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I will not go into the details of what is being done on a national level in this regard. Suffice it to say that a regional conference on problems of the aging is being scheduled for Baltimore in early 1960. This regional conference is similar to other regional conferences that have been held throughout the country in the past several months.

In brief, then, the problem of provision of health care for those over-65'ers is not as acute as some of the proponents of H.R. 4700 would have us believe. There is progress being made on a local level; and, as more information is gathered, solutions to additional problems that may be uncovered will be found. A positive, optimistic approach has been adopted on a State level.

In closing, I would like to point out some things which have probably already been brought to your attention dealing with the actuarial soundness of the whole social security program. We are in agreement with these points, but I would like to emphasize them once again:

1. Such a program would lead to poorer medical care for those people over age 65.

2. This would eventually lead to a completely socialized medical program for the entire country.

3. You would find that as more hospital and nursing home beds became available the tendency would be to admit patients and provide them with custodial care rather than care for acute or chronic illness.

4. There is the inherent danger of complete collapse of the social security system because of the financial drain placed upon it for this type of program. It is the sincere wish of the Medical and Chirurgical Faculty of the State of Maryland that H.R. 4700, 85th Congress, should not be favorably considered by the House Ways and Means Committee.

Sincerely,

KARL F. MECH, Chairman, Legislative Committee.

STATEMENT OF THE ASSOCIATION OF AMERICAN PHYSICIANS AND SURGEONS, INC., BY DR. LOUIS S. WEGRYN, PRESIDENT

The Association of American Physicians and Surgeons is opposed to H.R. 4700, known as the Forand bill, for many sound and logical reasons which will be given later in this statement. The association's position of opposition to socialistic medical care for the beneficiaries of social security was first established when the delegates (elected by the members in each State) and the assembly (representing the membership at large), meeting in Miami Beach, Fla. on April 27, 1957, unanimous adopted a resolution "in opposition to free hospitalization for social security beneficiaries." AAPS reaffirmed its opposition to this type of legislation when the delegates, meeting in Chicago, Ill. on October 19, 1957, unanimously approved a resolution opposing the original Forand bill (H.R. 9467) of the 85th Congress.

Once again, the AAPS delegates and assembly stated their opposition to this socialistic legislation at their meeting on April 4, 1959 at Fort Worth, Tex., when they unanimously adopted a resolution of opposition specifically aimed at the Forand bill, H.R. 4700 (86th Cong.). The resolution follows:

"RESOLUTION ON THE FORAND BILL (H.R. 4700)

"Whereas, the Forand bill (H.R. 4700) proposes to furnish hospitalization, surgery, and nursing home care for the beneficiaries of social security (about 13 million persons); and

"Whereas the Forand bill would constitute the initiation of compulsory national health insurance for one segment of the American public at the expense of working citizens; and

"Whereas compulsory health insurance (socialized medicine) historically has led to the deterioration of medical care to the detriment of patients; and "Whereas unlimited financing of the services would increase social security taxes by raising both the ceiling of the taxable income and the tax rate; and "Whereas these increased expenses would further strain an already unbalanced social security financial structure; and

"Whereas care of the aged, medical or otherwise, is and should be morally a responsibility of families and localities: Therefore be it

"Resolved, That the assembly and house of delegates of the Association of American Physicians and Surgeons, Inc., in regular session assembled in Fort Worth, Tex., this 4th day of April 1959, oppose H.R. 4700 and urge the members of the Senate and House to vote against its enactment."

The members of AAPS oppose H.R. 4700 because

1. In most instances it denies the vitally important right of free choice of physicians.

2. It imposes a third party into the physician-patient relationship which will inevitably place the Federal interventionist in the position of making medical decisions affecting the health and welfare of the patient.

3. It is unquestionably socialized medicine for the recipients of social security paid for by the working population who, eventually, would want to get their share of the social security socialistic medical and hospital doles. This would lead to a demand for similar socialized medical and hospital care for the entire population-with resultant inferior care.

4. It shifts the responsibiilty for care of the aged and sick from the family and local agencies (where they rightfully belong) to the Federal Government.

