3 years of trial, as documented in numerous publications, can provide adequate benefits at cost low enough for most of the 18 million people past 65. Social security financed hospital insurance would provide a base for good, adequate health care for the aged. It would relieve the anxiety of seniors and their adult children alike. It would minimize the deprivation of youngsters whose parents currently must assume the staggering burden of cost of hospitaliaztion of their parents. We believe sincerely that the time tester social security system of financing hospital insurance for the aged will be good for patients, hospitals, physicians, and all the people of our Nation. Charles R. Kluman, M.D.; Louise E. Light, M.D.; Theresa Daniels, STATEMENT OF JACOB S. POTOFSKY, PRESIDENT OF THE AMALGAMATED CLOTHING WORKERS OF AMERICA, AFL-CIO, PRESENTED TO THE HOUSE WAYS AND MEANS COMMITTEE, IN SUPPORT OF THE ANDERSON-KING BILL Mr. Chairman and members of the committee, this statement is being made on behalf of the 400,000 members of the Amalgamated Clothing Workers of America, AFL-CIO, to ask your support of the Anderson-King bill. We of the Amalgamated believe that only this bill, based as it is on the fiscally sound social security principle, can meet the hospital care needs of our citizens in the 65-and-over age group. We know from our experience with our retired members in this age bracket that they have not enough income to meet necessary hospital costs. As a result, many times they hesitate to seek the hospital care they need either because they cannot afford it, or because they are determined not to become burdens on relatives already struggling with their own problems. The statistics show that the problems of our retirees mirror the problems of the aged in this country. According to figures compiled by the U.S. Department of Health, Education, and Welfare, two-person families with a head 65 years old or more have a combined average annual income of $2,530. Aged persons living alone average $1,050 yearly; and aged persons living with relatives average $500 yearly. Further, almost half of families with a head 65 or more have less than $1,000 in assets convertible to cash-if they have any assets at all. Clearly, the aged generally are not in a position to pay for the high cost of hospital care without suffering hardship. The aged stand at the bottom of the income ladder. Yet, according to the U.S. Department of Health, Education, and Welfare, they spend twice as much for medical care than other age groups. In addition, half of our aged couples, whether one or the other is hospitalized during a given year, spend $800 or approximately one-fourth of the average annual income for an aged couple. And the cost of hospital care is going up. It has risen, states the American Hospital Association, from $9.39 a day in 1946 to $34.98 in 1961; and the end is not in sight. These figures are especially ominous for the aged. For, after age 65, 9 of 10 persons are hospitalized at least once; and 2 of 3 are hospitalized 2 or more times. Their average hospital stay is almost 15 days, twice as long as other age groups. Private hospital insurance has not been able to meet the needs of the aged. Only about half of the aged can afford the private plans, which are severely limited in coverage. Here are just a few of those limitations: Most plans exclude preexisting conditions for at least 6 months; more than half have dollar limits on hospital room costs; only about half cover nursing home care or visiting nurse services. Moreover, only about half of those insured are covered for up to three-fourths of their hospital expenses. Recently, insurance companies have pooled their resources in New York, Massachusetts, and Connecticut to offer "Over 65" plans. These plans cover hospital care and major medical expenses at an average cost of well over $400 yearly for an aged couple. However, as noted consumer expert Sidney Margolius has pointed out, these "Over 65" plans have two major defects. First, the New York "Over 65" plan was set up to pay $18 daily for hospital room and board for only 31 days. But a study of hospitalization in the New York area found that the average hospital bill for the aged was $26-not $18— daily. This defect exists in the other plans. Second, and more serious, the "Over 65" plans offer a maximum of $150 for miscellaneous expenses. But the same New York survey found that the average miscellaneous charge for the aged was $240. We should like to emphasize at this point that we have been considering only hospital expenses. These expenses are obviously burdensome in relation to the incomes of the aged. However, when we consider that other medical expenses are involved in a hospital stay, we can easily see what the aged sick must contend with. In the opinion of our organization, it is evident that the cost of comprehensive hospital care is generally beyond the financial reach of our aged citizens. It is also our opinion that the present Kerr-Mills law, because of its very nature, cannot solve this problem. As of