STATEMENT OF FACTS IN FAVOR OF MEDICARE TACOMA, WASH., November 18, 1963. Why we should have medicare under social security, it has been my belief for some time that the senior ciitzens should be taken care of under this plan. I have been a strong worker for this plan, as I worked for social security and railroad retirement. Some of our union officials were against pensions till they were made to see the light by their own members. I recall that a president of the railroad conductors sent out a circular to his membership which I quote: "I admit my own dereliction that I did not see this 25 years ago; however, I was young then, and I thought I would never grow old." I was at the dinner table with three members of our organization in Cleveland, Ohio, in May 1933, one of the members present was Vice President Ferguson, Brotherhood of Railroad Trainmen, and was chairman of the board of directors of that organization. I asked Brother Ferguson what he thought of the pension the members were trying to have passed by the Congress. He said, "Do you know what that would do to our organization?" I said, "No, what would it do to our organization?" He said if the pension became effective we would lose 50 percent of our membership. I disagreed with him, and as the pension became effective we did not lose members; we gained members. And so it is with medicare regardless of a certain group of doctors putting out the rumor that social security is on its last legs, which is not true. My wife was in the hospital 2 weeks. Her bill for that time was $1,000 and that did not include the doctor's bills. It seems a shame that a country as rich as ours has not looked in to the welfare of its oldsters many years ago; that countries such as England, Sweden, Norway, Denmark, Germany, and our next-door neighbor, Canada, are so far advanced in medicare. I can only say shame on Congress for holding up this legislation, and shame on me for not pressing this sooner. I mentioned the foregoing facts for the record, and the fight we had to put up for pensions. Now it's medicare, and I think the people are well enough aware what it means to them. Thank God not all doctors are against medicare; they realize it gives the medical profession a very black name. Sincerely ROBERT M. KIRCHNER, Member Golden Age Club No. 1. NOVEMBER 23, 1963. Mr. LEO H. IRWIN, Chief Counsel, Committee on Ways and Means, DEAR MR. IRWIN : During the 1963 session of the California State Legislature and relying on the statements of the private carriers that they could offer a real health insurance plan for the aging, a bill was passed removing these private carriers from the provisions of the State Antitrust Act. On November 5 and 6, releases in the newspapers carried notice of the proposed plan. An editorial in the San Francisco Chronicle of November 7 states as follows: "The proposed old-age insurance-dubbed 'Western 65' is the joint endeavor of some 40 of California's largest insurance companies with combined assets of more than $30 million. There are three plans: Plan No. 1 would cover 85 percent of medical-hospital costs after the policyholder had paid the first $500. The monthly premiums would be $14 per month per person or $168 per year. Under this plan a person having a $750 hospital bill would have $250 after deductions on which the carrier would pay 80 percent or $500. The policyholder would be his own insurer for almost three-fourth of the total expense at a premium cost of $168 per year. Plan No. 2: This plan would pay $20 per day for the hospital room and board for 31 days, with $200 allowance for incidental expense. The cost: $11 per month or $132 per year for premium. This would be little if any better than the 65plus policies now offered and in force by several companies at premiums of $6.50 to $8.50 per month and would perhaps cover from 20 to 25 percent of costs. Plan No. 3: This plan would cover 80 percent of room and board and major expenses (medical) for a total of 180 days. I have not been able to find out just what is included in major medical expense. The premium would be $23 per month or $276 per year per person. Such a cost is far beyond the ability of millions of the aged to pay. The Chronicle closes its editorial with the statement that private enterprise should have every chance to prove its competence to solve what is doubtless one of the Nation's gravest social and economic problems. The plans as submitted prove that after all of these years of pleading for time--the private carriers either cannot or will not come forth with a plan offering a substantial coverage to the aging at or near the premium that 70 percent of the aging can afford. I hope this committee will send the medicare issue to the floor of the House to be debated and voted on. If this is done, I feel sure that a workable plan under social security will be the result. Sincerely, EMERSON O. MIDYETT. THE ECONOMIC IMPACT OF MEDICARE The President in his message to Congress of April 21 stated, "Health insurance for senior citizens is the most important health proposal pending before Congress. We urgently need this legislation-and we need it now." I agree