5. This welfare-state approach would contribute to the destruction of the individual's self-reliance and initiative and encourage his dependence on an all-powerful central government for his health and welfare needs.

6. Since the medical and hospital care costs of this plan are entirely unpredictable, there is utterly no way of knowing how much H.R. 4700 would cost the American taxpayers. Social security is already paying out more money than it is taking in by way of compulsory taxation. The social security trust fund is short in cash of more than $200 billion to meet its committed doles to the constantly increasing number of beneficiaries. H.R. 4700 would compound the insolvency and irresponsible financing of social security.

7. It would mean higher taxes with less take-home pay for employed citizens who are already bending under the yoke of excessive compulsory taxation.

8. The Federal Government would be given the right to fix fees and charges, and the establishment of this principle would lead to its extension to other segments of the economy and inevitably to inferior medical care, as it has done in every country where socialized medicine is practiced.

9. "Something for nothing" hospital and medical care would encourage patient abuses of the system and would create a dangerous crowding of hospital space.

10. H.R. 4700 would tend to destroy community incentive to support and build hospitals and citizens would be encouraged to shift the responsibility to the Federal Government and away from private and local governmental sources, where this responsibility rightfully and morally belongs.

The members of this association believe that these are valid reasons for opposing H.R. 4700.

Care of the sick and aged should be the responsibility, first, of the families, and, second, local agencies. The services rendered should be provided under our incomparable system of free enterprise and not be shifted to the Federal Government with services provided under an expanded system of socialism.

This bill, if passed, will be such a strong endorsement of the philosophy of social security, and will fix so firmly upon the American people the shackles of the welfare-state, that most citizens alive today will live to see the total and permanent destruction of individual freedom.

We urge the members of your committee and the Congress to reject H.R. 4700, Social Security Amendments of 1959, and any other type of legislation proposing socialized medical and hospital care-a system that inevitably would lead to the deterioration of these services to the detriment of the American people.

LOUIS S. WEGRYN, M.D.,

President, Association of American Physicians and Surgeons, Inc.

WINSTON-SALEM CHAMBER OF COMMERCE,
Winston-Salem, N.C., July 10, 1959.

Hon. WILBUR MILLS,

Chairman, House Ways and Means Committee,
House Office Building, Washington, D.C.

DEAR CONGRESSMAN MILLS: The Winston-Salem Chamber of Commerce wishes to register its opposition to H.R. 4700, known as the Forand bill.

It may be of interest for you to know how this decision was reached.

A subcommittee of 5 business and professional men from our governmental affairs committee studied this bill and made its recommendation to the full committee, comprised of 21 business and professional men, representing an excellent cross section of all types of business.

The governmental affairs committee, in turn, made its recommendation to the board of directors, which has about 35 members, again representing the various professions and a number of different types of businesses.

Each group gave careful consideration to the bill and arrived at the conclusion that it should not be enacted.

It will be appreciated if you would see that this is made a part of the record of the House Ways and Means Committee which, I understand, will soon have hearings on this bill.

Very sincerely yours,

ROYALL R. BROWN, President.

CALIFORNIA STATE CHAMBER OF COMMERCE,
San Francisco, July 8, 1959.

Hon. WILBUR D. MILLS,
House of Representatives,
House Office Building,
Washington, D.C.

DEAR MR. MILLS: The California State Chamber of Commerce wishes to be on record as opposed to the principles of H.R. 4700 by Congressman Forand, providing for nursing home care, hospitalization, and surgical services as an additional benefit under the Social Security Act.

Voluntary prepaid medical care plans now cover a substantial proportion of the population. In California, as in other parts of the country, various experimental programs are now either in actual operation or in process of formulation to provide adequate medical care at reasonable cost to the elderly members of our society.

The enactment of H.R. 4700 and the creation of statutory medical care benefit rights would, for all practical purposes, destroy voluntary experimentation in the area of expanding prepaid medical care for the elderly and those few others who have not been included in the great expansion of the covered population during the past 15 years.