February of this year, fewer than 7 of every 1,000 aged were receiving any Kerr-Mills benefits. Further, the Kerr-Mills law is not yet a national program. Presently, it is operating in about 28 States and 3 territories. Even if Kerr-Mills were to become a national program, it could not make needed hospital care available to the aged. As we know, this program is designed to help only those who exhaust their resources and then pass a humiliating poverty test. The effect of these poverty tests has been graphically described by the U.S. Senate Special Committee on the Aging. I quote: "In most States the tests, apart from any degrading qualities, exclude from help many of the aged who are desperately in need of assistance. There are at least 15 States in which the means test would serve to eliminate even those people who qualify for relief in those States." Although the Federal Government pays 50 to 80 percent of the cost of the Kerr-Mills program, benefits vary widely from State to State. Availability of State tax revenue, among other factors, determines how much aid will be offered. As we know, West Virginia was forced to cut Kerr-Mills aid because it had trouble finding the tax money to finance the program. Indeed, as the New York State Department of Social Welfare has pointed out, medical care for the aged under Kerr-Mills is, and we quote, "a matter of geography rather than physiology." We emphasize, however, that we are not urging the repeal of Kerr-Mills. This law has its place-but that place is in addition to a hospital care program based on the social security principle. This much-needed program will become a reality if the Anderson-King bill is passed by Congress. Under Anderson-King, our citizens would be able to provide for their over-65 hospital expenses by contributing to the social security fund during their productive years. Under social security it would not be necessary, as it is under Kerr-Mills, to finance the program through general tax revenues. Gentlemen, the aged of this Nation are asking you for something straightforward and native to the American character. They ask that they be permitted to provide the funds for their own over-65 medical bills in the same way they provide for their retirement. They do not want what amounts to State charity. We respectfully urge you to heed their request. AMALGAMATED MEAT CUTTERS AND BUTCHER WORKMEN OF NORTH AMERICA, Hon. WILBUR MILLS, Chairman, Committee on Ways and Means, DEAR MR. CHAIRMAN: As the executive officers of the Amalgamated Meat Cutters and Butcher Workmen of North America (AFL-CIO), we would like to register our union's very strong support for H.R. 3920, the bill to provide hospital insurance for the aged through social security. In our opinion, this measure should be priority legislation for Congress during 1964. In fact, it is a matter of amazement to the members of our union that the Congress has so far failed to enact this bill, which is so vital to the welfare of a large segment of our population. The campaign against hospital insurance for the aged through social security, led by the American Medical Association and insurance companies, is difficult to comprehend. Conservative governments in other civilized countries have long put into effect such systems or even more far-reaching ones. How ridiculous the charges of socialized medicine are when a system of government hospital insurance was first put into effect by Bismarck in Germany in the late 19th century. Certainly, the American worker has a right to insure himself and his family during his working years against high hospital costs in his retirement period. Certainly, he should be able to do this in the least expensive way possible. Certainly also, this program should not be libeled with all sorts of outlandish names because insurance companies cannot make profits from the proposed system. It is a mystery to us why the American Medical Association is so strongly against this program. Its attacks and sloganeering seem to cover up some hidden fears. We wonder whether the AMA is afraid that some unfortunate practices will come to light if social security hospital insurance goes into effect. Why should the AMA object so violently to the aged at long last getting adequate hospital and nursing home care? Why should it object to physicians being assured that they will receive adequate pay for providing such care? We notice that the AMA, chamber of commerce, and other conservative organizations have expressed concern in your hearings about the payments workers would have to make for the social security hospital insurance. While labor is undoubtedly very grateful for these organizations' solicitude, we fear, however, that it is the same sort of concern which these groups have expressed in the past to save workers from minimum wage protection, social security coverage, and unemployment compensation. We need not tell you of the great need for this legislation. Our union's Washington office has reported that you and your committee have had voluminous testimony from great experts on