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is through a Federal bureaucracy, then the great mass of American doctors would be in favor of this type of program. American medicine is confident that the solution lies with local doctors who are by tradition and training dedicated to the healing of the sick whatever their financial status might be. Medical authorities are convinced that local hospitals locally controlled, are the ultimate solution, not federally controlled institutions
The American people are convinced of this also. There has been a strong and solid support, for instance, for States and municipalities which undertake the construction of their own hospitals and, thereafter maintain and control those hospitals themselves. I do not believe the American people will permit the transferral of control over the thousands of municipal, county, State and charitable hospitals from themselves to the Federal bureaucracy this bill would create.
Let me also point out here that there is an increasing use by the American people of health insurance programs which are privately or cooperatively financed and with which the medical profession and the Nation's hospitals have fully cooperated. There are indeed programs specifically designed for the aged and I am informed that they have met with a considerable degree of initial acceptance.
There are other solutions to the problem than through an increased Federal bureaucracy. Among them are private or cooperative insurance programs of which there are now many in the United States. I would respectfully submit to the committee that these other approaches be considered carefully before it undertakes a radical new step by imposing federally controlled and dominated programs such as this on the American people.
I wish to thank the committee for this opportunity to present my views on this problem.
The CHAIRMAN. Thank you, Mr. Weaver, for coming to us and giving us your views on this subject.
Mr. WEAVER. Thank you, Mr. Chairman.
The CHAIRMAN. We will now hear from our colleague, the Honorable Leonard Farbstein from the State of New York. We are happy to welcome you, Mr. Farbstein.
Mr. FARBSTEIN. Thank you, Mr. Chairman.
STATEMENT OF REPRESENTATIVE LEONARD FARBSTEIN, OF
Mr. FARBSTEIN. Mr. Chairman, may I first congratulate this committee for holding hearings on H.R. 4700 which is of the utmost importance to our older men and women.
The miraculous advances of this century in the medical sciences have resulted in longer and healthier lives for the people of this Nation. The number of persons 65 years and older today is 15 million and is expected to reach almost 25 million by 1980. At that time this age group will constitute between 9.0 and 10.6 percent of the population.
I join the rest of you here today who are concerned with the plight of our older men and women. What will these aged look forward to after years of hard work? Most of them will be forced to live on low and limited incomes. Many of them will suffer from any one of the
numerous long-lasting and expensive chronic diseases. These diseases continue each year to make up a larger total of the illnesses in this country. In addition, chronic illnesses are more likely to affect the elderly than any other age group. The dilemma of the older person is how to meet ever-spiraling
medical costs on fixed retirement incomes. It is my sincere conviction that the best solution to this problem is embodied in H.R. 4700, introduced by the Honorable Aime J. Forand. This practical and sensible measure proposes the inclusion of coverage for certain medical expenditures within the existing social security system. Beneficiaries of old age and survivors insurance would receive hospital, surgical and nursing home benefits.
In my opinion, this plan has two major advantages. In the first place there can be no hidden exclusions or cancellations in a publicly supported system. Secondly the cost for the program would be shared by nearly the entire working population at a time when they are well able to afford the low increase in payroll deductions necessary to finance the program.
This problem has received the careful study and attention of a number of groups. Even those who cry out against the approach of H.R. 4700 cannot ignore the serious plight of the aged in meeting their medical costs. Most recently the Secretary of the Department of Health, Education, and Welfare submitted a very thorough report to this committee on this subject. I concur with Representative Forand's judgment that the report pointed clearly to the urgent need for passage of H.R. 4700. *Among other very interesting facts, the report showed that in 1957 more than 80 percent of the hospitalized social security beneficiaries had medical bills of $1,000 or more.
I do not ask that we ignore the great advance in coverage of medical costs by nonprofit and commercial insurance companies. Nevertheless, I am astounded by a recent report in the New York Times which quoted the New York State Labor Department's monthly magazine as stating that an average of two out of every three dollars spent by Americans on health were not covered by insurance policies.