We believe that voluntary arrangements, inherently flexible enough to accommodate the varying needs and wishes of the beneficiaries, are much to be preferred to a necessarily rigid and cumbersome Federal system with its attendant plethora of rules and regulations.

After adequate experimentation, it will be possible to determine the size of the hard core of individuals who cannot be included in workable voluntary prepaid medical care plans. For such individuals, a governmental plan is proper, but the role of Government should be confined within this limit.

Cordially,

JAMES MUSSATTI, General Manager.

STATEMENT WITH RESPECT TO H.R. 4700-86TH CONGRESS, 1ST SESSION-
BY PAUL P. HENKEL, ISLIP, N.Y.

I object to the principle of adopting a Federal program providing hospitalization and nursing home care for OASDI eligibles through the medium of title II of the Social Security Act. I also object to the principle of adopting any new or similar Federal program providing like benefits to all aged persons, whether eligible for OASDI, or not, through any other Federal Government medium or activity.

My objections are not based on a callous disregard of a problem that exists. The problem itself exists but its urgency and extent has yet to be defined. Moreover, the issue presented by H.R. 4700 merely adopts one course of action in meeting the problem which, in my opinion, would have ultimate unfortunate consequences. I would reject any attempts to interpret opposition to the course of action as proposed as an objection to hospitalization and nursing home care for our older population.

I subscribe to the viewpoint of the Secretary of Health, Education, and Welfare, Arthur S. Flemming, who testified before your honorable committee on July 13, 1959, to the effect that such a plan as proposed would ultimately eliminate voluntary insurance plans. In this respect, I would respectfully call the attention of the committee to the increased activity and efforts of private insurance carriers within the last few years in making hospitalization coverage available to our older population. I feel that this is a salutory beginning, that satisfactory further progress will be made in this area and that the public will accept the coverage offered. In support of this, I would cite the forecast of the Secretary of Health, Education, and Welfare contained in his report dated April 3, 1959, to this committee that, if health insurance coverage of persons aged 65 or more continues to grow as it did during the period 1951-57, approximately 70 percent of this group would have some form of health insurance by 1965. Although the coverage and benefits provided may not expand as quickly as desired in some quarters, I submit that the normal steady progress obtainable through private initiative rather than governmental direction is the more desirable course.

I support the further viewpoint of the Secretary of Health, Education, and Welfare, as presented in his testimony before your committee, for Congress to await a report on current studies to determine what role the Government should play in developing old-age health plans which would be both practical and desirable. The adoption of this viewpoint does not necessarily mean that it is hoped that dilatory tactics may avoid meeting the problem. Rather, it is a supplementary viewpoint that forthcoming studies may indicate that ultimate coverage should be provided through private sources.

I would urge that the committee refrain from adopting new and different programs to be financed through social security taxes. There is in old-age and survivors insurance and disability insurance some connection with employment. In the former instance, there is a wage-related pension benefit and, in the latter instance, a wage-related benefit replacing wages lost through disability. However, the incident of illness of a retired person, his dependents or survivors, is not connected with employment or prior employment. Thus, the inclusion of the programr contemplated by House bill No. 4700 under title II of the Social Security Act is inimicable with the basic purpose of the title. The program contemplated should be financed, if at all, through general taxation rather than by specific excise tax such as the social security tax. The fact that the social security tax collection and administration processes present an easy way to finance the contemplated program should have no substantial bearing in this matter.

I question the wisdom of including the contemplated program, which involves comparatively unpredictable costs and contingencies which are not susceptible to application of actuarial techniques, under title II of the Social Security Act. H.R. 4700 provides for the commingling of trust funds. The increase in the social security tax, if levied, should be sequestered and placed in a separate trust fund similar to the disability trust fund. The financing, benefit payments, and administrative costs should be segregated so that experience under the program can be readily reviewed and evaluated. This suggestion, of course, does not alter my basic opposition to the contemplated program. Another reason for opposing H.R. 4700 is the existence of the social security title I program of old-age assistance, which already provides the mechanics for vendor payments for medical care for the older population which is in need. At least, the basic purpose of providing medical protection for older persons is already in operation under title I and it does not discriminate between those who are and those who are not covered under title II of the Social Security Act. This existing method is, at least, a more equitable manner of meeting the problem through Federal Government action. In this connection, the committee should take into consideration that vendor payments for medical care for those receiving old-age assistance during the fiscal year ending June 30, 1958, amounted to $165 million (see table 3, Social Security Bulletin, March 1959). It would not be amiss to

