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for improving voluntary ways and means of financing health care for our senior citizens; and secondly, in opposing H.R. 4700.

Our society some 3 years ago intensified its studies toward solving some of the medico-economic problems of the aged. The Iowa State Medical Society, cooperating with the Iowa Hospital Association, Iowa Dental Association, and Iowa Nursing Home Association, established the Iowa Joint Council for Care of the Aged—one of the first, if not the first, such State groups to be organized. Its purpose is to determine the extent to which health care problems of asl types exist in Iowa and to recommend remedial measures.

The Iowa State Medical Society's Blue Shield plan was the first in the Nation to place a special, low-cost senior 65" plan on the market at a rate within the ability of nearly all except the indigent to pay. It has met with an excellent public response. The same is true for the Iowa Hospital Association's Blue Cross plan sold concurrently. At least two large, private insurance companies have chosen Iowa within the past 2 years to introduce policies for the aged and others are entering this field on an accelerated basis.

Iowa doctors are assuming that this committee, proponents, and opponents of H.R. 4700, all sincerely want the same thing: the best medical care for our senior citizens, together with all others. We earnestly thank Mr. Forand for focusing attention on this matter of health care for the aged at the national level and in Iowa, which has one of the highest percentages of people 65 or over in the Nation.

However, Iowa doctors feel the approach inherent in H.R. 4700 toward solving the various problems through the medium of further expansion of social security into this field is seriously in error because:

i. Any problem that can be met voluntarily by private enterprise should not be entered by Government.

2. It would interpose the Government between the patient and the doctor.

3. The vast majority of Iowa doctors are convinced that the timetested practice of medicine on a voluntary basis provides the best possible care for any segment of our population. So firmly convinced are they of this fact, that they are underwriting, where needed, more than half the cost of their services.

4. It is unnecessary. Accelerating forces are at work that will reduce substantially the number of retired persons supposedly requiring subsidization by Government. More and more insurance companies in Iowa are following the lead of the Blue plans in allowing policyholders to retain health insurance after age 65, or retirement, without loss of coverage or increase in premium. In some areas of coverage, such as paid-up-at-65 policies and major medical, insurance companies are leading Blue Shield.

5. The doctors of Iowa see this bill as a major beginning toward an ever-expanding Government-controlled health care program leading inevitably to compulsory national health insurance and all its evils.

The examples of positive plans and cooperative efforts and accomplishments in Iowa which I have listed are continuing to grow. Such voluntary methods, in conjunction with already existing State and local agencies, including Federal aid, can and will solve the problems of health care for the aged in Iowa without the intervention of the Federal Government.

We ask that this committee give us reasonable time to perfect these plans and cooperative efforts for the health and well-being of over 2,700,000 Iowans.

Thank you. The CHAIRMAN. Dr. Irving, we thank you, sir, and Dr. Wichern, for coming to the committee and giving us the thinking of the Iowa State Medical Society. We appreciate your coming from Iowa to the committee for this short period to help.

Mr. Jensen, we want to say we appreciate your accompanying these gentlemen. We know you have a very busy schedule. We appreciate your being here to introduce them.

Mr. JENSEN. Thank you, Mr. Chairman.
The CHAIRMAN. Are there any questions?

Mr. Mason. I just want to make the statement that this is the third State that is doing constructive work toward solving this problem.

Mr. FORAND. Mr. Chairman.
The CHAIRMAN. Mr. Forand.

Mr. FORAND. Dr. Irving, you have commented on the fact that Iowa was the first State to have the Blue Shield senior-65 plan accepted by the physicians and put into operation.

. You did not intend to leave with the committee the impression that all the doctors in Iowa were very heartily in favor of this, did you?

Dr. IRVING. No, I certainly did not, Mr. Forand.

Mr. FORAND. Because I have information here that on a motion to defeat the adoption of the plan, the vote was 43 for defeating it and 56 in favor of it.

Dr. Irving. In the house of delegates, as I recall the figures-and I have to recall them from memory-in adoption of the plan it was a 2-to-1 vote; 66 to 33, sir.

