3. Raise the maximum amount of annual earnings counted for contribution and benefit purposes from $4,200 to $6,000, thus permitting higher benefits and increased collections to help finance other improvements.

4. In calculating "average monthly earnings" let each person drop 1 additional year of low (or no) earnings for every 7 years he has worked in covered employment.

5. Pay for 60 days of hospital service for all persons eligible for old-age and survivors insurance benefits.

6. Pay also for their surgical services and for skilled nursing home care after hospitalization.

7. Increase contribution rates of employers and employees by one-half percent each and of the self-employed by three-fourths percent to cover the estimated additions to costs.

Many other bills are also awaiting action by Congress, some of which are in accord with established labor policy for liberalizing old-age and survivors insurance. Others would abolish the retirement test, thus running counter to the accepted principle that old-age, survivors, and disability benefits are intended to replace lost income. Such action would cost as much as the improvements in the Forand bill but would mean far less to the majority of beneficiaries who are unable to earn more than the present limit of $1,200 a year.

Enactment of long-term disability benefits, in spite of opposition by the Eisenhower administration, was one of our major legislative accomplishments in 1956. The program, which was adopted in the Senate by a two-vote margin, represents a compromise but has already resulted in the award of cash monthly benefits to more than 100,000 persons aged 50 or over who are unable to engage in any substantial gainful employment. Persons under 50 are not included, though we sought to protect them, nor are dependents' benefits available.

Many disabled persons have been found ineligible either for disability benefits or for the disability freeze, which avoids reduction of retirement benefits. Denials arise from the stiff employment requirements, from the act's definition of disability, and from its overstrict interpretation by the administration and by State agencies which actually make the determinations.

Denials of benefits under the Government program are in some cases affecting interpretations under private plans achieved through collective bargaining, even though definitions differ.

Since the disability trust fund already had assets of half a billion dollars, more liberal policies can be financed without a higher contribution rate. Many bills have been introduced in Congress directed at broader disability provisions. Therefore be it

Resolved, That in line with labor's historical position, we support continued development of the old-age, survivors, and disability insurance system to provide more adequate benefits, to cover more people, especially those not under any form of social insurance, and to give protection against short-term as well as long-term disability.

We urge prompt consideration and enactment by Congress of the Forand bill, H.R. 9467, to raise monthly benefits by 10 percent, increase the earnings ceiling to $6,000, and add benefits to pay the cost of hospital, skilled nursing home, and surgical services for the aged and for widows and young children. We support the bill's proposals to increase contributions to pay for the new benefits, since a soundly financed social insurance system is a good investment for our members and the Nation as a whole.

We support other amendments previously favored by organized labor, such as permitting women to receive regular benefits at age 60, increasing the primary benefit for each year of continued employment past 65, and providing higher amounts for aged widows.

We believe that men under age 65 who cannot work or cannot find steady employment should be protected through more liberal provisions in regard to disability insurance and through extended unemployment benefits. Such measures are sounder than the reduction of the retirement age for all men to 60, which would be a great expense to the trust fund.

We urge persons who are supporting repeal of the retirement test instead to join us in seeking amendments that will raise benefits for the great majority of the aged who are unable to earn more than the $1,200 a year now permitted. We reaffirm labor's position that the program of long-term disability should provide for workers at any age who are unable to engage in any substantial gainful employment. We support the addition of dependents' benefits for those en

titled to disability payments. We believe that the employment requirements should be relaxed, especially those resulting in the exclusion of workers whose disability prevents their employment in the years before its permanent nature can be established. If the stringent administrative rulings, which we do not feel are necessitated by the definition of disability, are not corrected by the Federal and State agencies, it will be necessary to ask Congress to amend the definition. The Federal agency should be given full authority to make determinations as it does for other types of benefits paid from Federal funds.

STATEMENT ADOPTED BY THE AFL-CIO EXECUTIVE COUNCIL FEBRUARY 19, 1959, IN SUPPORT OF THE FORAND BILL, H.R. 4700, PROVIDING HEALTH BENEFITS FOR THE AGED

The nationwide interest in the Forand bill has further demonstrated the need for making hospital care and nursing home service available to social security beneficiaries. The high cost of medical services should no longer be permitted to bar older people and widows from required health care.

We urge the Ways and Means Committee of the House of Representatives to proceed at once with hearings on H.R. 4700, introduced this week by Congressman Aime Forand, so that legislation may be enacted this year. Experience under collective-bargaining plans and other forms of voluntary insurance and the findings of recent studies provide a sound basis for Federal action without further delay.

Other organizations, like our own, are prepared to present the committee with recommendations on practical provisions for making hospital care and related benefits available through the mechanism of social security in ways that will promote good care, speed rehabilitation, and assist hospitals to meet increased demands for service.

