APPENDIX III

THE OKLAHOMA STATE MEDICAL ASSOCIATION,
Oklahoma City, August 1, 1961.

Hon. WILBUR MILLS,

Chairman, House Ways and Means Committee,
House Office Building, Washington, D.C.

DEAR MR. CHAIRMAN: The Oklahoma State Medical Association appreciates the opportunity to introduce this written testimony into the permanent record of the public hearings being held on H.R. 4222 (the Health Insurance Benefits Act of 1961).

At the outset, may it be clearly established that the members of our voluntary professional society of over 1,700 doctors of medicine are firmly and unitedly opposed to this legislation. Our collective attitude toward this bill is not an arbitrary one; we oppose H.R. 4222 as a matter of principle, and as a matter of fact.

H.R. 4222 is purely and simply the beginning of socialized medicine in the United States. It will socialize hospital, nursing-home, and medical care for a segment of the population, and more importantly, it provides the framework for rapid expansion to cover Americans of all ages. Many of its supporters including the Socialist Party, are predicting and advocating such a course of events.

Thus, if Congress enacts H.R. 4222, American medicine will be taking a backward step from its present role of world leadership in health care. The experience of other countries which have adopted compulsory health care ranges from poor to unimpressive, and it would be tragic for the United States to scuttle a superior system in favor of a lesser one.

Aside from the ill-advised principle involved, no proven need for H.R. 4222 has been shown. On the contrary, the Kerr-Mills law is meeting the need of the indigent elderly much more effectively and economically than would the bill under consideration. Kerr-Mills embodies the principle of local responsibility and control; and it is designed to help those who need help.

Kerr-Mills programs are being implemented at a rapid rate by State governments and, if given the opportunity of a fair trial, will soon result in a nationwide | network of health-care programs for old-age-assistance (welfare) recipients and medical-assistance-for-the-aged (near needy) recipients.

Our experience in Oklahoma with the Kerr-Mills law has been most heartening. The table below summarizes this experience since October 1960 when our department of public welfare implemented the MAA program and expanded benefits to OAA recipients.

Table of experience, OAA and MAA programs, from November 1960 through June 1961

These figures are even more significant when it is realized that about 50 per cent of the State's over-65 population is covered by the OAA and MAA programs. Moreover, nearly a third of Oklahoma's over-65 people have coverage through voluntary health insurance plans. Stil more are qualified to receive help through other health care programs, or are financially independent. Oklahoma medicine considered it a privilege last year to contribute over $7 million in health care services for those unable to pay.

Therefore, through a variety of means, Oklahoma's senior citizens are now able to receive high-quality health care, when and where they need it. To preempt a proven, flexible system with H.R. 4222 would be a costly misadventure.

The adoption of the compulsory health care principle would not only de teriorate the quality of health care in the United States, but it would also mark the beginning of the end for the health insurance industry, and destroy

the initiative of individual citizens and local governments who are now rising to meet the challenge of aging through local means.

Among the voluntary projects underway in Oklahoma is a permanent commission on aging, now in its formative stages. Another project, indicative of a responsive public, is a multimillion-dollar senior citizens village, soon to be constructed in Oklahoma City. In addition, cities throughout the State have created special committees for the purpose of adding comfort and meaning to the lives of the elderly.

These programs will wither before they bloom if the Federal Government tries to assume complete jurisdiction of the aged through further taxation.

Let us keep in mind, Mr. Chairman, that heavy Federal taxation has already thwarted the potential of local governments to take care of their own. Furthermore, promiscuous Government spending and the resultant inflation, have thwarted the ability of our old folks to take care of themselves. At best, H.R. 4222 would not even be a short-term panacea.

Your committee is urged to join the physicians of Oklahoma (and the many others) who oppose this dangerous legislative proposal. H.R. 4222 would unnecessarily drain another $12 to $15 million annually from the pockets of Oklahoma taxpayers, to ostensibly fill a need already being met. It would nurture Federal dependency and public apathy at a time when enthusiasm for local action is running high.

