an even greater proportion require the services of physicians and need prescribed drugs.

B. There is a very heavy carryover of MAA recipients from month to month. Thus, the annual total of different individuals receiving MAA help cannot be obtained by adding or projecting monthly totals of MAA recipients. The fallacy involved in use of the latter method, in attempts to demonstrate vast numbers of people helped, is strikingly illustrated by preliminary data on MAA recipients now available for

fiscal 1962. Multiplication of the average monthly number of MAA recipients would indicate a total of 892,728 older persons aided during that year. However, as table III reveals, only 217,797 different people received any help during those 12 months.

TABLE III.-Number of different recipients who received MAA care, by jurisdiction, fiscal year 1962 1

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1 Data not yet available for Guam, Illinois, Kentucky, Oregon, and Virgin Islands.

C. As tables II and III show, the overwhelming majority of MAA recipients are concentrated in a few States. On whatever analytical basis employed-monthly or annual-the States of New York, California, and Massachusetts account for over one-half of all persons receiving MAA help. Those three States, alone, accounted for 52 percent of all MAA recipients in August, while their older populations represented only 38 percent of all persons aged 65 and over residing in States with MAA plans in operation and only 22 percent of all elderly citizens in the Nation.

Several facts combine to explain the predominant position of these three States in the Kerr-Mills program. They rank among the wealthiest States in the Nation, and are able, therefore, to generate the funds necessary to finance plans with eligibility requirements and benefits that are comparatively more liberal than those in most of the other States with MAA plans. Additionally, these are States which had relatively broad programs of medical aid for the indigent elderly in operation prior to enactment of Kerr-Mills. Implementation of MAA represented a much smaller step for these States than it did for most of the others. Finally, and significantly, they transferred in large part, responsibility for certain types of medical care-particularly long-term hospital and skilled nursing home care-from their old-age assistance (relief) programs to MAA. Along with the transfer of functions went many tens of thousands of older citizens who had previously been receiving the transferred benefits under the old-age assistance programs. And, additional tens of thousands who would have been eligible for OAA help in the absence of MAA, now go directly into the Kerr-Mills plans.

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