"Nondisclosure of Information

"(e) Information concerning an individual, obtained from him or from any physician, dentist, nurse, hospital, nursing home, or other person pursuant to or as a result of the administration of this section, shall be held confidential (except for statistical purposes) and shall not be disclosed or be open to public inspection in any manner revealing the identity of the individual or other person from whom the information was obtained or to whom the information pertains, except as may be necessary for the proper administration of this section. Any person who shall violate any provision of this subsection shall be deemed guilty of a misdemeanor and, upon conviction thereof, shall be punished by a fine not exceeding $1,000 or by imprisonment not exceeding one year, or both.

"Medical and Hospital Services Under Workmen's Compensation

"(f) The provisions of subsection (a) shall not be applicable to any services which an individual required by reason of any injury, disease, or disability on account of which such services are being received or the cost thereof paid for, or upon application therefor would be received or paid for, under a workmen's compensation law or plan of the United States or of any State, unless equitable reimbursement to the Federal Old-Age and Survivors Insurance Fund for the payments hereunder with respect to such services have been made or assured pursuant to agreements or working arrangements negotiated between the Secretary and the appropriate public agency. Notwithstanding the above sentence, if (1) the individual's entitlement to receive such services (or to have the cost thereof paid for) under such a workmen's compensation law or plan is in doubt when such services are required, (2) the cost of such services is otherwise payable from the Federal Old-Age and Survivors Insurance Trust Fund pursuant to this section, and (3) the individual makes an appropriate application under such workmen's compensation law or plan and agrees, in the event that he is subsequently determined to be entitled to receive such services (or to have the cost thereof paid for) under such law, to reimburse the Federal Old-Age and Survivors Insurance Trust Fund in the amount of any loss it might suffer through its payment for such services, then the cost of such services may be paid from such Trust Fund in accordance with this section. In any case in which the cost of services is paid from the Federal Old-Age and Survivors Insurance Trust Fund pursuant to the immediately preceding sentence, or is paid from such Trust Fund with respect to any such injury, disease, or disability for which no reimbursement to such Trust Fund has been made or assured pursuant to the first sentence of this subsection, the United States shall, unless not permitted under the law of the applicable State (other than the District of Columbia) be subrogated to all rights of such individual, or of the provider of services to which payments under this section with respect to such services are made, to be paid or reimbursed pursuant to such workmen's compensation law or plan for such payments. All amounts recovered pursuant to this subsection shall be deposited in the Treasury of the United States to the credit of the Federal Old-Age and Survivors Insurance Trust Fund.

"Regulations and Functions of Advisory Council

"(g) All regulations specifically authorized by this section shall be prescribed by the Secretary. In administering this section, the Secretary shall consult with a National Advisory Health Council consisting of the Commissioner of Social Security, who shall serve as Chairman ex officio, and eight members appointed by the Secretary. Four of the eight appointed members shall be persons who are outstanding in fields pertaining to hospital and health activities, and the other four members shall be appointed to represent the consumers of hospital, nursing home, and surgical services, and shall be persons familiar with the need for such services by eligible groups. Each appointed member shall hold office for a term of four years, except that any member appointed to fill a vacancy occurring prior to the expiration of the term for which his predecessor was appointed shall be appointed for the remainder of such term, and the terms of office of the members first taking office shall expire, as described by the Secretary at the time of appointment, two at the end of the first year, two at the end of the second year, two at the end of the third year, and two at the end of the fourth year after the date of appointment. An appointed member shall not be eligible to serve continuously for more than two terms but shall be

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eligible for reappointment if he has not served immediately preceding his reappointment. The Council is authorized to appoint such special advisory and technical committees as may be useful in carrying out its functions. Appointed Council members and members of advisory or technical committees, while serving on business of the Council, shall receive compensation at rates fixed by the Secretary, but not exceeding $50 per day, and shall also be entitled to receive an allowance for actual and necessary travel and subsistence expenses while so serving away from their places of residence. The Council shall meet as frequently as the Secretary deems necessary, but not less than once each year. Upon request by three or more members it shall be the duty of the Secretary to call a meeting of the Council.

"Utilization of Private Nonprofit Organizations

"(h) (1) The Secretary may utilize to the extent provided herein, the services of private nonprofit organizations exempt from Federal income taxation under section 501 of the Internal Revenue Code of 1954 which (A) represent qualified providers of hospital, nursing home, or surgical services, or (B) operate voluntary insurance plans under which agreements, similar to those provided for under subsection (d), are made with hospitals, nursing homes, and physicians for defraying the cost of services. Such organizations shall be utilized by the Secretary to the extent that he can make satisfactory agreements with them and to the extent he determines that such utilization will contribute to the effective and economical administration of this section. Such agreements shall not delegate (A) his functions relating to determinations as to whether the costs of hospital, nursing home, and surgical services furnished an individual may be paid for out of the Federal Old-Age and Survivors Insurance Trust Fund under this section and the amount of such payment, and (B) his functions relating to the making of regulations.

