151 percent.

Maine (1951) Maine Rev. Stat. ch. 56, sec. 218, as amended ch. 47, L. '51.

Michigan (1939) Mich. Comp. Laws, sec. 550.31 or 17 MSA 24.591.

Minnesota (1945) Minn. MSA ch. 159.

Montana (1947) Rev. Code of Mont. ch. 15-1401 (d).

SUMMARY

New Hampshire (1943) N. H. Laws '43 ch. 166, as amended L. '45 ch. 96 and L. '47, ch. 55.

New Jersey (1940) N. J. 8. A. 17:48A.

North Dakota (1945) N. Dak. Rev. Code, sec. 26-2701.

2. OPEN ACTS: (TOTAL 9)

4. APPARENT AUTHORITY FOR LAY PLANS (TOTAL 2)

South Dakota (1949) S. D. Code, sec. 11.1101 (1939). Texas (1945) Tex. Rev. Civ. Stat. Ann., art. 1302-2A.

STATEMENT ON S. 3114 BY AMERICAN MUTUAL ALLIANCE, CHICAGO, ILL

The American Mutual Alliance is an association of 113 mutual insurance companies. We have an interest in the subject matter of S. 3114 because a number of our mutual casualty members write accident and health insurance. The stated purposes of S. 3114 are laudable inasfar as they are addressed to the encouragement and stimulation of private initiative in making good and comprehensive health services generally accessible on reasonable terms, through adequate health service prepayment plans, to the maximum number of people. Nevertheless, there is no need for a program of Federal reinsurance of accident and health insurance plans. The amount at risk under most of such plans can be assumed readily by the insurers without danger to their financial structure In those instances where reinsurance is necessary or desirable, it is presently available from private sources. It is therefore entirely unnecessary for the Federal Government to be put to the expense which enactment of S. 3114 would involve. While reinsurance operations under the bill are designed to be self. sustaining, payment of administrative expenses for the first 5 years are to be paid from general revenue. We understand an estimate has been made of $1,250,000 for such expenses for the first year. This may well be too low intially, and the figure is almost certain to increase for subsequent years.

We do not think enactment of this measure will accomplish its stated purposes. Voluntary health insurance has had a very rapid growth in recent years. If this rate of growth continues, and there is no opinion or evidence that it will not, nearly all of the country's population will soon have health-insurance protection if they are able to pay for it. If they are not, enactment of S. 3114 will not enable them to purchase coverage. Taking care of those who find themselves in this unfortunate position is not an insurance problem but one of public assistance, which should be dealt with at a local level. For those who can purchase coverage, increasingly broad protection is available. Insurers are experimenting con stantly in new areas. The incentive to do so comes from free and active coupetition among them, and S. 3114 is not needed and would not serve any useful purpose in this regard.

Under S. 3114 Federal reinsurance of health-insurance plans would be available only if not obtainable from other sources. Due to the existence of private reinsurance facilities to the full extent necessary or desirable, we believe the program would not be used to any appreciable degree. We further believe that therein lies a road and present danger to private enterprise. Once S. 3114 is enacted and Federal reinsurance facilities are set up but not used, there is a likelihood that an effort would be made to remove the restriction against compe tition with private insurers. Once Government is in competition with private enterprise, eventual monopoly by it is a threat which cannot be disregarded.

To the extent that Federal reinsurance was availed of, S. 3114 would put the United States into a new area of insurance business. Not only does S. 314 put the Federal Government into competition with private insurance, it also provides for Federal regulation of the latter. In order to qualify a particular health-insurance plan for reinsurance, all details of the contract except rates (and including them under certain circumstances) would have to be approved by the Secretary. The American Mutual Alliance is of the view that the insurance supervisory officials of the respective States are the proper persons to regulate the writing of insurance.

The Congress is already on record as stating its general policy that continued regulation of the business of insurance by the States is in the public interest Public Law 15 of the 79th Congress, 1st session, enacted in 1945, enunciates this policy as follows:

"The business of insurance, and every person engaged therein, shall be subject to the laws of the several States which relate to the regulation or taxation such business."

That policy should not now be disturbed through the instrumentality of a bill which would directly inject regulatory powers of the Federal Government into the business of accident and health insurance.

A further objection to S. 3114 is the broad powers placed by it in the hands of the Secretary of Health, Education, and Welfare. While not attempting to resolve the question of whether or not the bill is unconstitutional, we bere that the authority which it vests in the Secretary is too great.

In short, we believe $ 3114 is neither necessary nor desirable legislation. We therefore respectfully urge that it not be enacted.

NATIONAL FAMILY SURVEY OF MEDICAL COSTS AND VOLUNTARY HEALTH INSURANCE

By Odin W. Anderson, Ph. D., Health Information Foundation, New York, N. Y.

FOREWORD

What progress have we made as a Nation during the past 20 years in protecting ourselves from the unpredictable costs of illness through various health insurance plans which have been developed?

How adequate is the health protection now carried by nearly 90 million Americans? And how far can the prepayment method be extended to cover groups and individuals not now protected?

To provide information about medical costs today and how American families are meeting them-reliable facts which can be of assistance in improving and extending presert health insurance methods and practices-Health Information Foundation sponsored a series of four independent research projects.

The results of one of these, a national family survey of family medical costs and voluntary health insurance, are presented in this report. The survey was completed in January 1954, and is based on fieldwork conducted during June and July 1953. It provides for the first time in 20 years a comprehensive, nationwide picture of medical costs actually incurred by families, and documents many important facts which had been lacking.