The American people have been regimented enough under the guise of social legislation.

Sincerely yours,

THOMAS C. POINTS, M.D.,

Chairman, Federal Legislative Committee.

STATEMENT OF THE SOUTH CAROLINA MEDICAL ASSOCIATION BY DR. JOSEPH P. CAIN, JR., MULLINS, S.C., IMMEDIATE PAST PRESIDENT

The purpose of this statement is

(1) to publicly reaffirm the continued interest and concern of the South Carolina Medical Association with the problems of adequate medical care for our senior citizens;

(2) to show that the King-Anderson bill is inadequate to solve the problem of medical care for the aged;

(3) to point out what steps have already been taken in the State of South Carolina to care for this problem; and

(4) to show that such legislation as the King-Anderson bill is entirely unnecessary in solving the problem in South Carolina.

In preparing this statement we have attempted to summarize the feelings of the members of the South Carolina Medical Association concerning the problems of health care for the aged from firsthand knowledge and experience in treating these people in our local communities. In order to clarify and emphasize these impressions we have used facts from several sources which we consider to be authentic and definitely pertinent to the question at hand. Data pertaining to social security was obtained through the district office, Social Security Administration, Florence, S.C.

Information concerning Blue Shield contracts was secured directly from the South Carolina medical and hospital care plans, Columbia, S.C.

Information concerning commercial insurance was obtained from the Health Insurance Institute, 488 Madison Avenue, New York, N.Y.

Figures pertaining to the welfare rolls were obtained directly from the department of public welfare, Columbia, S.C.

Much of the general information has been taken from a report by our State legislative committee on aging, which was published in 1960 after a year of intensive study of this problem in each county in our State.

The basic philosophy for care of the aging in our State is indicated in this special report as follows:

The finances necessary to the care of the aging should be met as far as possible; first by

(a) the individual; then by

(b) his family;

(c) the local community, including church and county;

(d) State government; and

(e) Federal aid, given only when absolutely necessary and when othe means are not available, and in the form of matching grants to the State : be administered through already existing agencies.

In this philosophy we wholeheartedly concur.

All persons over 65 fall into one of the following categories:

(1) Those covered by OASDI-who may or may not have additional income This is the group that would be affected by the King-Anderson bill, and only 43 percent of the aged in our State are in this category.

(2) Those who are unable to care for themselves at all and are on the welfare rolls of the State. There are 34,000 of these, of whom only 2,200 are covered by OASDI. About 20 percent of our aged are in this group.

(3) Those who have a modest income and/or own some small piece of property and are able to support themselves until some catastrophic illness comes along. As a group-those who have an income of less than $1,000 per year who may or may not be covered by OASDI; 54 percent of our aged citizens are in this group.

(4) Those who are financially independent or who are well cared for by their families or from some other means-who may or may not be covered under OASDI 20 percent are in this category.

The King-Anderson bill would apply to the first group. In South Carolina only 65,407 people over 65 are drawing OASDI benefits, as of February 1961 This represents less than 43 percent of the approximate 150,600 citizens in our State over 65. From this standpoint alone, it would seem ridiculous and unfairi to spend millions of dollars on a program which would leave 57 percent of our aged not protected.

Many of our people covered by social security are financially independent and do not need or want additional assistance. Even for those who do need and want assistance this care would not be adequate.

(1) The bill proposes to give no medical care whatsoever.

(2) The hospital care program is unrealistic-inasmuch as it is, in effect, a $10 deductible each day for 9 days, with a minimum of $20, increasing to a maximum of $90.

This is not relief-this deductible is more than many of our people have to spend.

It has been very difficult to estimate the true cost of any program which gives service benefits other than cash (as evidenced by the original estimates on medicare concerning which, as participants, we have firsthand knowledge). In our own Blue Cross-Blue Shield plans, unrestricted hospitalization and medical care skyrockets the cost. For this reason, we favor any deductible clause as good ¦ business; however, it is not relief to the needy aged which this program proposes i o to be.