American health conditions. We only appeal to you and the committee to make available this legislation to America's aged. Very truly yours, THOMAS J. LLOYD, President. PATRICK E. GORMAN, Secretary-Treasurer. STATEMENT OF JOSEPH A. BEIRNE, PRESIDENT, COMMUNICATIONS WORKERS OF AMERICA, AFL-CIO, ON HOSPITAL INSURANCE ACT OF 1963 (H.R. 3920) On behalf of the Communications Workers of America, AFL-CIO, I wish to express CWA's views concerning H.R. 3920, Hospital Insurance Act of 1963, introduced by Congressman King of California. While it is my purpose here to explain why the members of CWA feel, as expressed in their resolution passed by the 1963 CWA Convention, that it is imperative for the 88th Congress to enact into law a bill containing the administration's proposals concerning medical care for the aged, I will attempt to be brief so as not to overburden you with mere repetition of what has already been stated. First, let me say that I was extremely pleased when the National Committee on Health Care for the Aged stated in its recent report that there is a need for a basic Federal law based upon social security financing which would give fundamental hospital and nursing home care to those persons over 65. It is obvious that the Committee recognized the critical need for effective legislation that will provide health insurance for the Nation's senior citizens. The Committee as well as many economists, social scientists, physicians, Government officials, and other authorities realize that America faces a major crisis with the growing group of Americans over 65 years of age who, through no fault of their own, cannot provide adequate medical care for themselves. It is clear from all the statistics available that this national disgrace will worsen as the years go by. The Congress of the United States must act now if tragedy is to be averted in our own time. The factors which brought about this crisis are as evident as the crisis itself. Each year more and more Americans are living to an increasingly older age on an income below the level necessary to meet their ever-increasing medical expenses. It is estimated that by 1980 there will be 24.5 million Americans over 65 years of age. This will be an increase of 7.9 million over the total in 1960. While it is true that increases in the population of our senior citizens have in the past been accompanied by an increase in their median income, 1963 figures still show an inadequate $2,800 for two-person families with the head of the family over 65, and an equally inadequate $1,200 for persons 65 and over living alone. These meager incomes become without a doubt, quite inadequate when we realize that hospitalization for persons over 65 is more frequent, of longer duration and therefore more expensive than for those persons under 65. Furthermore, the cost of hospital and medical care is rising at an alarmingly rapid rate. The average expense per day of hospital care has risen from $23.12 in 1955 to more than $37 per day at present. The needs of the aged are clear and demand a solution now. There is no doubt in my mind that the people who contend that the United States is faced with a serious human problem are absolutely correct. CWA, by its support of the Forand bill in 1958 and the King-Anderson bill in 1962, has recognized the serious proportions of this problem. Today we are even more convinced than ever that the 88th Congress must enact into law the proposals contained in Mr. King's bill. We feel that the Hospital Insurance Act of 1963 is essential if we are to meet our obligation to those citizens who have made their contribution to society and are entitled to live out their twilight years with a measure of human dignity. Some say that we do not need further legislation to provide hospital care for our older citizens because we already have the Kerr-Mills Act in effect. A close inspection of the results of Kerr-Mills leaves no doubt that it has not, and will not, eliminate the hospital expense problems faced by the aged. Kerr-Mills is a relief program, intended for the indigent. It inflicts a degrading means test upon those needing health care. Even worse, in many States, it requires an examination by a public official into the circumstances of relatives— sons and daughters of the elderly. It is dependent upon continuing State grants from the legislatures. It has not even begun to meet the medical care needs for the senior citizens. For example, at the present time only 28 States are paying MAA benefits under Kerr-Mills, and less than 7 out of every 1,000 aged persons in the United States are receiving any assistance under the Kerr-Mills program. In many cases these benefits were frequently meager, spotty, and uncertain. In contrast, under the proposed legislation it is estimated that 18 million Americans over 65 will be protected by January of 1965. At best, Kerr-Mills can function successfully as a supplement to the bill proposed by Mr. King. With the main burden of health costs met by social security, it would become possible in all States to set up good