STATEMENT BY WORKMEN'S BENEFIT FUND OF THE U.S.A., BROOKLYN, N.Y., IN SUPPORT OF H.R. 4700

One of the most important and pressing problems which this country faces today is finding the means to insure a life of dignity and decency for our oldest citizens.

The number of Americans over 65 years of age has been steadily mounting. While at the turn of the century there were only 3 million over 65, today it is estimated that there are more than 14 million.

We have a social and moral obligation to provide the means whereby the elderly can enjoy a decent standard of living free from constant anxiety over what will happen in times of serious illness.

By increasing the contribution rate of employers and employees under the social security tax program by one-fourth of 1 percent and of the self-employed by three-eighths of 1 percent, we could provide insurance against the cost of hospital, nursing home, and surgical services to all those eligible for old-age and survivors insurance benefits. This slight increase in cost to the employee during his earning period would provide necessary protection for him during his years of retirement.

The workmen's benefit fund, which was founded in 1884 to provide mutual aid in times of illness and death, has long urged that some form of health insurance be provided for the elderly. The bill introduced by Representative Aime J. Forand of Rhode Island (H.R. 4700) would provide for this type of coverage. At the same time, it would not conflict with the private insurance companies or the nonprofit insurance groups, many of which have shown a reluctance to extend their coverage to persons over the age of 65.

The workmen's benefit fund urges favorable action by the House Ways and Means Committee at this session of the Congress.

STATEMENT OF THE NATIONAL FEDERATION OF SETTLEMENTS AND NEIGHBORHOOD CENTERS, NEW YORK, N.Y., PREPARED BY FERN M. COLBORN, SECRETARY FOR SOCIAL EDUCATION AND ACTION

The National Federation of Settlements and Neighborhood Centers recommends legislation to strengthen the Social Security Act.

Social Security is a major stabilizing force in our economy. The overwhelming majority of the American people accept the basic principles underlying our social insurance system.

Since 1935, the social insurance program in the United States has been extended in the areas of old age and survivorship, both by upgrading the benefit provisions and notably by extending coverage to new types of employment. The first step has been taken to use social insurance to assure income to those who are permanently and totally disabled. In the important areas of illness and partial disability, however, practically nothing has been done except for veterans. Nor has the concept of risks to family security been broadened to include the impact of medical care on family budgets and the cost of bringing up a large family.

The National Federation of Settlements and Neighborhood Centers therefore recommends legislation:

(1) That the old-age, survivors and disability insurance program be strengthened by

(a) making payments more adequate;

(b) increasing the amount of earnings which can be credited toward benefits to keep in line with current trends;

(c) providing benefits for disabled, insured persons of any age, and their dependents;

(d) extending coverage to earners still excluded;

(e) further extending the base pay covered.

(2) That hospitalization costs for beneficiaries of old-age, survivors and disability insurance be covered through the insurance program.

(3) That Federal funds be made available for the training of old-age survivors and disability insurance staffs, so that sufficient personnel with proper background is available. Enough qualified personnel is essential to the effective administration of the program.

(4) That the self-sustaining insurance principles of our social security program continue to pay for increased benefits.

The CHAIRMAN. Mr. Mason.

Mr. MASON. Dr. Larson, and Dr. Swartz, you have been forthright and specific in your testimony to this committee on the problem confronting us.

Dr. Larson, you have outlined in your statement what is being done all over America on this problem to solve it and while it has not been solved as yet, you have made great strides in the last 2 or 3 years in bringing about a solution.

You even acknowledge that our committee member, Mr. Forand, accomplished a great deal and has accomplished a great deal in that he has stimulated, initiated these movements that are going around, all over this country to help solve this problem.

Yesterday we had the testimony from three different States as to what those States had already accomplished in this line.

I think that is constructive testimony for this committee to receive. Now, Dr. Swartz, in my opinion, you analyzed the problem for us quite well in a sensible way from practical experience rather than from any fancy, theoretical experience, and that in my estimation is very fine testimony.

Now, referring to this questionnaire that was presented to us, I did not notice any reference in that questionnaire at all to a Republican Congressman or a Democratic Congressman. That questionnaire, I know, I do not know who invented it or presented it, or who sent it out, but it is patterned directly upon the practical and efficient politics that COPE, as we know it now, engages in, it is practically a parallel there to their program, and I know from experience what that program of COPE means.