with the President 100 percent. In fact, it is so important I think it should be passed before the tax cut bill. The passage of the medicare bill would greatly boost the economic growth of our country. The income received by the 18 million senior citizens is estimated to be from $27 to $30 billion. About one-half of this income comes from social security, the rest from other pensions, annuities, part-time jobs, etc. When you divide these $30 billion by 18 million, you come out with less than $1,500 per person. Many of the retirees have less than $1,000 income. Since social security is not a part of the Federal budget, and most of the rest of the income is from private sources, the passage of the medicare bill would not burden the Federal budget. Thirty billions of dollars is more than twice the income of all the farmers in this country. In fact, it represents one of the biggest blocs of consumer buying power in this country. This buying power would be increased, I estimate, from $2 to $3 billion a year if medicare were passed, for the average senior citizen pays from $100 to $200 a year for hospital insurance. The 40 percent of retirees who carry no hospital insurance would save many more millions in hospital bills. Even the children of the latter would save millions more, for they often have to help foot the bills of their aged parents. They could use this money in raising and educating their children. The taxpayers would come into a big saving, for most of the 22 million of old people now on old-age assistance were forced to apply for welfare aid because of a big hospital or other medical expense. In the future the OAA roll would decrease very much. Thus, the Federal and State Governments would save many millions of dollars. The fact that senior citizens are sick more frequently and stay in the hospital two to three times as long on the average is one of the great reasons that hospital insurance is so high. By putting the "over-65" in a social security hospital insurance plan, the "under-65" would have a lower hospital insurance rate. This would help offset the one-quarter of 1 percent rise in social security rates they would have to pay for their own retirement hospital insurance. Most large corporations in this country pay one-half of the cost of hospital insurance for their retired employees. This amounts to from $10 to $12 per month for each retiree. If medicare were passed, these corporations would save millions of dollars, and their retired employees would have better hospital insurance under medicare. This saving would go a long way to offset the rise of one-quarter of 1 percent in the social security rate for all future retirees' hospital insurance. Because about 80 percent of the senior citizens do not have enough income to pay income tax, the cut in the income tax rate would not be much help to most of us. However, if the medicare bill were passed, the money we would save in hospital insurance would help us to pay the high property tax, sales tax, etc. We would enjoy an indirect tax cut. Millions of old people who have a few hundred dollars saved up long to take a trip to see more of our beautiful country. But they dare not spend their savings for a long illness might make the candidates for the welfare roll. Although many retirees might not be able to travel because of physical or financial reasons, they would be very happy to put an extra dime or two in the church collection plate on Sunday morning or to give to other worthwhile causes. Any preacher would tell you that the church budget would be much lower if it were not for the contributions made by the senior citizens on the church roll. Most States claim that tourism is their second or third largest business. I am sure that if medicare were passed the retirees would help to increase that tourist business and that the whole country would be more prosperous. Because of the great economic force that passage of the medicare bill would generate, I think this bill should be passed now, even before the tax cut bill. Then this present generation of senior citizens silently steals away-in a rocket-to a better world, we will not take one dime with us. We will leave it all behind for other to enjoy. The Federal Government may collect an inheritance tax if there is enough left. Your retired friend, EDW. L. ROBINSON. STATEMENT OF JAMES H. SCHEUER Mr. Chairman and members of the committee, my name is James H. Scheuer. I am a resident of New York City, where I have been active with numerous civic groups for many years. I am chairman of the executive committee of the American Jewish Congress, Metropolitan Council, and a member of the executive committee of the Citizens Union. I am speaking today as an individual citizen gravely concerned about the issue of medical care for America's greatly expanding older population. I urge that this committee, and the U.S. Congress-establish a system of medical care for persons over 65 years old to be administered through the social security program. Bills to achieve this aim have been presented to you gentlemen year after year. Meanwhile, the problems of hospital bills and other medical