the most intolerable situations of our time-the plight of our senior citizens who have extremely limited financial resources and are in need of costly medical services. I commend their efforts and their good intentions.

The significant features of Senator Javits' plan are these. First, it would utilize the social security system for financing hospital and nursing home care, but it would depend upon new, voluntary associations to administer the hospital program, with no assurance that competent voluntary organizations would ever arise.

Second, it attempts to go beyond the problem dealt with in the King-Anderson bill and seeks a solution to the equally important problem of financing medical services for our senior citizens. Senator Javits' answer to this problem is to utilize a nationwide consortium, or cartel of insurance companies, with exemptions from the antitrust laws and from certain taxes, in the hope that these exemptions will induce the insurance companies to fix a rate for medical insurance that is within the means of most of the aged.

In a nutshell, Senator Javits' bill substracts a great deal from the administration bill in the field of hospital and nursing home care, and it really does not come to grips with the great disparity between the cost of medical services and medical insurance and the means of most of our older citizens to pay for them.

It has been frequently said that the longest journey must begin with a first step. Manifestly, Mr. Chairman, if the King-Anderson bill is enacted promptly, our journey will begin with a giant step. So let us move with dispatch to pass this bill, in order that at least provision will be made for paying the hospital bills where major medical disasters strike.

The Congress can, and I believe will, then move on to the next step, which is to raise the incomes of our impoverished elder citizens. This is the way to make it possible for our senior citizens to pay the doctors, to have private medical insurance, and to have a sufficiency of the other services and goods one must have if he is to spend his declining years in some comfort and dignity.

To encourage committee attention to this important facet of the problem, I have introduced two bills during this 88th Congress which would have an immediate mitigating effect in this area. H.R. 8826, introduced last fall, would produce the most far-reaching result by raising pensions under the Social Security Act to provide an income equal to the minimum wage, on a 40-hour week basis. At the present minimum wage, this would provide a minimum monthly income of $216.50 for all qualified retired persons at the age of 62, for the blind, and for the totally and permanently disabled.

H.R. 4328, introduced shortly after the beginning of the first session, would provide a 20-percent across-the-board increase in benefits, would reduce from 72 to 70 the age at which deductions cease to be made from benefits on account of outside earnings, and would further provide for Federal Government participation in additional contributions. Please permit me to urge your consideration of these bills at the earliest opportunity.

President Johnson has made a magnificent declaration of war on poverty in the United States. Certainly in this kind of war the first and foremost attack must be made where we know the greatest concentration of the enemy to be poverty among the aged.

In the Economic Report of the President, just released, the Council of Economic Advisers has given us a superb description of the anatomy of poverty. As the report shows, poverty has many faces. It is found among the poorly educated, among our nonwhite citizens, among the city slums and the rural slums north, east, south, and west.

But most of all, poverty is a disease of the aged. Fully one-third of all the poor families in the country are those whose family heads are 65 or older. These number some 3,200,000 families having money incomes of less than $3,000 a year. Another 2,790,000 persons 65 or over who live without family, but not in institutions, have money incomes of les than $1,500 a year. What a tragedyin a Nation with so much idle productive capacity and so many unemployed.

Using the definition of poverty adopted in the President's report, my computations show that it would take an average of only $1,190 per family-or a total of $3.8 billion-to raise the incomes of these families up to $3,000 per year; and it would take an average of only $604—a total of $1.6 billion—to raise the money incomes of these unrelated individuals up to $1,500 per year. In other words, a total cost of $5.4 billion a year to eliminate poverty among our citizens 65 years old and over. Looked at realistically in terms of our productive capacity and our problem of consuming what we can produce, this is indeed a small price

to pay; and it is a price which would set in motion forces that would be beneficial to the whole country.

The President's report tells us that the Nation's output of goods and services would be increased by $30 billion a year if unemployment were only reduced to a rate of 4 percent, instead of the present rate of 5.6 percent of the labor force. The report also tells us that only $11 billion would be needed to raise every family in America up to a level of living of at least $3,000 a year.

