3. THE DIRECT LOAN PROGRAM

Section 105 amends section 202 of the Housing Act of 1959 by placing a ceiling of 3 percent on the interest rate on direct loans to nonprofit sponsors of housing for the elderly. In addition, the amount authorized for this program was increased from $350 million to $500 million.

The first supplemental appropriation bill for 1966 appropriated $50 million to increase the fund from which these loans are made.

4. HOME REHABILITATION GRANTS

Section 106 amends the Housing Act of 1949 to authorize the use of urban renewal capital grant funds for grants to owner-occupants of homes in urban renewal areas to enable them to make repairs required by codes or urban renewal standards. Grants up to a maximum of $1,500 are available to homeowners whose incomes do not exceed $3,000 per year. For homeowners whose incomes are more than $3,000 per year, grants can be made to meet rehabilitation costs in excess of an amount which could be amortized with a maximum of 25 percent of their monthly incomes being devoted to housing expenses. However, in no case may a grant exceed $1,500.

5. NEIGHBORHOOD FACILITIES

Section 703 establishes a program of grants to local public bodies and agencies to finance projects for neighborhood facilities. Projects may be undertaken directly by local public agencies or through nonprofit organizations approved by such local public agencies. Among the types of facilities which would be eligible are neighborhood center facilities serving low-income elderly persons. Grants would be for two-thirds of the development cost except in areas designated under the Area Redevelopment Act which may receive grants up to three-fourths of the development cost.

The first supplemental appropriation bill for 19661appropriated $12 million to implement this program.

1 Public Law 89-309 (Oct. 31, 1965).

VI. FRAUDS AND MISREPRESENTATIONS AFFECTING THE

ELDERLY

A. REPORT OF SUBCOMMITTEE

Early in 1965 the Subcommittee on Frauds and Misrepresentations Affecting the Elderly, Senate Special Committee on Aging, issued a report which made recommendations for action in five major areas: health frauds and quackery, interstate mail-order land sales, deceptive or misleading methods in health insurance sales, preneed burial services, and more effective action by Federal regulatory agencies. These recommendations are based on two major findings:

1. Elderly buyers in this Nation, however small individual incomes may be, now have a purchasing power estimated to be between $38 and $40 billion.

2. There is good reason to believe that the elderly have become a major target of those who are looking for new markets to victimize. The elderly, attempting to make every dollar go as far as possible, often are tempted to believe unscrupulous promoters who prey upon their fears, unique needs, and their desire for security in retirement years.

In the months since the report was issued, several of its recommendations have been incorporated in legislative proposals.2

B. FEDERAL TRADE COMMISSION ACTIONS

1. On April 8, 1965, Federal Trade Commission Chairman Paul Rand Dixon announced that the Commission intended to establish an Office of Federal-State Cooperation in order to provide more comprehensive and effective action against deceptive practices.

2. On October 14, 1965, the FTC established a Federal-State Relations Division as one means of effecting a workable division of responsi bility between Federal and State resources.

3. The Federal Trade Commission during 1965 authorized publication of a new booklet describing ways in which older buyers are often cheated, and it is now under preparation.

4. The Commission on July 19 opened a Special Consumer Complaints Office in Washington, D.C. Commission attorneys will be on duty in this office from 9 a.m. to 4 p.m. to receive complaints by telephone or in person. The Commission has announced that the new Office is primarily concerned about deceptive trade practices that victimize the poor, and special emphasis is given to practices that prey upon the aged.

1 "Frauds and Deceptions Affecting the Elderly, Investigations, Findings and Recommendations; A report of the Subcommittee on Frauds and Misrepresentations Affecting the Elderly," Jan. 31, 1965. 2 Senator Harrison A. Williams, subcommittee chairman, has introduced the following bills: S. 2350. calling for premarket testing of therapeutic, diagnostic, and prosthetic devices; S. 2672, to require Federal regulation of interstate land sales; and S. 1364, to amend the Postal Administrative Mail Fraud Statute. In addition, talks are underway for an interdepartmental study on attitudes that contribute to the growth of quackery, and Federal representatives are conferring about a proposal for a community education program against health frauds and quackery.