"(2) An agreement under paragraph (1) shall provide for payment from the Federal Old-Age and Survivors Insurance Trust Fund to the organization of the amounts paid out by such organization to hospitals, nursing homes, physicians, and dentists, under this section and of the cost of administration determined by the Secretary to be necessary and proper for carrying out such organization's functions under its agreement pursuant to this subsection. Such payments to any organization shall be made either in advance on the basis of estimates by the Secretary or as reimbursment, as may be agreed upon by the organization and the Secretary, and adjustments may be made in subsequent payments on account of overpayments or underpayments previously made to the organization under this subsection. Such payments shall be made by the Managing Trustee of the Trust Fund on certification by the Secretary and at such time or times as the Secretary may specify and shall be made prior to audit or settlement by the General Accounting Office.

"(3) An agreement under paragraph (1) with any organization may require any of its officers or employees certifying payments or disbursing funds pursuant to the agreement, or otherwise, participating in its preformance, to give surety bond to the United States in such amount as the Secretary may deem necessary, and may provide for the payment of the cost of such bond from the Federal Old-Age and Survivors Insurance Trust Fund.

"Certifying and Disbursing Officers

"(i) (1) No individual designated by the Secretary pursuant to an agreement under this section, as a certifying officer shall, in the absence of gross negligence or intent to defraud the United States, be liable with respect to any payments certified by him under this section.

"(2) No disbursing officer shall, in the absence of gross negligence or intent to defraud the United States, be liable with respect to any payment by him under this section if it was based upon a voucher signed by a certifying officer designated as provided in paragraph (1).

"Adjustments in Cash Benefits

"(j) For purposes of section 204, any payment under this section to any hospital, nursing home, physician, or dentist, with respect to hospital, nursing home, or surgical services furnished an individual shall be regarded as a payment to such individual."

(b) The amendments made by subsection (a) shall be effective on the first day of the twelfth calendar month after the month in which this Act is enacted. (c) Notwithstanding the provisions of section 226 (a) (2) of the Social Security Act, as amended by this Act, and subsection (b) of this section, applications filed under such section 226 which would otherwise be valid shall, subject to regulations of the Secretary, be considered valid even though filed more than three months prior to the effective date of this Act, but not if filed prior to the first day of the fourth calendar month after the month in which this Act is enacted.

SEC. 2. (a) Section 1401 of the Internal Revenue Code of 1954 (relating to rate of tax on self-employment income) is amended to read as follows:

"SEC. 1401. RATE OF TAX.

"In addition to other taxes, there shall be imposed for each taxable year, on the self-employment income of every individual, a tax as follows:

"(1) in the case of any taxable year beginning after December 31, 1959, and before January 1, 1963, the tax shall be equal to 4% percent of the amount of the self-employment income for such taxable year;

"(2) in the case of any taxable year beginning after December 31, 1962, and before January 1, 1966, the tax shall be equal to 5% percent of the amount of the self-employment income for such taxable year;

"(3) in the case of any taxable year beginning after December 31, 1965, and before January 1, 1969, the tax shall be equal to 6% percent of the amount of the self-employment income tax for such taxable year; and

"(4) in the case of any taxable year beginning after December 31, 1968, the tax shall be equal to 7% percent of the amount of the self-employment income for such taxable year."

(b) Section 3101 of such Code (relating to rate of tax on employees under the Federal Insurance Contributions Act) is amended to read as follows:

"SEC. 3101. RATE OF TAX.

"In addition to other taxes, there is hereby imposed on the income of every individual a tax equal to the following percentages of the wages (as defined in section 3121 (a)) received by him with respect to employment (as defined in section 3121 (b))—

"(1) with respect to wages received during the calendar years 1960 to 1962, both inclusive, the rate shall be 34 percent; "(2) with respect to wages received 1965, both inclusive, the rate shall be 34

during the calendar years 1963 to percent;

"(3) with respect to wages received during the calendar years 1966 to 1968, both inclusive, the rate shall be 44 percent; and

"(4) with respect to wages received after December 31, 1968, the rate shall be 44 percent."

(c) Section 3111 of such Code (relating to rate of tax on employers under the Federal Insurance Contributions Act) is amended to read as follows: "SEC. 3111. RATE OF TAX.

"In addition to other taxes, there is hereby imposed on every employer an excise tax, with respect to having individuals in his employ, equal to the following percentages of the wages (as defined in section 3121(a)) paid by him with respect to employment (as defined in section 3121 (b))—

“(1) with respect to wages paid during the calendar years 1960 to 1962, both inclusive, the rate shall be 34 percent;

"(2) with respect to wages paid during the calendar years 1963 to 1965, both inclusive, the rate shall be 34 percent;

"(3) with respect to wages paid during the calendar years 1966 to 1968, both inclusive, the rate shall be 44 percent; and

"(4) with respect to wages paid after December 31, 1968, the rate shall be 44 percent."