Even if the bill were amended so as to leave off the deductible and include medical care, it still would only serve its purpose for the minority we now have on social security, and for many of those it would not be the "bread of life," but pure "gravy.”

Any program designed to increase social security benefits must carry with it an increase in taxes. Since those already over 65 and drawing OASDI benefits would not pay anything for their benefits under this program, this would mean more taxes for the others still paying on social security in order to care for them.

From these points, it should be clear that the King-Anderson bill is an attempt to extend the benefits of OASDI and only that. It should not be confused in any way with a solution to the problem of medical care for the aged. In this regard it is totally inadequate.

Next, I would like to show what has been done in South Carolina in order to help with this problem:

(1) At the present time, 11,000 persons over 65 are enrolled in the regular Blue Cross-Blue Shield plans in our State.

(2) Blue Cross-Blue Shield in South Carolina is now offering in addition a 1 comprehensive hospital and medical care plan for persons over 65 who desire it. The rate for this contract including both hospital and medical care is $9 per month per person. This includes medical care as well as surgical care and provides a free choice of physician and hospital without restrictions, except for $50 deductible for each illness-regardless of number of admissions. Those who have so far availed themselves of this coverage number 2,091.

In order that this program could be offered to the people at a reasonable rate, the physicians of South Carolina have reduced their fees collected under Blue

3

Shield to approximately two-thirds of those which they collect under the ordinary service contract.

(3) In addition to this contract, the South Carolina medical care plan is also offering a prolonged illness contract for groups of 25 or more. The cost of this is approximately $2.25 per family per month, and it materially extends the benefits of the basic Blue Cross-Blue Shield contract.

(4) Approximately 59,000 other persons over 65 are insured with commercial companies operating in our State-making the total covered by insurance over 48 percent.

(5) The State of South Carolina already has a fund to pay for hospital services in full for those on OAA rolls of the State-as of May 1961, 34,000 people over 65 fall into this category-only 2,200 of these are covered by OASDI. (6) Other funds already in existence such as those provided by the State cancer fund, the heart fund, veterans' hospital facilities, etc., help materially in these specific fields.

(7) Recently our State passed legislation implementing the Kerr-Mills law in South Carolina. This will provide for individuals over 65 years of age, who have incomes of $1,000 per year or less, or of $1,800 per couple, 90 days hospitalization per year, and 120 days nursing home care, and outpatient diagnostic service. This law went into effect July 1, 1961. Fifty thousand citizens fall into this group, in addition to those already on OAA.

Recapitulating, we believe that the King-Anderson type bills are not necessary to solve the problem of medical care of the aged in South Carolina :

Those over 65 who have adequate means can pay for medical care or buy insurance as they choose.

Those with limited income can budget for hospital and medical care at a cost of $2.50 per week under Blue Cross-Blue Shield. Those in this group whose income is $1,000 per year or less, will be eligible for hospitalization under the recently implemented Kerr-Mills formula.

Those on the welfare rolls already have adequate funds available for hospitalization and no physician would think of charging these bona fide unfortunates.

As for the 43 percent who will be benefited by the King-Anderson bill whether they need it or not, we believe they should be rightfully allowed to avail themselves of the insurance which has been offered by American free enterprise if they desire it.

A list of insurance companies now offering policies to those persons over age 65, along with the benefits and cost, is attached herewith.

Most of this has been accomplished during the past 3 years. Committees of the South Carolina Medical Association, Dental Association, Hospital, and Nursing Home Associations continue to study ways and means of solving these and other problems connected with the care of the aged, of which medical and hospital care is only a small part. Already quoted is the comprehensive report on our aged citizens, prepared by a special legislative committee. The State of South Carolina now has the benefit of this report of the study of all the various aspects of geriatrics, which makes many recommendations to be considered by our legislature. Also, the South Carolina State Council on Care of the Aging has been organized and brings together the best thinking of all interested groups.

Free enterprise, with the cooperation of our local and State governments in implementing the Kerr-Mills formula, apparently has solved the problem in South Carolina.

The King-Anderson bill is neither adequate nor necessary.