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of the elderly are likely to be more severe and of longer duration. This is documented by the studies conducted by the staff of the commission on chronic illness which show that the age group 65 and over had 80 percent more chronic cases than did the age group 35 to 64.
From these and other related studies it is clear that the health needs of older people are exceedingly complex. The situation is made more difficult because the kind of magnificent care which is becoming available through the skill of medical science is very costly. I agree with Commissioner Hilleboe that these people have every reason to demand a bill of health rights for the aging. Enhancement of the physical and mental capacities of our older people can bring numerous re wards to society by enabling these people to contribute their share to the community good. It also will enable these aging individuals to preserve the dignity and serenity that should be their rightful heritage.
The idea of adding hospital and surgical benefits to the social security system is not a new one. But up to the present, it has received little legislative consideration. This proposal is a classic example of the concept of a government's responsibility described by Abraham Lincoln. "Mr. Lincoln said that the legitimate function of governmentis to do for the people what needs to be done, but which they by individual effort cannot do at all, or do so well.
The problem is a growing one. Figures from the Census Bureau indicate that in 1960 persons aged 65 years and over will constitute a new high of 8.8 percent of our country's total population. Most of these people will be living on fixed retirement incomes, which often are barely adequate to cover daily needs. At the same time they will be asked to meet medical costs which are soaring far beyond their means, at a rate even higher than other items in the cost of living index.' The result can only be a denial of adequate medical care to a portion of the population that needs it most, or financial calamity for those who do seek it.
I believe, however, that passage of this pending social security legislation will solve the grotesque dilemma facing our older people, in a thoroughly reasonable and equitable way. The estimated annual costs of $1 billion would be paid for through a slight increase in social security taxes of 38 percent of payroll for employees and employers, and %6 percent for the self-employed on all earnings up to $1,800 a year. In this way each person under the social security system would contribute to the cost of the program in a way and at a time that he could afford.
It has been argued that the number of older people who have medical coverage under private insurance plans is growing at such a rapid rate that Government-sponsored legislation in this field is unnecessary. I do not believe that this argument is a valid one. In the first place, only two out of five now have this coverage, and much of that is inadequate and uncertain. Secondly, it seems clear that the point will soon be reached where all those who can afford coverage will have it, and the others will be left without protection of any kind. Thirdly, private plans, which have only limited membership, can never be in a position to offer insurance at a rate which a more comprehensive, federally sponsored system can support. The costs will inevitably be higher.
I think it must be recognized, too, that the program of coverage provided under H.R. 7154 has very specific and immediate advantages over most private systems. There would be no problem of denial of benefits because of preexisting conditions. Benefit coverage could not be arbitrarily withdrawn, but would be automatic and continuous. The size of hospital and surgical benefits would be generally far more adequate than those presently available under private insurance. Benefits to cover nursing home costs would also be provided.
This legislation to help our older people is clearly within the responsibility of the National Government and of this Congress. It is a responsibility which, in view of the desperate need, we dare not abdicate. Delay can only mean unnecessary anguish for thousands of people. Through the social security system now in existence we already have the administrative machinery and resources to put the program into almost immediate operation. By taking advantage of this opportunity, we would be rendering our older citizens, and the country, an invaluable service.
It seems to me that we are needlessly hesitant about passing this legislation, failing to recognize that we have, after all, already admitted our responsibility in related areas of need. There is a long history of legislation relating to the elderly. Congress has also taken vitally important steps to help assure the people of this country that they will have necessary medical facilities available. I point to the Hospital Construction Act as a primary example of this.
Aside from the many questions and issued involved in the consideration of this bill, all of which will undoubtedy be discussed before the committee, I believe there is one basic consideration which must be kept in the forefront. There is needless suffering, not just in my district, or my State, but throughout the country. We cannot completely eliminate this suffering, but we can alleviate it.
The strength, health, and vitality of our people is a resource we must protect. In view of this, favorable action on this legislation is essential. Our senior citizens are entitled to a bill of rights to provide for
This bill is a bill of rights for our senior citizens. The CHAIRMAN. Thank you, Mr. Santangelo, for coming to us and giving us your views on this subject.