55-475-65- 3

C. FOOD AND DRUG ADMINISTRATION

During 1965 the Food and Drug Administration received the full text of a comprehensive survey-prepared by the Public Administration Service of Chicago-of the relationships between State and Federal laws in broad areas of mutual interest, including regulation of foods, drugs, and therapeutic devices.

The principal finding of the report was that "the interdependency and community of purpose among Federal, State, and local agencies must be expanded and further coordinated through a balanced State-Federal relationship."

D. CONSUMER PROTECTION

President Johnson, in his message to his Consumer Advisory Council on October 15, asked the Council to give special attention to the elderly who, he said, deserve adequate solutions for their particular problems.

VII. NURSING HOMES AND OTHER LONG-TERM-CARE

FACILITIES

A. SOCIAL SECURITY AMENDMENTS OF 1965

Provisions in Public Law 89-97 of particular applicability to nursing homes and other long-term-care facilities:

1. As one of the benefits provided by the new hospital insurance program for the elderly, posthospital extended care is provided for up to 20 days with costs fully paid and up to 80 additional days for which the patient pays $5 per day.

2. There is a provision that payment to nursing homes and other institutions providing extended care services shall be on the basis of reasonable costs of such services. This represents the first time that the principle of reimbursement of actual cost has been applied to nursing home care through a Federal program.

3. The new law repeats and reaffirms the previously existing statutory requirement that there be a State authority or authorities responsible for establishing and maintaining standards for private or public institutions in which OAA and MAA recipients receive longterm care, as a condition for eligibility for Federal matching funds. 4. The Federal Government was authorized to match vendor payments made in behalf of recipients of old-age assistance without limit on the amount to be matched. Previously the Federal Government would match up to $15 monthly, while no maximum was applicable to those older persons covered under Kerr-Mills MAA.

5. States were prohibited from providing less in health benefits, including long-term-care benefits, for those on old-age assistance than they provide those on Kerr-Mills MAA.

6. Among the medical benefits which States were required on and after July 1, 1967, to include in their vendor payment programs was skilled nursing home care.

(Amendments summarized in 4, 5, and 6 above are significant in that they make more Federal funds available to States for payment for nursing home care of public assistance recipients and specifically provide for skilled nursing home care.

The Bureau of Family Services of the Welfare Administration on August 20, 1965, issued to State agencies new guidelines for skilled nursing home care provided under the new legislation.

The new guidelines tighten requirements for availability of medical personnel, for adequate nonmedical personnel to meet patient needs, and for arrangements with hospitals for diagnostic services and for prompt transfer of acutely ill patients.)

7. The Senate Finance Committee adopted an amendment to H.R. 6675 (the bill which later became Public Law 89-97), requiring nursing homes and similar institutions to meet fire protection and safety standards acceptable to the Secretary of Health, Education, and Welfare as a condition to eligibility for Federal matching fund payments in behalf of public assistance recipients in such homes.

The bill as it passed the Senate included this provision, but it was deleted in conference.

B. APPROPRIATION FOR CONSTRUCTION OF LONG-TERM CARE FACILITIES

Included in the President's budget for fiscal 1966 was $70 million for construction of long-term care facilities with Federal matching funds under the Hill-Harris program, which superseded the HillBurton program.

This amount, which represented the full amount authorized for this purpose by the Hill-Harris Act, was included in H.R. 7765, the 1966 appropriation for the Departments of Labor and Health, Education, and Welfare and related agencies, which became Public Law 89-156 on August 31.

C. LONG-TERM CARE HEARINGS

During 1965 the Subcommittee on Long-Term Care of the Senate Special Committee on Aging continued its studies and hearings begun in 1964, with hearings in

A subcommittee report is in preparation, and it is expected that specific legislative recommendations will be made.