expenses continue to plague older persons in America. Surely a nation as rich in resources and imagination as ours must show compassion for the elderly person who has worked hard all his life and spends his last years troubled that a major illness will cause financial ruin for him and his family. The program before you is not one of charity. It is clearly a program of selfhelp. As was pointed out last week by a respected Washington columnist, Mr. Andrew Tully, this program "enables the citizen to pay for his protection during the time he can best afford to contribute-while he is working * * the truest sense, an insurance plan." It is in Much of the opposition to this program today is raised by the same voices that 30 years ago stated that the social security program would put an end to the free enterprise system and the individual initiative, and signal the doom of private insurance companies. Instead, we have seen that the social security program was a stimulus to our entire economy, including the private insurance companies. The social security program has been beneficial to both workers and management, and is now an essential aspect of America's economic security. I am confident that the same would be true of a carefully drawn program for medical care for persons over 65. And I urge that Congress at this sessionapprove a bill to provide for medical care for our older citizens. (The following material was submitted by Cong. Clark Thompson.) THE LIBRARY OF CONGRESS, Washington, D.C., October 10, 1963. To: Hon. Clark W. Thompson. This is in reply to your request for a comparison between the administration's proposed medical care for the aged and Texas 65 Health Insurance offered by a group of insurance companies associated for this purpose into the Texas 65 Health Insurance Association. The ad you sent us states that special enabling legislation was necessary for this insurance to be offered. The legislation probably gives the companies permission to participate in the association and pool their resources without being in conflict with antitrust laws. This fact, however, has not been thoroughly researched by this office because of the deadline of the assignment. The Washington office of the Health Insurance Association informs us that according to their information on Texas 65 Health Insurance, all insurance companies doing business in Texas have been invited to join the association and that each company may elect the percentage of participation it wishes. Texas 65 Health Insurance offers persons 65 years of age or over residing in Texas and their spouse regardless of age two health insurance plans, one or both of which may be purchased by the aged person or by a relative on his behalf. The Texas 65 Basic Plan is designed to offer protection against limited hospital and surgical expenses and, with a minor exception, pays first dollar costs. The Texas 65 major medical plan is designed to help meet the cost of long-term care and calls for a deductible and coinsurance. Each policy is available regardless of the individual's past or present physical condition but conditions that existed within 3 months prior to the effective date of the policy are not immediately covered. The present enrollment period is October 1 through 31, 1963, and the effective date of the policy is November 1, 1963. The enclosed chart compares the major features of the two Texas 65 health insurance plans with the administration's plan. Those of the commercial plans are taken from the ad you sent us. Advertisements, by their nature, present information in broad and general terms rather than in depth and detail. Because of this the ad is somewhat ambiguous in certain respects and these ambiguities are noted on the chart. For example, in the major medical plan the ad reads for surgery and radioactive therapy: "Actual charge (according to $500 surgical schedule)." Does the policy pay the actual charge up to a $500 maximum or does it pay according to a schedule with $500 being the maximum payment? It also must be pointed out in evaluating the chart that it is difficult to compare private and Government plans, particularly in regard to cost and financing inasmuch as radically different approaches are involved. EVELYN PEEL. Comparison of the Texas 65 health insurance program with the administration health insurance bill 1st $25 of nonroom-and-board inpatient hospital expenses. (See last item under "Limitations on coverage" below.) Pays up to $5,000 a calendar year and a lifetime Persons residing in Texas 65 years of age or over $75 of eligible expenses per benefit period 1 plus the (NOTE.-Not clear from ad if one $75 deductible Administration bill (88th Cong.), S. 880 (Senator Under social security administrative mechanism (a) Are age 65 or over; and (b) Are eligible to receive (or receiving) (2) All persons not insured under social security or (a) Have reached age 65 before 1967; or For hospitalization: Varies with option of days of (a) Election of 90 days subject to deductible (b) Election of 45 days, no deductible. For outpatient diagnostic services: $20 deductible per 30-day period. For other benefits: None. |