For the aged the problem is especially serious because the cost of insuring the elderly is much higher than for the rest of the population. It is, therefore, not surprising that a recent study of the National Opinion Research Center shows that only three out of eight persons 65 years of age or older had some form of voluntary health insurance coverage in 1957. Nor is it astonishing that of this number an even smaller percentage were fully covered for hospital costs. The same study reports that more than half of these persons favor Government insurance.
Within recent months there has been a flood of publicity on plans especially designed for persons 65 and over offered by commercial and Blue Shield companies. Let us not be misled by the outward claims of these plans. Their shortcomings are evident upon careful examination. The premiums are high--the benefits low. Often no more than half the average cost of hospital room and board is covered for a time shorter than usually needed. Exclusions for preexisting conditions and limitations on services covered further limit the usefulness of these plans to the aged.
The failure of voluntary health insurance to meet the needs of persons 65 years and older is clear. It is equally evident that the most effective way of meeting their demands is through a fair broad-based, well-run system. Our social-security system meets these criteria.
New York has been in the vanguard of attempts to improve health insurance coverage for her population. I am sure I speak for the people at home when I urge the passage of H.R. 4700 as another step in this direction.
Our increased national life-expectancy is a precious gift, but it also offers a pressing challenge. We have the opportunity to lessen one of the heaviest burdens of our older citizens—their staggering health bills.
H.R. 4700 is a worthy national solution to a national problem. The CHAIRMAN. Thank you, Mr. Farbstein, for coming to us and giving us your views on the subject.
Mr. FARBSTEIN. Thank you, Mr. Chairman.
The CHAIRMAN. We will now hear from our colleague, the Honorable Charles O. Porter from the State of Oregon. We are happy to welcome you, Mr. Porter.
Mr. PORTER. Thank you, Mr. Chairman.
STATEMENT OF REPRESENTATIVE CHARLES O. PORTER, OF
Mr. PORTER. Mr. Chairman, this is a historic move by a congressional committee. To my knowledge it is the first time that this proposed legislation has been given such concentrated study.
I will not go into the details of H.R. 4700 as proposed by my able colleague from Rhode Island. I have introduced identical legislation, as have many other Members of Congress, because I share the belief that it is time we faced the fact that a major quandary facing men and women over 65 is the problem of how to pay for adequate medical and surgical care on a limited income.
When we speak of the aged in the United States we are speaking of approximately 15,380,000 persons aged 65 and over. By 1975 we will be speaking of some 20 million people
our mothers, grandmothers, aunts, uncles, cousins, and for some of us, ourselves. It is possible that by 1975 the old saying "life begins at 40" will have been rewritten to "life begins at 65.” As medical science advances, so does the life expectancy of our population.
It is a fact that we are a Nation with an increasing aged population. Some pioneer steps are being taken. This week of hearings on Congressman Forand's bill is one such step.
I believe the amount and source of income of persons retiredvoluntarily or just because they are 65--is of concern to us. Of those 15,380,000 persons age 65 and older approximately 9,230,000 were receiving old-age, survivors and disability insurance as of December 1958. The average benefit under this insurance, social security as we know it, was $72 in March of this year. Widows, as a group, have the lowest income under this insurance. Their average benefit in March was $56.
There are many ways to look at the economic status of the retired. We know that in 1958 about 60 percent of those persons over 65 had less than $1,000 income per year. Another 20 percent had an income ranging between $1,000 and $2,000. The remaining 20 percent had
more than $2,000 annual income. There is a lot of truth in the song title "The Old Folks at Home.” They can't afford to go any place else.
Older citizens need adequate housing, adequate medical care, adequate employment, and our appreciation and respect for the time they have given toward making this Nation a better place.
It is relatively easy for us to grant an across-the-board increase in social security benefits, but it is hard for the man or woman receiving a $35 check to do very much with $2 or $3. Benefits have to be more equal.
The most important problem right now is establishing a program which will enable senior citizens to have the benefit of adequate medical and surgical care which they can afford but which will not put an unfair burden upon the doctors.
I know many physicians adjust the rate they charge the older citizen, in the realization that his ability to pay is not as great as yours or mine. This is only a part of the problem. The cost of voluntary health insurance is high. The cost of hospital care is high. The income of the older citizen is low.
