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One, it provides for an advisory council to be consulted in the development of regulations, such as are required by the act, and on this members of the medical profession should sit, hospital administrators should sit, and people who represent the consumers of hospital services should sit.
It also permits the Secretary to make use of voluntary nonprofit organizations in the administration.
The existing machinery of Blue Cross could be very well integrated into the administration of this whole program and we believe that their vast body of experience and their trained core of skilled workers should be utilized to the utmost in the administration of this program.
If I have just a moment before I close, I would like to speak of a letter which we received recently from a doctor friend. In fact, we received several copies. It is called a legislative alert and I think it may explain to you gentlemen some of the mail that you are now getting. It was sent by Dr. Louis M. Orr, president of the American Medical Association, and I am informed that it was sent to every doctor in the United States. It is called the legislative alert, and it encourages, and in fact it encourages in the strongest way, let us say, every doctor to write his Congressman, write the members of this committee, especially the chairman, telling them of their opposition to this "dangerous and gravely harmful precedent.
They don't say in this letter what is wrong with the Forand bill, and I want to comment on that for a little bit.
I am just telling you now why you may have received some of this mail. They don't say what is wrong with it, but they do say that if this bill is passed, then it would be the first step to the Federal Government running medicine, the Federal Government operating the hospitals, and, above all else, the danger of national health insurance.
In other words, it isn't just this bill that is wrong, but what it is going to lead to. A causes B, and B causes C, and on down to G, and when you get to X, the king's whiskers are going to be cut off or some horrible calamity. And the doctors are put on the alert.
But the interesting thing is this: This letter, dated July 7, calls for immediate action, and it says to be effective your letters must be sent in immediately. Action is vital now.
Then they go on to say in the July 13 issue of the News of the American Medical Association the reasons for opposing the Forand bill will be provided you.
In other words, doctors, proceed with the treatment. Go ahead with the operation. The diagnosis will follow later. (Letter referred to follows:)
AMERICAN MEDICAL ASSOCIATION,
Chicago, Ill., July 7, 1959.
LEGISLATIVE ALERT DEAR DOCTOR : U.S. Representative Wilbur Mills, chairman of the House Ways and Means Committee, has announced that the committee will conduct hearings on the Forand bill, H.R. 4700, beginning July 13. These hearings are scheduled to continue for 5 days.
As you know, this legislation would establish a dangerous and gravely harmful precedent that would undermine the patient-physician relationship and would open the doors to the eventual socialization of medicine. Under this legislation, some 16 million persons eligible for social security payments would be entitled to receive hospital, surgical, and nursing home treatment under a
program run by the Federal Government. Should this bill become law, its proponents would then undertake an allout drive to extend compulsory national health insurance to all segments of the population.
Consequently, it is urgent that you contact your Congressman immediately, asking that he register your opposition to the Forand bill with the members of the House Ways and Means Committee. Please ask him to urge the committee to oppose this bill.
To be effective, this must be done immediately. Action is vital in he next 2 weeks.
Please write, wire, or telephone your Congressman now, and urge your friends to write also. In any written communication either letter or telegramplease send a copy to Congressman Mills.
A description of this bill and detailed reasons why it would be harmful to the Nation and to the practice of good medicine will be contained in the AMA News dated July 13.
It is our responsibility to speak out now, the sooner the better. This is essential if we are to continue the sustained and heartening progress that we are making toward our fundamental goal: The best possible health care for every American, emphatically including the older citizen. Sincerely,
LOUIS M. ORR, M.D.,
President, American Medical Association. The CHAIRMAN. Mr. Cruikshank, you have consumed your 45 minutes.
Mr. CRUIKSHANK. My 45 minutes are up?
Mr. CRUIKSHANK. I will end on that note with just a word by saying that we are glad that the members of the American Medical Association don't practice medicine like that.
Thank you very much, Mr. Chairman.
Could we also add to the record the full resolution of the AFL-CIO Second Constitutional Convention in support of this and a statement adopted by the executive council on February 19 of this year, summary of the bill as we analyze that?
The CHAIRMAN. Without objection, that will be included at this point in the record.
Mr. CRUIKSHANK. Thank you.
RESOLUTION No. 85-OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE Adopted December 1957 by the Second Constitutional Convention of the Ameri
can Federation of Labor and Congress of Industrial Organizations Labor's legislative accomplishments are reflected in the monthly benefits being received under old-age, survivors, and disability insurance by 11 million people. The program continues to be soundly financed and economically administered, paying benefits related to earnings as a matter of right from trust funds built up through specified contributions.
Increases in monthly benefit amounts are badly needed to offset higher living costs and permit more adequate levels of living. A new program is required to meet the costs of medical services which weigh very heavily on the aged and on widows with young children, groups who are least able to obtain protection against these hazards through private insurance. After the AFL-CIO Executive Council had urged that legislation to meet these most urgent needs be given priority by Congress, a bill for this purpose, H.R. 9467, was introduced by Congressman Aime J. Forand of Rhode Island. The Forand bill would, among other things
1. Increase all primary monthly benefits by 10 percent on the average, giving present beneficiaries $5 to $10 more.
2. Liberalize ceilings on total family benefits.
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 nu ing 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 detinition 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.
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.