Proposals advanced by organized medicine and the commercial insurance industry as alternatives to the Forand bill are grossly inadequate and unfair to older people. Only prepayment during years before retirement can make extensive and lasting health insurance available to the great majority of the aged. Today, only two out of five have any insurance whatever, and much of it carries very limited benefits which can be canceled any time or run out when lifetime dollar ceilings are reached.

We further urge the Congress to increase the social security benefits to more adequate levels, especially through lifting the earnings ceiling from $4,800 to $6,000 and by computing the benefits of persons with many years of coverage on their years of highest earnings.

As in the past, we support adequate financing of the program. We welcome the endorsement of its current financial soundness by the Advisory Council on Financing.

SUMMARY OF HEALTH BENEFITS UNDER OLD-AGE AND SURVIVORS INSURANCE PROPOSED IN THE FORAND BILL, H.R. 4700, INTRODUCED FEBRUARY 18, 1959

1. THE PROPOSAL

To amend old-age and survivors insurance so as to provide insurance against the cost of hospital, nursing home, and surgical services to all those eligible for old-age survivors benefits or who would be eligible if they applied. This bill is virtually identical with the health benefits amendments proposed by Congressman Aime J. Forand in 1957 as part of H.R. 9467.

2. ITS PURPOSE

As people grow old, they need more medical care but usually have less money to meet its rising cost. Most of them cannot get adequate protection through private insurance, and a severe disability may mean financial disaster.

Individual health insurance policies are expensive; they usually exclude a preexisting condition; they may be refused or canceled. Group insurance also is unavailable to most retired persons and aged widows since they have no employment connection such as normally is required.

Young widows and children similarly have low incomes and little opportunity to obtain private insurance.

Many hospitals have constant and serious financial difficulties because they have to provide free service to these people. Private charities and public assistance agencies frequently pay for such hospital care or help make up hospital deficits.

The proposal would transfer to the self-supporting insurance system a financial burden which now falls on individuals and private charities, and on public assistance financed by taxpayers. Thus it would work in the direction preferred by Congress.

Fifteen million persons would be eligible in 1960.

3. THE BENEFITS

A. Hospital and nursing home services

Each eligible person would be insured against the cost of hospital care, including a semiprivate room and all the hospital services, medical care, drugs, and appliances which the hospital customarily furnishes its bed patients. The insurance system would not pay the attending doctor's bills, except for surgical services.

Skilled nursing home services would be covered if the patient is transferred to the nursing home from the hospital and if the services are for the same condition or one arising from that for which he received hospital care. The care in the nursing home could be extended so that up to 120 days of combined care would be provided in a 12-month period but only 60 days could be hospital care. B. Surgical services

The insurance system would pay the cost of surgical services provided in a hospital, or in case of an emergency or for minor surgery, in the outpatient department of a hospital or in a doctor's office. Any individual may freely select the surgeon or his choice provided the surgeon has attained specified professional recognition (subsec. (c) (2)), except in cases of emergency or where the requirement of such certification is not practical. The cost of oral surgery by a dentist in a hospital would be covered.

C. Procedures for insured persons

The insurance procedures would be like those already developed for patients covered by private insurance plans that provide service benefits.

A person eligible for hospital or nursing home insurance would, as at present, be admitted to such an institution on his physician's referral. The patient could receive insured services from any qualified practioner or institution which has agreed to participate and to be paid for services insured under the plan. In emergency situations, referral or prior agreement could be waived.

4. ADMINISTRATION

The program is to be administered by the Secretary of the Department of Health, Education, and Welfare. The OASI system would use its existing recordkeeping system to certify eligibility, to issue insurance cards, and the like. For aged beneficiaries, this would mean paidup hospital and surgical insurance for life.

Any qualified provider of services would have the right to participate. Payments could be made at such rates as are provided in each agreement covering the actual costs incurred, or in some other mutually agreed basis. Widely used patterns for determining rates have been developed under Government and private programs.

The agreements are to stipulate that the payment at the agreed rates shall constitute full payment for the contracted services; the patient may not be billed for additional sums for the contracted services. Agreements of this type are now in effect under the Federal program for medical care for dependents of members of the Armed Forces.

The Secretary could make agreements directly with providers of services or with their authorized representatives. Group practice prepayment plans would be included.

The Secretary shall prescribe regulations and establish an Advisory Council. He may utilize the services of private nonprofit organizations to the extent that he determines that their utilization will contribute to effective and economical administration.

5. SPECIAL SAFEGUARD

Nothing in the bill shall be construed to give the Secretary or administering agencies authority over the internal management of participating institutions or over the practice of medicine or the manner in which medical services are provided.