mention that substantial support of H.R. 4700 seems to come from those who are dissatisfied with the progress under title I and who wish to replace some element of State governmental discretion under the program with centralized governmental control. The choice of title I rather than title II as a more appropriate means of meeting the problem should not be interpreted as support of the former (title I) as a vehicle for meeting the problem.

H.R. 4700 proposes to increase the social security tax on employees onefourth percent; on employers, one-fourth percent; and on self-employed individuals, three-eighths percent. It proposes up to 60 days full hospital benefits and 120 days of nursing home services less those days of hospitalization in a 12-month period. The attention of the committee is respectfully directed to pages 76 through 89 of the April 3, 1959, report of the Secretary of Health, Education, and Welfare to the committee. On page 87, it is estimated that the level-premium cost of a 60-day hospital full benefit, as developed by the Social Security Administration in conjunction with the HIAA (Health Insurance Association of America) estimates, would require a 1.5-percent tax rate. Furthermore, on page 88 of the report, it is estimated, in a similar manner, that the 120-day nursing home benefit less up to 60 days hospital care would require a 1.16-percent tax rate. Thus, in effect, the proposal under H.R. 4700 would appear to be grossly underfinanced from a long-range level premium cost basis.

Under the 1958 Social Security Act Amendments, the tax base was increased from $4,200 to $4.800 and the scheduled tax rates were increased as follows (when compared to the act prior to amendments):

One-fourth-percent increase in 1959-61, 1965, and 1975; three-fourths-percent increase in 1963–64, 1966–68, 1970-74; 14-percent increase in 1969.

The further one-fourth-percent increase in the tax rates as proposed in H.R. 4700, though insufficient from a level-premium cost basis, would cause a threefourths-percent increase in the 1960 tax rate over the 1959 tax rate-an additional $36 annual ($3 per month) tax bite out of the wages of each employee making $4.800 or more. This comes on top of the 1959 additional annual $25.50 ($2.12 per month) tax bite out of the wages of each similar employee. This acceleration in tax which has already begun, when coupled with the widespread increases in State income tax levies which have occurred in 1959 present a serious problem to employees and their families and to employers. The matter of allocating disposable or spendable income after taxes is a critical matter facing all strata of our society. Continued encroachment of taxes upon such income may only result in stultified standards of living. I submit that the currently employed individuals are, as a matter of self-interest, more concerned with providing for the immediate and pressing needs of day-to-day living than they are with the defraying of the medical costs of the illnesses of the current OASDI beneficiaries.

It is no longer valid to evaluate legislation on a piecemeal basis. The total effect of all legislation involving taxes must be considered as a whole. Accordingly, it is respectfully submitted that this honorable committee should balance the respective interests of the entire population with the interests of the smaller group for which benefis are proposed under H.R. 4700.

Hon. WILBUR D. MILLS,

HOUSE OF REPRESENTATIVES,
Washington, D.C., July 16, 1959.

Chairman, House Committee on Ways and Means, House of Representatives, Washington, D.C.

DEAR CHAIRMAN MILLS: I am taking the liberty of enclosing a letter which I have received from Dr. John O. Austin, Garden City, Kans., together with one which has been transmitted to him by one of his patients, Catharine Warren Brown, a former resident of England and now residing in Garden City. This correspondence pertains to H.R. 4700 now under discussion by your committee. Will you kindly make the enclosures a part of your committee hearings on this measure?

Thanking you in advance and with all good wishes, I am,

Sincerely yours,

J. FLOYD BREEDING,
Member of Congress.

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