Mr. FORAND. 66 to 33.
Dr. IRVING. I believe that is right.
Mr. FORAND. I have here 43 to 56.

Dr. IRVING. I think that was the vote on reconsideration of the plan.

Mr. FORAND. Whatever it was, there was opposition to it?
Dr. IRVING. Yes, there is opposition to the plan.

Mr. FORAND. A substantial segment of your organization. Then, I have further information which I received from a doctor in Iowa, who does not want his name published, of course, because he says, “One would certainly be crucified if his name were to become known," indicating that sanctions would be used against him.

However, he goes on further to say that: If only seven men had changed their minds, there would have been no senior 65 and no Iowa Blue Shield. The only thing which held it together even then was the totalitarian way in which the executive committee of the Iowa Blue Shield, several of them officers of the Iowa State Medical Society, was bullying this program through and published it in the newspapers statewide before the doctors of the State had even a prayer to say. No, the Soviet at its very best could not have bullied their ideas through any better.

Have you any comments on that?

Dr. Irving. We have had opposition, Mr. Forand, but I believe as a physician and trying to conduct our manners in the State society, we have done it on a democratic basis. We had this problem before

the special house of delegates in February. It was voted by a 2-to-1 vote then.

It was also from then until April reconsidered by the membership. The delegates voted in April again by that size vote to put the program into effect.

Mr. FORAND. That followed quite a series of information bulletins that were issued by the Union County Medical Society of Chariton, Iowa.

I have here their bulletins fighting tooth and nail against the adoption of any Blue Shield plan, so I would not want the committee to get the impression that this was all peaches and cream by a long shot.

Dr. IRVING. I did not wish to leave that impression with the committee, Mr. Forand.

Mr. FORAND. I am not accusing you of having done that, but I just want to clear the picture.

Dr. Irving. I think there is inherent in Iowa, perhaps in other States, the difference in the rural community and the urban community, and that raises differences of opinion as to how this should best be done, but this was carried on in a democratic way in my opinion and was received by the membership and we feel that we should get behind the program and try and make it a success.

Mr. FORAND. May I say this only: That whether it is this program, or the program outlined in my bill, or some other program that would solve the big problem that we are facing, and that is care of the aged, I hope all of us will continue our efforts to that end.

Thank you very much.
Dr. IRVING. That is right.

I would like to say that I am sure you will find the physicians of Iowa will go behind such programs the majority feel are necessary to take care of this problem and you won't see a resistance movement on their part should your bill become law. We are physicians first, sir.

Mr. FORAND. Thank you. That is all.
The CHAIRMAN. Are there any further questions?
If not, gentlemen, again we thank you for coming to the committee.
Our next witness is Mr. Gordon Brewer.

Mr. Brewer, will you identify yourself for the record by giving us your name, address, and capacity in which you appear. STATEMENT OF GORDON E. BREWER, CIVIL SERVICE COUNSEL,


Mr. BREWER. Mr. Chairman and members of the committee, I am Gordon E. Brewer, civil service counsel for the American Federation of State, County, and Municipal Employees, AFL-CIO.

I am accompanied today by my associate, Mr. Lawrence Smedley, of our research department, and Mrs. Katherine Ellickson, of the

social security department

of the AFL-CIO, who has very kindly consented to assist us in case of technical questions.

First of all, let me say that our union is comprised of approximately 200,000 members public employees, in 46 States.

I wish to express my appreciation, as well as that of our members, to the committee for this opportunity to present our views in favor of H.R. 4700, popularly known as the Forand bill which will provide hospital, nursing home care, and surgical services for the recipients of old age and survivors insurance benefits.

Mr. Nelson Cruikshank, director of the department of social security of the AFL-CIO, has already made a detailed statement in support of Congressman Forand's biil. We wholeheartedly endorse the position taken by Mr. Cruikshank on this proposal as the spokesman for the organized labor movement in this country. We intend to supplement Mr. Cruikshank’s excellent statement by some additional information, showing the great need of our own members for the type of protection which will be afforded to all recipients of old age and survivors insurance benefits by this bill.