So I find no fault and I see no wrong in other organizations presenting their views to the voters of America because unless they do this America of ours will soon be a socialist, welfare, labor-government and then all the progress that we have made in 150 years will be stopped and we will have a duplicate of what England had a few years ago and what Russia has today, a government at the top rather than at the

bottom.

So I compliment both you gentlemen on your testimony today.
That is all, Mr. Chairman.

Mr. FORAND (presiding). Mr. King will inquire.

Mr. KING. Doctor, is it true that your organization has filed under the lobbying statutes with the Clerk of the House, and also filed a letter of protest at being obliged to file with the Clerk?

Dr. LARSON. I am not familiar with that, sir.

Mr. STETLER. We filed under protest, that is correct, sir.
Mr. KING. Why do you protest?

Mr. STETLER. We question it because of some of the wording in the Lobbying Act and some of the decisions whether or not we are required under the law to file, but we do file regularly and have for many years.

Mr. KING. But you have always protested?

Mr. STETLER. We have for the last 2 years, I know; yes.

Mr. KING. Is it true that this questionnaire presented by Mr. Forand was sanctioned and circulated officially by the American Medical Association, or any branch of it?

Mr. STETLER. The questionnaire was not circulated. It was used officially by the AMA, there is no question about that.

Mr. KING. In view of that admission, will you next year file a protest?

Mr. STETLER. Probably.

Mr. KING. Against registration with the Clerk?

Mr. STETLER. Yes, sir.

Mr. KING. Why do you protest at being obliged to register? Mr. STETLER. Lobbying, although this letter may indicate otherwise, is not the primary activity of the American Medical Association. As I said before, some of the decisions under the Lobbying Act and some of the wording under the Lobbying Act leads us to question, as many other organizations do, whether or not they must file accordingly. However, there is a doubt and we do file. We discussed this about 2 years ago before a Senate committee, the McClellan committee, and indicated to them that we were proceeding in this way.

As a matter of fact, at that time they went into detail in connection with our activity and they did not tell us at that time that we should desist or it was improper for us to file in that way.

Mr. KING. I have some reservations about the act, myself, but I had been advised that the association was offended by the fact that they were required to file. I felt that you were doing the thing for which the law required you to file; if you do it I just wanted it clear.

Then, Dr. Swartz, would you describe and this is strictly for information; I have no knowledge whatsoever, what it is-we will say the Blue Cross, what is the mechanics of the Blue Cross plan?

For instance, assume I am an employee of a concern who is now covered. What are my obligations? Whom do I pay as an employee embraced in the Blue Cross system?

Dr. SWARTZ. I do not know that I can exactly understand what you want. If you are an individual you pay the Blue Cross your monthly or quarterly premium. If you are connected with a concern, that does this on a group basis

Mr. KING. The group is what I am interested in.

Dr. SWARTZ. This is probably taken out, either paid for by the concern, or taken out of the wage at the time the contract is made. Mr. KING. Does the concern contribute as well as the employee? Dr. SWARTZ. I would think this would vary with the arrangement made by each concern. I don't think this is a universal pattern. Mr. KING. They work under contract?

Dr. SWARTZ. I assume they do. There are a great number of variety of Blue Cross insurances, several varieties in each State in fact. This makes a difference in what one would report.

Mr. KING. Is there a typical one? Is there one that could be dealt with as a typical instance?

Dr. SWARTZ. I think there are about a hundred different plans in the United States.

Mr. KING. What I was attempting to elicit, Doctor, was, if I am employed by a large concern, or a small one, and the firm does contract with, say, Blue Cross, and if it is true that in some plans the employer contributes as well as the employee, then if I become ill and seek medical attention how different would that be than under the provisions of Mr. Forand's bill for me seeking medical attention? That is, would it be vastly different?

Dr. LARSON. I think from the philosophical standpoint it would be different. What you are talking about in respect to Blue Cross, in most instances it is a voluntary arrangement between the individual and Blue Cross.

Now, in our own organization at home, which is a group of 35 doctors, and we have approximately 110 employees who are not physicians, the group pays one-half the insurance policy for his hospital insurance. We don't have to be concerned about medical care because we give all our employees medical care free, regardless of what it is, and their families.