There has to be a compromise. Is it in keeping with the American way of life to ask a person of 75 who receives $40 monthly under social security to pay $8 or $10 to a private company for a medical plan which lists more exceptions than coverage? "I think not. This is the major problem before this committee.
I thank the members of the committee for this opportunity to appear before it.
The CHAIRMAN. Thank you, Mr. Porter, for coming to us and giving us your views on this subject.
Mr. PORTER. Thank you, Mr. Chairman.
The CHAIRMAN. We will now hear from our colleague, Hon. Alfred E. Santangelo, from the State of New York. We are happy to welcome you, Mr. Santangelo.
Mr. SANTANGELO. Thank you, Mr. Chairman.
STATEMENT OF REPRESENTATIVE ALFRED E. SANTANGELO, OF
Mr. SANTANGELO. This 86th Congress now has the opportunityand responsibility—to continue the progress that has been made since the Social Security Act of 1935.
The opportunity confronts us in the form of H.R. 7154, which I have introduced, and which is identical to H.R. 4700, which this committee is now considering. Under this bill, persons eligible for old age and survivors insurance benefits would be assured of essential medical insurance coverage.
The results of innumerable studies and surveys support my conviction that one of the most pressing problems of the elderly is how they can meet the onslaught of expensive medical care which most of them inevitably face. It is indisputable that few of them have incomes or resources sufficient to cover long and costly illnesses and surgical care. An abundance of such evidence has already been presented to the committee. Sickness often constitutes a catastrophe for our older people and for their families.
Those who experienced illness, short or prolonged, know the aches and pains which came with the night and disappear with the dawn. Sickness and illness are companions of old age, especially for persons above the age of 65 of whom there are approximately 15 million in the United States. Ask any of these senior citizens as to their health and you invite a torrent of complaint as to subjective and objective pain and agony. Five hundred and twenty-four out of every 1,000 of these over 65 are receiving old age and survivors insurance. These would be assured of medical care under this bill. In my State of New York, 1.5 million are over 65 years
of and approximately 780,000 would receive the benefits of these provisions. From the number of requests I receive in my congressional office from elderly people who seek supplemental welfare or additional medical care, one would think that the greatest percentage of these people reside in my congressional district.
In addition to the great number of people suffering from illness due to old age, we know that the illnesses of later life are not only of longer duration but are also of a more serious nature. These facts were brought home to me by a conference held in my State of New York on financing health costs of the aged. In addressing the conference which he had convened, former Governor Harriman stated :
The costs of adequate medical care for older persons are higher than for younger persons. Hospitalization is needed more often and for longer periods of time. Prolonged care is more frequently required, because chronic disease is more common among the aged. A recent national study showed that the average annual cost of medical care for persons over 65 was $102 compared to $65 for the general population.
At the same time that extra care is needed, the older person has fewer financial resources to meet the added cost. As medical and hospital costs have risen sharply in the past quarter century, retirement incomes have not kept pace.
Those meetings brought to light much information which supports my proposal. For example, our New York State commissioner of health, Dr. Herman E. Hilleboe, pointed out that, according to a survey made by the National Opinion Research Center in 1955, approximately 62 percent of all age groups in New York State were in sured against the cost of hospitalization while only 35 percent of the population 65 years and over had such insurance. Obviously the ability and opportunity to pay for medical care or to purchase health insurance depends on age, income, and whether an individual has a job. Group insurance provided for people at work usually ends with retirement—the time, sadly enough, when most people need it the most.
The New York conference report took account of the difficulty that elderly people have in meeting hospital bills by pointing to figures developed by the American Hospital Association's commission on financing of hospital care. These statistics showed that 21 percent of those patients who could not pay their hospital bills were 65 years of age and over whereas persons in this
age group comprised less than 9 percent of the overall population. The conclusion was that many older persons-perhaps as many as 80 percent-would not be able to meet medical bills, even of a fairly modest amount, from income presently available to them.
Another significant 80-percent figure concerns the chronic disease problems which face older people. As I have already said, illnesses