The three other projects are described on page 79 of this booklet.

Health Information Foundation, organized in 1950 as a nonprofit organization, has been supported as a public service by 165 drug, pharmaceutical, Its current studies of medical costs and health chemical, and allied companies insurance are part of a broad fact-finding and public information program dealing with economic and social aspects of health problems. The purposes and activities of the foundation are described elsewere in this booklet. KENNETH WILLAMSON,

Executive Vice President, Health Information Foundation.

INTRODUCTION

This is a report on the extent of voluntary health insurance in the United States in July 1953, and the distribution of the volume and costs of personal health services experienced by families, permitting a comparison of families with some protection as against those with none. Disability insurance is not included although it is recognized that along with life insurance it may be used to defray the costs of personal health services, but neither type of insurance is designed specifically for that purpose, as is true of insurance covering hospital, surgical, and other medical costs.

The survey was conducted by the national opinion research center, University of Chicago, and sponsored by Health Information Foundation. The general problem to be investigated was defined by Health Information Foundation in consultation with representatives of Blue Cross, Blue Shield, private insurance Jacob J. Feldman companies, medicine, public health, and the social sciences.

of the national opinion research center was responsible for the technical aspects of collecting and tabulating the data, and the foundation undertook the task of organizing, interpreting, and disseminating the results. Consultants to the research director of the Health Information Foundation for this purpose were Franz Goldmann, M. D., C. Rufus Rorem, Ph. D., C. P. A., and Louis I. Dublin, Ph. D. The fieldwork was conducted during July 1953 covering the prior 12

months.

The survey is based on single interviews of 2,809 families in their homes. The families comprise 8,846 individuals representing a national sample of the population of the United States subdivided by age, sex, income, size of family, ruralurban, occupation, and region.

A sample of area probability type was used in this study. It was drawn by the same methods as those used by the United States Bureau of the Census in the current population survey. Estimates derived from it are, therefore, generally reliable within small margins. The representativeness of the sample was checked, wherever possible, by comparing estimates derived from it with data independently derived by the Bureau of the Census and other Government

agencies.

This study is a consumer survey, the first national survey of this kind since the series of studies conducted by the committee on the costs of medical care from 1928 to 1932.

The four parts of this preliminary report are:

1. Extent of voluntary health insurance as of July 1953.

2. Family expenditures for personal health services and voluntary health insurance during the survey year.

3. Utilization of personal health services and voluntary health insurance during the survey year.

4. Debt among families due to cost of personal health services as of July 1953. This report will lead to a full and detailed monograph late in 1954 which will include a description of the methodology, further refinement of the data, and similar matters necessary to complete a full report of the study.

ODIN W. ANDERSON, PH.D., F. A. P. H. A. Research Director, Health Information Foundation, New York City. JANUARY 14, 1954.

1. EXTENT OF VOLUNTARY HEALTH INSURANCE AS OF JULY 1953

PART I HIGHLIGHTS

1. Over 87 million people, or 57 percent of the population, have some hospital insurance.

2. Over 74 million people, or 48 percent, have some surgical and other medical insurance. Most of the 48 percent have only surgery and inbospital physicians services but 4,900,000 have substantially complete physicians' services.

3. By occupation, there is a variation of 33 to 90 percent with some type of health insurance.

4. By family income, 41 percent of those under $3,000 have some type of health insurance, and 80 percent of families over $5,000.

5. In urban areas 70 percent of the families are enrolled in some type of health insurance and in rural-farm areas, 45 percent.

6. 80 percent of the families with health insurance obtained insurance through their place of work or through an employed group.

In July 1953 there were over 87 million people, or 57 percent of the population of the United States, enrolled in voluntary health insurance and protected against 1 part of the costs of hospital services, and over 74 million people, or 48 percent of the population protected against part of the cost of surgical and other physicians service. These figures were derived from house to house interviews of a represenative national sample of 2,809 families, comprising 8,846 individuals, subdivided by age, sex, income, family size, rural-urban, occupation and region Thus it has been possible for the first time to project, with a high degree of validity, the extent of enrollment in voluntary health insurance in the United States.

Total enrollments of over 87 million in hospital insurance and over 74 million insurgical and other medical services did not take place suddenly, to be sure, but expansion since 1940 has been phenomenal. In 1940, approximately 9 percent of the population was enrolled in hospital insurance as against 57 percent today Four percent of the population was covered by surgical insurance compared with 48 percent today. That there has been great demand is self-evident. Who are the people enrolled and where are they? What is the enrollment by income, os cupation, region, and rural-urban characteristics? If the present expansion to continue unabated, to what segments of the population must voluntary hea'th insurance be made available? This report will document facts which have here tofore been expressed mostly as opinion, and it is now possible to answer the foregoing questions in some detail.

1. National and regional enrollment

Over one-half of the population in the United States is enrolled in some type of hospital insurance, divided almost equally between Blue Cross and private insurance companies. Almost one-half of the population is enrolled in surgica or other medical insurance of which about 5 million, or 3 percent, are covered by substantially complete physicians' services. In surgical or medical insurance private insurance companies enrollment exceeds that of Blue Cross and Br Shield.

Some duplication of enrollment is evident in that slightly over 10 percent of the people who carry hospital insurance have more than 1 hospital policy and