Now, they choose what they want. If they don't want any, and some of them don't, because married women, sometimes their husbands have adequate coverage, so they think, and they decide what kind of policy they want.

Now, there are all kinds of policies, as you well understand, I am sure. I don't think you implied that in your question.

Mr. KING. Then, Doctor, with respect to the insurance plans that are now invoked, the patient is covered, he becomes ill; he goes to a physician of his choice; is that right?

Dr. LARSON. That is right.

Mr. KING. They are not restricted?

Dr. LARSON. No.

Mr. KING. Well, it would be acknowledged, I believe, by you gentlemen, that this group Mr. Forand's bill seeks to benefit do have available to them some sort of medical care?

Dr. LARSON. Yes.

Mr. KING. If they are ill they will seek out a doctor?

Dr. LARSON. That is right.

Mr. KING. If they cannot afford it, they will seek out a public hospital.

Now, if we are to insure that group having the means to pay, would that impact do as Dr. Swartz has stated, create a terrible pressure upon the medical facilities of the country any more than it would at the present time if we acknowledge an ill person seeks a doctor?

Would the fact that there would be payment made out of the fund create a greater impact? Is that what in essence you understood Dr. Swartz to state, that they would go regardless of whether they needed attention or not, solely because it would be paid for?

If the answer to that is yes, Dr. Larson, would it not also be true with a person who is insured in a private concern, would he not be subject to that same compelling desire to go needlessly? He has the right to go.

Dr. SWARTZ. I think what you are saying is very true. I think it would be contrary to fact to try to deny this type of experience because this is exactly what happens when you have health insurance or any type of insurance. There are many people who think, well, I am covered I had better go to the hospital.

Sometimes the condition for which they seek hospitalization is the type of thing that you would have treated as a physician at home before hospitalization insurance, very satisfactorily. But after the patient has insurance, whether it is this voluntary type or a Federal program, they tend to stop reacting as an individual who is going to have a little pinch in his own pocketbook and say, "Somebody else is going to pay it," not realizing that this type of demand is going

to cause the increase in the cost of insurance or special outlay on the part of the Government.

This is one of the things that automobile insurance has certainly understood from the beginning and they now have deductible policies. This makes you hesitate a little bit about driving too recklessly down

the street.

These are things that we feel every day at the level of the practicing medicine. It poses quite a problem on the physician. He has to make a decision is it bad enough to go in the hospital?

Of course, with this type of pressure by the patient, there was a time when you almost had to drag the patient into the hospital; he wanted to stay at home. Now it is rare you find anyone who wants to stay at home. Now they are all very willing to go because the hospitalization is paid for.

This adds to the expense because there are times when these people could be handled at home just as well as in the hospital and in many cases actually better, because the patients who have had a little experience with the hospital, after they have been there a couple of days, are eager to go home where there is peace and quiet because hospitals are not as ideal as we would like them to be.

Mr. KING. If I understand you, I might agree with you that insurance has a tendency to make people a little more careless or in this case, more prone to constantly taking their problems up with their physician for the reason that each time they do it they, themselves, do not have to pay.

Dr. SWARTZ. I think this is bona fide experience in every type of situation where this type of setup is practiced.

Mr. KING. That is all.

Mr. FORAND. Mr. Curtis will inquire.

Mr. CURTIS. The purpose of getting the committee off this subject and on another subject certainly has been successful to a degree. I would like to say this, that I believe the committees of Congress should encourage our citizens to testify before us, to encourage our citizens to become politically active.

I listened very carefully to the techniques that were read, the lobbying techniques. I find nothing in there other than what I believe in a representative of government, I would tell others to do and I hope they will become politically active.

It has been this political apathy which has been a handicap in my opinion, to writing good legislation.

The subject of lobbying techniques is very important and one I am very, very much concerned with. I am very disappointed to have Mr. Forand give public voice to rumors of what I regard as highly improper lobbying techniques. Because he has made that public, I think it behooves him as a responsible Congressman to supply for the record or give us the benefit of knowing just where those accusations were made, as to what force was exerted on what doctors and in what community.

Because if it has been going on, it is something we should want to stop even though publicizing it may be the only way of doing it; that would help.

But I want to say, sir, if it is not true and I suspect it is not, then you have brought in a red herring to try, Iwould suggest, to discredit the testimony of this organization.

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