medical assistance programs under Kerr-Mills to meet any remaining needs. There are other individuals and groups opposed to a medical assistance program financed through social security who contend that private insurance plans are sufficient to care for the medical needs of our senior citizens. In light of all the facts one must conclude that this is pure sophistry. Health insurance plans available to older citizens that would provide reasonable protection are too costly for their limited financial means. For example, Blue Cross plans covering 70 days of hospital care and auxiliary benefits on a service basis can be obtained by the older citizen at an annual cost, per individual, of from $97 to $175. When a person's total yearly income is approximately $1,000 this cost is prohibitive. On the other hand, those plans that are available at moderate costs provide only severely limited protection. The opponents of hospital insurance through social security have realized great mileage out of two other arguments. They contend that hospital insurance through social secuirty is "socialized medicine." It should be understood that socialized medicine is a system where doctors work as employees of the Government, and the Government owns the medical facilities. The administration's proposals, as contained in Mr. King's bill, are not socialized medicine in any way, shape, or form. Under the proposed Hospital Insurance Act of 1963 the Government would not provide a single medical service, but only provide basic hospital insurance to the aged. Hospitals and other services would be paid in much the same way that Blue Cross and some other insurances now pay. Furthermore, the proposed law specifically states that the Government would in no way control, regulate, or interfere with the practice of medicine or the administration and operation of participating hospitals. It is apparent that the tag "socialized medicine" is a stigmatic appellation designed as a scare slogan. The second argument most widely used by those who oppose the administration's proposals is based on what they allege to be excessive costs. They know better, but deliberately quote figures that include total social Security contributions by both employer and employee which is not only inaccurate but dishonest. In truth, the administration's program would cost pennies a day contributed by workers and employers. Spread out over his working life a contribution of about $1 a month cannot be considered a great sacrifice to any individual. In closing, let me take this opportunity to say that I believe it is apparent from the multitude of available evidence that the cost of health care in old age must somehow be provided and paid for. The question is whether the cost shall fall as a sudden crushing burden on old people and their families-with charitable help available only after they have been reduced to dependency; or whether the American worker will be able to contribute during his working years toward paid-up hospital insurance which will be available to him when he retires. The former view is charity and the latter is a right. Let us never lose sight of the fact that the Americans have a right to live their retirement years free of the worry and tragedy that extended illnesses inevitably bring. STATEMENT OF HYMAN HIRSCH, FOR THE AMERICAN FEDERATION I have been authorized by President Carl Megel of the American Federation of Teachers, AFL-CIO, to request to be heard by your committee in its current public hearings on the King-Anderson bill, H.R. 3920. Our organization has over 100,000 teacher members in 500 locals distributed in 42 States. At our convention in August of this year, our delegates adopted a resolution supporting the King-Anderson bill. We strongly urge its support by your committee and the House. As teachers we are among the first to hear of family difficulties through our students. Sickness of an aging grandparent, and the high cost of medical care is a recurrent theme in many households. I am sure many can cite instances such as I recently came across of an 83-year-old widow, a former novelist, who barely manages on $100 monthly social security payments. Her arthritis keeps her house-confined. She hasn't had nursing or doctor's care, which she desperately needs, in many months. Her pride prevents her from applying for charity. Would you say that the Kerr-Mills Act with its means test or a New York 65plus with its high insurance cost can help her? More than half of the 17.5 How many like that 83-year-old widow are there? million persons over 65 are in similar circumstances. nor private insurance plans can meet their needs. bill, millions of senior citizens will receive sorely needed medical care of which they are now deprived. Our wealth makes it possible for us to spread our largess in foreign aid, spend billions on the space race and on defense. This is as it should be. But when it comes to setting up a plan for medical care for senior citizens, which will be financed largely through social security, a thousand objections are heard. |