(d) The amendment made by subsection (a) shall apply with respect to taxable years beginning after December 31, 1959. The amendments made by subsections (b) and (c) shall apply with respect to remuneration paid after December 31, 1959.

Senator MORSE. My bill would insure the cost of hospitalization up to 60 days in a 12-month period and nursing home care up to 120 days minus the number of days of hospitalization, and the normal surgical

cost incurred during that period of hospitalization certified to have been necessary by the attending physician.

As in the case of the Forand measure, my bill raises the social security tax for both workers and employers the one-fourth of 1 percent necessary to pay for the program.

But it is not the details of program I wish to dwell upon at this hearing. If the need and desirability of adding medical insurance to social security is substantiated in these hearings, then I know the committee will work out the provisions necessary to carry out the objective.

NEED FOR BILL

What I want to stress to you is the economic need for our proposal, and the social responsibility which we bear toward the elderly of our population.

The Congress has been working this year on the appropriation bill for the Department of Health, Education, and Welfare in which the Senate, at least, has called for new record highs of money for research into the causes and cures for our most feared and deadly diseases.

Of course, I am hopeful that the final bill will provide amounts as close to the Senate figures as possible. Heart disease, cancer, and mental illness account for the great bulk of illness and death among the American people. In some of these areas, researchers feel we are close to solutions.

But in other areas we already have solutions. The longevity of each American is greater than ever and continues to increase. Techniques in surgery have advanced to the point where recovery and long life are assured to millions who did not have a chance for survival 20 or 30 years ago. Medical miracles can already be achieved with drugs, and every day new advances and discoveries are made.

But to have the know-how in medicine is of no value to the man or woman or child who cannot pay for it. For the millions of Americans who cannot afford the luxury-and it is a luxury-of a serious operation or long stay in the hospital, these medical miracles might as well have never been discovered.

The Nation is grateful for the discovery of the Salk vaccine, but the continuing incidence of poliomyelitis among low-income groups who cannot afford polio shots speaks for my contention that our knowledge in medicine is meaningful only so far as it can be made available to those in need.

There is no group in greater need of assistance in meeting medical costs than those over 65. I know you have already received evidence of the fact that only about three out of eight of the persons 65 and over have medical insurance of any kind.

Yes, I know the insurance companies take the position that coverage in this group is increasing under voluntary programs. They also fail to point out that the medical policies do not usually cover the total cost.

I also know that the medical profession is belatedly making an effort to bring surgical fees more into line with the ability of elderly patients to pay for it.

Yet these moves are totally inadequate. They have been made in response to the Forand bill, and to the measures similar to it, which have been put forward in Congress.

I contend that while they are salutary, they are no substitute for full and adequate medical care as provided in H.R. 4700 and S. 881. These belated moves are admissions that the area of medical care for the elderly is one grossly in need of corrective action.

First, medical costs have risen faster than the general price level. The cost of living as a whole has risen 23 percent since the benchmark of 1947-49, but medical costs have gone up 44 percent since that time.

Secondly, illness at age 65 or over costs more than it does for a younger person.

My study of last year of medical costs showed that the annual cost for private personal health care is $65 for the average person, but for those 65 and over, it is $102 a year.

Degenerative and chronic diseases are costly, and they strike the people least able to afford them.

Third, the income of the 65-and-over age group is the lowest of all age groups in America. In 1958, 59.3 percent of all couples over 65 had incomes under $2,500 and 32 percent of them were trying to live on less than $2,000. That is income from all sources.

The median income, meaning that half receive less and half receive more, for men over 65 is about $1,421 per year, and in the great majority of cases that sum must support two people.

In the case of women, over 65, their median income is only $741 per year. This is, I emphasize, income from all sources, not just social security.

Out of this meager amount, out of the lowest incomes, this age group faces the highest medical costs.

Yet they also have the least in medical insurance, both in terms of coverage and in terms of premiums and benefits.

Under this proposal, health insurance would be paid up while the worker is employed, and become effective when his income drops and he needs protection the most.

Such insurance would also help relieve the burden of caring for indigent patients which is expected to be borne by hospitals, but which, in fact, is largely borne by paying patients.

In connection with my work on the Senate Committee of the District of Columbia, I have been studying the cost of medical care here in the District. One of the factors we are finding as a contributor to the skyrocketing of hospitalization is the care of indigents, many of them elderly and no longer employable.

Governments, of course, make considerable payments to hospitals for care of indigents, but they do not pay for the entire cost.

Thus, it goes into the operating cost of the hospital, and eventually into the bill of the paying patient.

More often, we find the elderly simply foregoing medical treatment. I am sure you know from the people you represent, and from your personal experience, of many aged men and women who dread the possibility of a long illness which may put a drain upon the finances of their children, or force them to accept charity.

There is no excuse for that situation. The blessing of medical science must be available to all in need of it, not just to those who can afford to pay for it. The kind of insurance program we are advocating is no charity proposition, either. It is not a case of asking the Government