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BARRIERS TO HEALTH CARE FOR OLDER AMERICANS

TUESDAY, MARCH 12, 1974

U.S. SENATE,

SUBCOMMITTEE ON HEALTH OF THE ELDERLY OF THE

SPECIAL COMMITTEE ON AGING,
Washington, D.C.

The subcommittee met, pursuant to notice, at 10 a.m., in room 5110, Dirksen Office Building, Hon. Edmund S. Muskie, chairman, presiding.

Present: Senators Muskie, Hartke, Chiles, Fong, and Pell.

Also present: William E. Oriol, staff director; Elizabeth Heidbreder, professional staff member; John Guy Miller, minority staff director; Margaret Fayé, minority professional staff member; Patricia Oriol, chief clerk; Gerald Strickler, printing assistant; Joan Merrigan, clerk; and Dorothy McCamman and Herman Brotman, consultants.

OPENING STATEMENT BY SENATOR EDMUND S. MUSKIE,

CHAIRMAN

Senator MUSKIE. The subcommittee will be in order.

This hearing continues the inquiry of the subcommittee into barriers to health care for older Americans, a series we began 1 year ago this month with hearings on the administration's Medicare cutback proposal, and have continued in other hearings last year in Washington and around the country.

Today and tomorrow we will hear testimony on the administration's national health insurance proposal-the comprehensive health insurance plan. Before we hear from our witnesses today, I would like to make some brief points about national health insurance and the elderly.

First, I note with pleasure that every concerned group in the Nation has recognized the need for enacting a program of national health insurance. The defects of our health care system, for all citizens, are so severe that they can only be solved by a nationwide plan which insures every American access to sound health care. The public, health professionals, the administration, and Congress all agree that national health insurance is a top priority for America.

Second, I would like to note that agreeing on an adequate national health insurance plan will be a difficult and complicated process. Cooperation and a willingness to reason, by all parties involved, will be essential for the process to be successful. I am gratified that the administration has exhibited the necessary spirit of cooperation. I hope it

continues.

Third, I believe it critical for us to keep in mind, as we consider the various national health insurance plans which have been proposed, that they must be judged by their effectiveness in dealing with the entire range of problems which beset health care in America. The health care needs of the elderly, with whom this subcommittee is primarily concerned, and of all other groups in America, will only be satisfied when we insure that benefits are adequate to cover individual health needs; that health costs are financed equitably; that costs are kept under control; and that all the health services our people need are actually available to all our citizens, regardless of geographic location or economic status, in well-planned, rational, institutional, and organizational form.

We cannot immediately legislate the total reform of our health system which should be our ultimate goal. But we should keep that ideal goal in mind, and aim to achieve it in the near future.

The fourth and final point I wish to make goes to the immediate concern of these hearings: The effect on the elderly of the administration's health insurance proposal. In our consideration of national health insurance, we must hold firm to a basic premise that we will not accept cutbacks in health care for the elderly.

Regretfully, examination of the administration's proposal reveals that it violates this standard. The administration's proposal on balance would actually lessen the health care coverage which our elderly now receive under Medicare. These cutbacks come in the form of new deductible and coinsurance charges which would force the elderly to pay more out-of-pocket costs for health care now covered by Medicare.

CHART 1.

MEDICAL CARE BILL PER AGED PERSON AND
PROPORTION COVERED BY MEDICARE, FY 1966-1973

$1200

1

[graphic]

1000

800

1969 1970
FISCAL YEARS

Source: Social Security Administration

The administration's proposal does include some improvements for the elderly-proposed coverage of outpatient drugs, improved mental health coverage, and catastrophic coverage. But the cutbacks included in the plan make it inadequate to meet the health needs of older Americans.

To set the framework for our examination of the administration's health insurance plan as it affects the elderly, I had charts prepared to analyze the new administration proposals, and I turn to them now. Chart 1 illustrates how the total per capita medical bill for the aged has mounted since the beginning of Medicare while there has been a downward trend in the proportion that is paid by Medicare in recent years. The proportion that is covered by Medicare hit a peak of 45.5 percent in 1969; by 1973 this had dropped to 40.3 percent.

I might add that this slide downward to 40 percent is new information. It has just been acknowledged by the Department of Health, Education, and Welfare.

In other words, the Medicare program now covers only two-fifths of the health care costs of the aged. The amount not covered-$620 per person per year-is substantially more than the average per person bill of $445 in fiscal year 1966, before Medicare was in effect. Medicare beneficiaries write us letter after letter of the burden of these increased medical costs, and asking how they can hope to pay medical bills even with increases in Social Security benefits. So, even as it exists today, Medicare needs to be improved.

Turning to chart 2, this gives some information on what kinds of health costs the elderly incur. The chart shows that more money is spent on hospital care for the aged than any other type of health care. Of the total expenditure of more than $22 billion for the elderly in

CHART 2.

AMOUNT OF HEALTH CARE EXPENDITURES FOR THE AGED, BY TYPE, AND PROPORTION COVERED BY MEDICARE,

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3.8%

Source: Social Security Administration

1973, $10.9 billion was spent on hospital care. Physicians' services were next with almost $4 billion followed by a total of $3.2 billion for nursing home care.

When we look at the proportion of each service which was covered by Medicare, we see that hospitalization was 60.9 percent covered and physicians' services 52.8 percent covered.

Nursing home care, which was the third largest expenditure, had only a miniscule 6.5 percent covered by Medicare. By far the biggest share of Federal support for long-term care is provided by Medicaid. The bars on the chart which do not have any cross-hatching are those services which are not covered at all by Medicare. They are dentists' services, prescription drugs, eyeglasses, and appliances. Of these three services, the biggest expenditure by the elderly was more than $2 billion for prescription drugs. Alternatives to institutionalization such as home care are not even listed separately, but are included in the "other" professional services of which Medicare pays only 25 percent.

So this chart illustrates two points. First, that hospital care has a dominant role in the health care delivery system for the aged-and that dominance must be taken into account when we consider changing Medicare. Second, the chart shows how Medicare must be expanded-into areas like home health, nursing home care and drugsto cover adequately the elderly's health expenses.

Turning to chart 3, it shows how out-of-pocket charges have increased since Medicare was started. Hospital insurance deductible and coinsurance charges have risen 110 percent, and the monthly premium charge under part B medical insurance has risen 123 percent.

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