6. EXCLUSIONS

Persons eligible for permanent and disability benefits are not included. The proposal does not apply to costs incurred in Federal hospitals, or in tuberculosis or mental institutions, or in other countries. It does not cover all types of nursing homes or apply to institutions that provide primarily domiciliary care. It does not apply to workmen's compensation cases unless arrangements are made to reimburse the insurance system. It does not include elective surgery, or nonsurgical medical services except those customarily furnished by hospitals as an essential part of hospital care for bed patients.

7. FINANCING

The bill would increase contribution rates of employers and employees by percent each and of the self-employed by % percent.

8. RELATION TO PRIVATE INSURANCE

The benefits would start 12 months after enactment. This would give time for adapting private insurance arrangements so that they supplement rather than duplicate the new benefits.

The CHAIRMAN. We thank you, Mr. Cruikshank, for bringing to us the views of the AFL-CIO with respect to the problems to which H.R. 4700 is directed, and also your discussion of the provisions of the bill. Mr. Forand.

Mr. FORAND. Mr. Chairman, I ask unanimous consent that that alert letter be made part of the record.

The CHAIRMAN. Do you want to make that a part of the record? Mr. CRUIKSHAK. Yes, sir; if you wish.

The CHAIRMAN. Without objection, that letter will be included at the point at which you referred to it.

Mr. FORAND. I do not have any questions, Mr. Chairman.

I do want to commend Mr. Cruikshank and his assistants for the fine statement prepared for this committee. It contains a lot of information that I am sure will prove of great interest.

That is all.

The CHAIRMAN. Mr. Simpson.

Mr. SIMPSON. Mr. Cruikshank, does the AFL-CIO presently favor national compulsory health insurance?

Mr. CRUIKSHANK. Mr. Chairman, it does.

Mr. SIMPSON. Do I understand that the AFL-CIO is complaining about lobbying on the part of the doctors?

Mr. CRUIKSHANK. No, sir; we are not. The doctors have a perfect right to lobby. They have a perfect right, and we would be the last to stop them from doing it even if we could.

Mr. SIMPSON. You just complained about the president of the AMA having written to other doctors and referred them to a publication wherein they might find the basis for objecting to this proposed legislation. Do you object to that?

Mr. CRUIKSHANK. No, sir.

Mr. SIMPSON. Why did you put it in the record?

Mr. CRUIKSHANK. No; I don't object.

Mr. SIMPSON. Why did you put it in the record?

Mr. CRUIKSHANK. I am glad you asked the question, because if my tone implied I objected to it, I want to make it clear that I am not. Mr. SIMPSON. You approved of it then?

Mr. CRUIKSHANK. I approve of the American Medical Association approaching their Representatives in Congress the same as any other group of citizens and I would defend their right to do so.

Mr. SIMPSON. You did not put it in in any critical sense?

Mr. CRUIKSHANK. I did put it in in this critical sense. I put it in for this reason, Congressman Simpson: I put it in to indicate to the members of this committee and to your colleagues that if they are getting a flood of mail, they will properly be able to appraise it, knowing that it was inspired from headquarters in this way, and I also pointed out that this was put in just as an operation of the organization, not asking their members to think it through.

These doctors are all university and postgraduate people. They represent a level of education way above the level of our people.

Mr. SIMPSON. You mean they should actually know what the law would do to them?

Mr. CRUIKSHANK. It would seem to me that they would have a better chance of doing it rather than be told what to say and then say we will send you the reasons for saying it later.

That is what I was pointing out.

Then I would like to also point this out, Congressman, when you are evaluating your mail. Our members don't have secretaries so that we can say, "Send the Congressman a letter along this line and I will sign it." Our members have to sit and chew their pencils and write out letters to their Congressmen.

Mr. SIMPSON. You are critical because they are what. Too intelligent, or what?

Mr. CRUIKSHANK. No; I am not critical of what they are saying at all. I am only pointing out as a means of evaluating the mail that comes in that it is inspired from headquarters and that it was given out in just this way. I am sure the members of the committee will be able to evaluate it better knowing how this letter came.

Mr. SIMPSON. Will you agree with me that your organization inspires letters and postcards to the Congressman?

Mr. CRUIKSHANK. We encourage our members to write their Congressman.

Mr. SIMPSON. I am very happy you

do.

You do not object to anyone, I am sure, writing to his Congressman, do you, including the doctors?

Mr. CRUIKSHANK. No, sir; I don't object to that, but I don't believe that we have sent out letters to our people telling them to oppose this bill and the reasons will follow later.

Mr. SIMPSON. I am glad that you did put it in the record, because I am glad the doctors are warned that there is legislation which in their judgment threatens them in the practice of their profession and if the legislation is unwise and becomes law, it might cause injury or disaster to the citizenry of the country. Consequently, I think they do perform a service when they make the wishes of the professional people known to Congress.

Surely you do not disagree with that.