Mr. SANTANGELO. Thank you, Mr. Chairman. The CHAIRMAN. We will now hear from our colleague, Hon. Gerald T. Flynn from the State of Wisconsin. We are happy to welcome you, Mr. Flynn.
Mr. Flynn. Thank you, Mr. Chairman.
their old age.
STATEMENT OF REPRESENTATIVE GERALD T. FLYNN, OF
Mr. FLYNN. Mr. Chairman and members of the committee, I appear today on behalf of bill H.R. 4700 known as the Forand bill. 'I have filed an identical bill and it is my understanding that this hearing includes all identical bills that have been filed. I am supporting this bill and appear to give this testimony because of a strong demand for this legislation arising in my congressional district. I can truthfully say that in the campaign of last year there was no subject that was discussed more, and there was no matter about
which I was asked more questions, and there was no matter in which there appeared to be more general interest, than in the question of amendments to and improvements on the Social Security Act. Most of the interest centers around lowering the age for men from 65 to 62, and providing health insurance for both men and women when they reach retirement age. This is a universal demand shared in by people in all walks of life; they seem to feel that when reaching retirement age many of them are either sick of body or weak of limb and that the social security check which they receive monthly and which is intended to pay their grocery bills and other living expenses, is of necessity drained off for medical and hospital care, so that they are left with no money on which to live, or as an alternative they find it necessary to become recipients of public aid. This means that for them there is no such thing as retirement and the social security retirement becomes a mess. These conditions apply to a large percentage of the cases and there is deep concern among those who are either reaching retirement age and those who are already there over the possibility of retirement being denied them because of illness. There is also deep concern on this point by dependents, that is children, who have their own families and obligations, but find it necessary to pay the medical bills for parents. They naturally do their best but sometimes an impossible situation is caused and the result again is public relief.
There is, as you know, a great difference between receiving a retirement pension under social security and in receiving welfare from the community. The dignity of the individual is involved and especially so with our senior citizens for it is important that we help them maintain their self-respect and prevent them from becoming objects of charity either to their children or to their own community.
This possibility can be insured against by the individual's paying slightly more during his productive years so that when he reaches retirement age there will be enough in the social security fund to pay his doctor and hospital bills. This is an insurance plan; it is the American way of doing things. There is no difference between this plan and a Blue Cross or Blue Shield plan except that the premium is collected weekly and is held by the Government; it is deducted from wages rather than paid to a private company. The net result is the same and I believe that the addition of this provision to the Social Security Act comes under the general welfare clause of the Constitution, and under this clause it is the duty and burden of Congress to do that which is for the general welfare of the citizens. Certainly, no one can be heard to say that it is not for the general welfare of our senior citizens that they be permitted to insure themselves against the possibility of undue sickness in their old age or the possibility of being denied adequate income in retirement because of the necessity of using the retirement funds for the payment of doctor and hospital bills.
This is a social bill; it takes into consideration the needs of human beings, citizens of this country, wage earners, sincere people who desire to look ahead and insure against this possibility in their old age. I sincerely and firmly request of this committee that they give favorable consideration to H.R. 4700, and that they pass the Forand bill or rather recommend it for passage. I believe it is in the best interests of both this country and the people of this country.
Thank you very much.
The CHAIRMAN. Thank you, Mr. Flynn, for coming to us and giving us the benefit of your views on this subject. Mr. FLYNN. Thank you, Mr. Chairman.
The CHAIRMAN. We will now hear from our colleague, Hon. Joseph E. Karth from the State of Minnesota. We are happy to welcome you, Mr. Karth.
Mr. KARTH. Thank you, Mr. Chairman.
STATEMENT OF REPRESENTATIVE JOSEPH E. KARTH, OF
I appreciate the opportunity to make a statement in support of H.R. 4700 and H.R. 6248 an identical bill which I introduced to indicate my strong feeling regarding the need for a national insurance plan to care for sick and ailing old-age, survivors, and disability insurance beneficiaries.