As civil service counsel for our union, I am responsible for the work of the department of research and service. In addition to the usual wage and fringe benefit surveys which research people customarily prepare, we advise our membership on questions relating to civil service, retirement, social security, and health insurance plans. We have drafted many of the retirement laws which are in existence throughout the country. We have also worked closely with State and local governments in obtaining the adoption of health and accident insurance plans. Consequently, we are intimately acquainted with the problems of retired public employees in this field.

State, county, and municipal employees in general, and our members in particular, desire the passage of the Forand bill

. There are approximately 2 million employees of State and local governments participating in the social security program at the present time. OASDI provides the only retirement benefits available to approximately 800,000 State and local governmental employees, a group which comprises one-eighth of als State employees and one-seventh of all local governmental employees. OASDI coverage represents the only form of retirement benefits available for 30 percent of all county and 21 percent of all special district employees. In 12 States, social security provides the only retirement protection for a majority of public employees within our jurisdiction. While it is true that a majority of State, county, and municipal employees participating in the social security program are covered by additional retirement systems, it should be pointed out that where a combination with social security has taken place, by and large there has been a diminution of the benefits received under the State or local retirement systems.

Even though retirement benefits in the public employee field are still far from adequate, it is only fair to state that in some cases where a combination of retirement systems and social security has taken place, the retirement coverage allowances received by our members compare favorably with those received by the general population. In spite of this fact, the experience of our retired members indicates that they are having considerable difficulty in paying for adequate health coverage, and have suffered great hardships as a


result of costly medical bills. Our union is not only aware of the hardship among our own members but we find ourselves in a unique position to understand the problems of the aged generally. We have thousands of our members who are social caseworkers or employees in hospitals, institutions, and homes for the aged, and they have firsthand knowledge of the problems of retired workers and their families. From my discussions with these members, one of the foremost problems is adequate health care for the aged.

I do not believe anyone can dispute the difficulties and hardships that persons over age 65 experience in trying to provide adequate health coverage for themselves and their dependents. There are in this country today approximately 15 million people of 65 years or older, 60 percent of whom have incomes of less than $1,000 a year and approximately half of whom have financial assets of $500 or less. Only a minority have voluntary health insurance and most of such coverage is inadequate, and will only meet a small part of their medical bills. Persons in this 65-year age group actually require twice as much hospital care as younger people. Thus, these people find themselves in a high risk, high cost group, with inadequate resources to pay their surgical and hospital costs. Adequate coverage by private insurance is not possible since premiums fairly computed will be higher than most aged people can afford.

It is true that some commercial insurance companies have recently established health insurance coverage for older people. Despite favorable publicity, careful analysis shows the impossibility of providing adequate health insurance for the aged by private means. Let us look for a moment at the plan which has received the most favorable response. It includes

(a) $10 per day maximum for hospital benefits;
(b) Maximum of 31 days in the hospital;
(c) maximum of $100 for hospital extras;
(d) payments for surgery limited to not more than $200;

(e) No coverage for skilled nursing home care, home nursing, or any nonsurgical medical care;

(f) Six months' exclusion of preexisting conditions. These benefits are to be provided for a premium of $6.50 per month per person. It is obvious that such policies will cover only a small portion of the total medical care costs today. Special note should be made of the exclusion of preexisting conditions as few people reach age 65 without some prior ailments. There is certainly no guarantee that the rate for this inadequate coverage will not be raised for the overall group. Medical cost is the fastest rising item of all the major components comprising the cost-of-living index. There is every indication that this trend will continue and even accelerate. Thus, it should be obvious that the cost of health insurance will rise at a faster rate than retirement allowances and will require an increased percentage of total retirement income.

The average old-age and survivors insurance primary benefit, even now, is only slightly over $70 per month. The premium of the previously described plan, $6.50 per person per month, amounts to about 9 percent of such income. This is equivalent to $36 on a $400 income. Nine percent is the most favorable percentage comparison which can be made for this average benefit. As I stated before, there are other

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