I have no doubt that the battle plans for the war against poverty must, as has been suggested, call for action on many fronts. To give the young and the middle-aged a fair opportunity for productive work in the age of automation, we must have better education, better health, less discrimination against the minorities, better work in retraining, and several other courses of human improvement.

But it does seem to me that we should act promptly to raise old-age pensions to provide an income at least equal to the minimum wage, on a 40-hour week basis. This will permit our senior citizens to live with a modicum of dignity and freedom from fear.

It is very sad to realize, Mr. Chairman, that the prospect of further automation and the prospect of peace are both widely regarded as threats to the stability and workability of our economy. It is thought, and with some reason, that a reduction of Federal spending for armaments will cause a shrinkage of jobs, and so, too, will the further adoption of laborsaving devices.

Yet in truth what we are threatened with is an opportunity for peace and plenty, a condition that previous societies have dreamed of from the beginning of time. Let us seize this opportunity. And let us begin by making it possible for our impoverished older citizens to better share in the plenty that threatens to overwhelm us.

CONGRESS OF THE UNITED STATES,

HOUSE OF REPRESENTATIVES, Washington, D.C., November 22, 1963.

Hon. WILBUR D. MILLS,

Chairman, Ways and Means Committee,

House of Representatives,

Washington, D.C.

DEAR MR. CHAIRMAN: I am enclosing a statement for the record in support of the proposed legislation for hospital insurance for the aged.

I appreciate the opportunity of having my statement included in the record of these hearings.

With best wishes, I am,

Sincerely yours,

NEIL STAEBLER, Member of Congress.

I appreciate the opportunity to include in the record of these most important hearings a statement in support of the proposed legislation.

During my campaign for election to Congress, I made medicare, or more properly, hospital insurance for the aged, one of my three major campaign issues. I made more than a thousand speeches on this subject, and I can say virtually without exception that the health insurance program financed under social security is not only needed but fully supported by the senior citizens in my State. The health insurance for the aged program, which would be financed from our earnings during our working years, is not new; it has been discussed, debated, and analyzed bit by bit in every part of the country for many years. It is my belief that the American people have indicated by their election of so many public officials who are pledged to medicare that they want action in Congress at the earliest possible time.

In discussing this program, I always have emphasized that it has nothing to do with the payment of doctors' bills; it would only help pay for hospital bills and related expenses such as drugs. It is worth noting that the United States is the only major industrial nation in the civilized world that does not provide a program of prepaid hospital insurance for its older citizens.

In the United States today, 18 million of our citizens are over 65. In Michigan, 670,000 of our people are over 65.

All of us, I am sure, can cite incidents where just one serious illness has completely wiped out the financial resources of an elderly person.

I think it's obvious that this matter will become even more serious as life expectancy increases and hospital costs go up.

The question we face, then, is how can our older people meet these necessary expenses?

Should their children take up this burden? Should we leave it to charity? Can private insurance plans do the job? Or is there another way?

I don't think children, charity, or private business-alone or together-can do the job. They can and should help, of course.

But the basic job ought to be done on a universal basis through a social security prepayment plan.

This is the program recommended by President Kennedy and the Democratic Party. This is the program which is the bill now before this committee.

At the present time, we are trying the charity approach, which I believe is a proper description of the Kerr-Mills medical assistance law which was passed 3 years ago by the Congress. This program, it has been demonstrated, just does not work satisfactorily.

I cite the recent report of Senator Pat McNamara's Subcommittee on Aging which reveals the gross inadequacy of the Kerr-Mills program. Senator McNamara's subcommittee pointed out that the Kerr-Mills program is not national in scope; its benefits are skimpy or inadequate; a few States have been getting the lion's share of the funds available; administrative costs are high; and the program has humiliating requirements which virtually force our older people to take a pauper's oath before they can receive help.

Michigan was the first State in the Nation to qualify under the Kerr-Mills program. Yet, last year, only 13,583 of our senior citizens qualified for health care assistance under this program. We need a better program which will help not only these 13,583 persons but the remaining 656,000 persons in Michigan and the millions of persons across the country who are desperately in need of health

care.

It has been suggested by some that we can help our aged by extending the Blue Cross program or other similar private insurance plans.