There has been increasing recognition in recent times that the period which has euphemistically been described as “the golden years,” "the autumn of life” and the like, have, in our highly sophisticated society, been really years of insecurity and even of grim terror to our older population.
The three areas where this insecurity centers, I believe, is (1) economic, lack of assured income for basic human needs of shelter, clothing, food, and so forth; (2) emotional, especially the bewildering shock experienced by men and women who, after a long life of selfsufficiency and independence, upon retirement are treated
as burdens to society and their families; at best, to be tolerated, at worst, to be rejected; and, (3) health, fear of sickness, of debility, of immobility; and especially of the lack of available, adequate health care within the means of the retired.
These areas are listed in order of the general awareness about them as problems. The economic factor was first recognized and answered by social security and by private pension plans to supplement the basic social insurance plan. The emotional area has increasingly come under the attention and study of a whole host of social scientists. It is only fairly recently though that the problem of providing health care for the aging and the aged has become as important as it is.
The established insurance plans such as Blue Cross and Blue Shield and the private medical expense reimbursement programs have attempted, largely unsuccessfully it is generally conceded, to supply a great need for health attention. There is considerable corroboration of this
sad fact in the numerous surveys and studies (including the latest Department of Health, Education, and Welfare work, "Hospitalization Insurance for QASDI Beneficiaries"). Social workers and Government officials have long considered health care for the aged as a major problem for those levels of Government least able to provide help-State and local governments struggling desperately to provide services for the population explosion which has occurred, and to catch up on deferred construction as a consequence of the depression, World War II, and the Korean conflict. The need for com
munity services has become increasingly acute as revenue sources reach the optimum of exploitation and the strait jacket of tax and debt limitation, and political considerations have severely restricted the ability of State and local government to expand services.
In Ramsey County, Minn., in which the city of St. Paul is situated there were, in each of the first 3 months of this year 1,059 OASI beneficiaries needing old age assistance supplementation because social security payments were not suflicient to cover basic maintenance and/or medical needs. Of this number, 369 recipients received OAA payments for medical care totaling $77,723.18, or an average of $73.39 per case per month. Ramsey County officials expect this cost for medical care to total $310,892 by the end of the year.
As evidenced by the statistics, caseloads and payments for old age assistance medical and maintenance cases increase as the total QAA caseload decreases. In Ramsey County CAA total case months decreased by 4,505 from 1954 to 1959 while medical and maintenance cases increased by 5,474. Significantly, maintenance costs increased from 1954 through 1958 by $188,346 while medical costs went up during the same period by $245,429. This is money that has to be obtained at the sacrifice of funds which would otherwise be used for urgently needed projects.
In the 1930's it was determined that the general welfare required a program of national insurance to provide workers with an income after they retired from the labor force. To my mind this is a conservative approach and not a radical one. The idea of social recognition of the need for income maintenance after retirement and human conservation was new but the mechanics of insurance was quite traditional.
Today we are belatedly realizing that the measure of income security for our aged which might have covered the essentials of living, including health care, when the social security system began is now grossly inadequate when illness strikes.
Private health insurance plans for retirees cannot economically provide adequate health care in view of the expanding aged population and skyrocketing medical and hospital costs. Costs which are due to the development and use of the sulfas, antibiotics, and steroids which work miracles in reducing deaths and improving rates of recovery. New techniques of all sorts have revolutionized health care but have made being sick considerably more expensive.
Yet we would have it no other way than when a doctor undertakes to treat a patient he does so by using the most up-to-date procedures and materials generally available.
This is as it should be but this is costly.
H.R. 4700 is a bill that reflects the social conscience of America. It is legislation which guarantees that OASDI beneficiaries will have at least a “floor" under their health care needs. But why shouldn't this group, which is predominantly made up of retired workers, deserve this help? They have, in their day built the greatness of America.
H.R. 4700 is a modest, constructive approach to an increasingly serious social and economic problem. H.R. 4700 is, in the best tradition of the social security system, conservative legislation based on human values and sound financial principles.
The CHAIRMAN. Thank you, Mr. Karth, for coming to us and giving us your views on the subject.
Mr. KARTH. Thank you, Mr. Chairman.