The trouble with Blue Cross or other private insurance is twofold. It lies in the increasing longevity of people and the increasing costs of hospitalization. The very same thing that is helping life insurance companies-decreasing actuarial risks-works against Blue Cross. It increases the risk for Blue Cross. Hospital care comprises about three-quarters of the medical care of the elderly. The alternative to private insurance, then, is the social security approachthe principle of paying for our hospital insurance during our working years. Notice that this distributes the risk over the entire population. Not everybody will have a big hospital bill when they are elderly, but everyone will share in the cost of the insurance about 25 cents a week.

The real objection to hospital insurance or medicare comes from those who fear that it will destroy either the medical profession or the insurance business. Neither Congress nor people will allow this to happen.

In my view-the challenge of health care for our senior citizens can be met only by the broad approach of a social security program. This is a program that preserves the self-respect of the individual concerned, by providing him with benefits he has already paid for and is entitled to receive.

I urge the committee to take favorable action on this bill so that it may come before the House as soon as possible.

CONGRESS OF THE UNITED STATES,

HOUSE OF REPRESENTATIVES, Washington, D.C., November 21, 1963.

Hon. WILBUR D. MILLS,

Chairman, House Committee on Ways and Means, 1102 Longworth Office Building,

Washington, D.C.

DEAR MR. CHAIRMAN: Although I was unable to appear personally to testify before your committee during the hearings this week on medical care for the aged, I would like to submit a written statement.

I hope you will call this to the attention of the members of the committee.

Sincerely,

HENRY S. REUSS, Member of Congress.

STATEMENT OF REPRESENTATIVE HENRY S. REUSS, OF WISCONSIN, TO THE WAYS AND MEANS COMMITTEE OF THE HOUSE OF REPRESENTATIVES, NOVEMBER, 19, 1963

Mr. Chairman, I appreciate the opportunity to present a brief statement to this committee.

I want to call to the committee's attention a case which illustrates clearly the acute need for an adequate national system of medical insurance for the elderly. This case occurred recently in my own district in Milwaukee. There on April 4 of this year, Peter Schultz, 67, of 1712 North Prospect Street, became ill and entered the hospital. Despite doctors' efforts to save him through a heart operation he was dead within less than a day.

Mr. Schultz, who had worked hard all his life as a salesman, left only a small sum to his widow. Mrs. Schultz, who is 66, was also left with $1,737.15 in medical and hospital bills for the services to her husband during his last day. Peter Schultz had tried and failed to obtain medical insurance from three private companies.

Despite the efforts of friends to reduce the charge for blood by contributions to the Milwaukee Blood Bank, Mrs. Schultz still faces a backbreaking debt. Although this case is striking, it is by no means unique. The great majority of our elderly citizens are in economic circumstances that leave them as vulnerable as the Schultzes.

The cost of modern medical wonders is high. The elderly need medical care more often and for longer periods than our younger citizens. The average income of aged persons in this affluent country is not much more than $1,000 per year. Yet it is our obligation as a civilized country to assure that our aged citizens can have the advantages of modern medicine without impoverishing themselves or their families. This obligation is accentuated by the fact that the proportion of elderly persons in the population is increasing.

Only a program with uniform national benefits financed by the Federal Government through the social security system can meet the need. Such a program would build upon a solid foundation. Under a national program, an aged person in my State of Wisconsin, where there is no operating medicare program at this time; in Kentucky, where benefits under a Kerr-Mills program are very severely restricted; or in Massachusetts, where somewhat more liberal benefits under Kerr-Mills are provided, will have the same right to insured assistance in his medical costs.

The benefits provided under the program should extend at a minimum to hospital services, nursing home care, and outpatient hospital diagnostic care.

I hope that this Congress will so respond to the need of our aged citizens that instead of lagging behind the other developed countries of the free world we will set a standard in the care of our aged citizens.

CONGRESS OF THE UNITED STATES,

HOUSE OF REPRESENTATIVES, Washington, D.C. November 19, 1963.

Hon. WILBUR MILLS,

Chairman, House Ways and Means Committee,

House of Representatives,

Washington, D.C.

DEAR MR. CHAIRMAN: Enlosed is a statement I would like to have made a part of the record of hearings on the medicare proposal. Unfortunately, I have been detained in Chicago and cannot appear in person.

Your cooperation is as always greatly appreciated.
Sincerely yours,

ABRAHAM J. MULTER.

STATEMENT OF HON. ABRAHAM J. MULTER BEFORE THE HOUSE WAYS AND MEANS COMMITTEE IN SUPPORT OF H.R. 3920, NOVEMBER 19, 1963

Mr. Chairman, I very much appreciate the opportunity to testify in favor of H.R. 3920, the President's proposal to provide medical care for the aged through the social security system. I have introduced an identical bill, H.R. 9095, which is also before the committee.

During the last decade the number of older people in our country has increased by 5 million. Since the end of World War II hospital charges have gone up 400 percent from $9.50 a day in 1946 to $35 a day now. Our senior citizens cannot afford to pay this kind of money very long without going completely broke and destroying whatever assets they might have saved for their old-age retirement years.

Let us examine for a moment one of the alternatives to medicare, the old-age assistance program. In 1950 there were 2.8 million people receiving old-age assistance. Today there are 2.2 million, a drop of 600,000. This has been accomplished for a very simple reason: more and more people are eligible for social security when they reach the age of 65; seven out of eight are able to meet their day-to-day needs without old-age assistance. This is the best argument I know for socal security.

There is no reason why any citizen, in this the richest country in the world, should have to depend for his or her livelihood on a Government dole. Social security provides the means whereby the citizen can live out his senior years with dignity and self-respect.

Medical care provided through the social security system is merely a logical extension of this principle. Parenthetically it might be noted that those who oppose medicare do so because they say that it is part of a so-called welfare-state philosophy. If their opposition were to defeat this bill it would inevitably wipe out the decrease in the number of welfare recipients and in fact, increase it over and above 2.8 million mark of 1950. As our aged population increases, the percentage increases of those who cannot afford the heavy medical expenses of old age.

What we want to do and what we should do is keep these people off the welfare roles. What we need to do and what we should do is see that these people have the opportunity to provide for their own future medical needs through the social security system.

The American Medical Association has said "No" to medicare. What the AMA is further saying is "put the old people on relief."

There can be no doubt that the late distinguished Senator from Oklahoma, Mr. Kerr, and the distinguished chairman of this committee had nothing but the highest respect and regard for the needs and the well-being of those of our fellow citizens over 65 who cannot afford the high cost of being sick. Being responsive to this great concern the Congress, in 1960, adopted what is now called the Kerr-Mills program. After 3 years, however, it is all too evident that this program is not an adequate substitute for medicare. Only half of our States have joined this program and it has not worked well in those.

Frequently the range of assistance available does not include what the patient needs or else the facilities for providing the assistance are inadequate; the choice of a doctor or hospital may be nonexistent, the necessary care being available only in specific facilities or from specific doctors.

The argument has been offered that under the Kerr-Mills Act, the Federal Government's contribution is unlimited since it will match whatever the States provide. The simple fact is, however, that the States cannot match the Federal Government in this area; they just cannot provide enough funds to do the job. Of the 29 jurisdictions (including Guam, Puerto Rico, District of Columbia, and the Virgin Islands) which have adopted the Kerr-Mills approach, only 4— Hawaii, Massachusetts, New York, and North Dakota-can be said to have comprehensive programs. At the other end of the scale, we find five States with minimal programs, all the rest have what the Bureau terms intermediate plans. An aspect of Kerr-Mills operation which is certainly just as bad as the lack of comprehensiveness in the various State plans is the denial of dignity and self-respect to the aged citizens seeking assistance, by the imposition of a means test. Why should these people have to submit themselves to this procedure in order to receive adequate medical attention that they could have helped pay for themselves through the social security system?

Health insurance is not socialism; medicare is not socialism. Like private health insurance, it is merely a means of paying medical bills. It is nothing more and nothing less. I am proud to be a sponsor of this legislation and I strongly urge that this committee report H.R. 3920 to the House at the earliest possible time so that our senior citizens can receive the benefits of medicare with dignity and respect.

Thank you.