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CHART 1

Arizona

Total population, 1,302,161; age 65 and over, 89,849 (source: U.S. Bureau of Census).

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1 Statistics from Arizona State Department of Welfare; Estimates from Arizona State Department of Welfare.

2 National average, 15 percent.

331.6 percent of old-age assistance recipients.

' Own home, value $8,000; liquid assets up to $1,000; and gross annual income less than $2,500.

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STATEMENT OF THE COLORADO MEDICAL SOCIETY IN OPPOSITION TO H.R. 3920

Colorado has a story to tell that has a very important hearing on the committee's action in regard to Federal medical legislation. To conserve your time, we will reduce it to near outline form.

Colorado pays the second highest old-age pension in the United States.
Colorado per capita income ranks 17th.

The conditions which must be met to qualify for the pension are very liberal. In 1957 Colorado developed a plan of medical care for her old-age pensioners under almost ideal conditions.

The following groups cooperated in formulating the plan:

1. Colorado Medical Society.

2. Colorado's Annuity League (old age pensioners' organization).

3. State legislature.

4. Governor.

5. Blue Cross and Blue Shield.

6. Colorado Hospital Association.

7. Colorado Pharmacy Association.

Its provisions incorporated the most desirable characteristics of a medical program:

1. Full pay for nursing home and hospital care.

2. Physicians' services in hospital and nursing home, plus some home and office calls.

3. Administration (fiscal agent) by a voluntary insurance plan at a cost of 1.5 percent.

4. A $10 million fund annually when actuarial estimates of costs were only $8.5 million.

5. Drugs at cost plus a reasonable handling charge.

What happened to this near perfect plan?

1. Additional benefits were added.

2. Cost of all items increased.

3. Utilization increased.

4. The cost of operating the plan soon exceeded $10 million.

This resulted in

1. New regulations.

2. Investigations.

3. Recriminations against first one group and then another in the press. 4. Restrictions on benefits.

5. Removal of some benefits.

The message is simply this: such unavoidable increase in cost and resultant problems is the fate of any plan of Government medical care.

The people of Colorado will work out these problems successfully for their old-age pensioners as they have always done in the past; each State has its own pecularities of economics, geography, and population.

Introduction of a new Federal medical care plan would constitute duplication and an unnecessary increase in the expense of providing medical care for the aged in Colorado.

Despite requests for knowledge of any unmet medical needs of aged people made to our congressional delegation, made to the public through mass media, to representatives of organized labor and leaders of aged groups, none has been reported to this society.

We believe that full implementation of the Kerr-Mills law in Colorado will provide future medical care for those not covered by existing programs but who demonstrate minor or major need. The Colorado Legislature has recognized this by two actions taken in March 1963. We wish to enter these actions into the record.

Senate Joint Resolution 21 indicates the intent of the legislature to investigate various means of implementing the Kerr-Mills law to provide care for those individuals not now covered by our old-age pension medical care program where such help is needed. It reads as follows:

SENATE JOINT RESOLUTION 21-BY SENATOR GILL

Whereas the act of Congress known as the Kerr-Mills Act provides matching funds to the States for the purpose of assisting in the medical care for the agedboth for those indigent persons who qualify for the old-age assistance program and other aged persons who are medically indigent under the medical assistance to the aged provisions of the Kerr-Mills Act; and

Whereas the State of Colorado is presently receiving in excess of $4,300,000 of medical care for those indigent aged who are not now receiving the old-age pension; and

Whereas the State of Colorado has not entered into a program to provide medical care for those indigent aged wh are not now receiving the old-age pension but who could be qualified for medical care under the medical assistance to the aged provisions of the Kerr-Mills Act; and

Whereas the general assembly recognizes that there are aged persons in Colorado who may be medically indigent and for whom Colorado makes no provisions; and

Whereas the requisite information to determine the magnitude of the problem, the probable cost, and the specific nature of the implementing legislation under the medical assistance to the aged provisions of the Kerr-Mills Act is not now available in Colorado; and

Whereas the increasing costs of the medical program now being provided by the State of Colorado indicate that before any new programs are undertaken, care must be exercised in designing the program and in determining ways and means of controlling the use and resulting costs: Now, therefore, be it

Resolved by the Senate of the 44th General Assembly of the State of Colorado (the house of representatives concurring herein) :

1. That the joint budget committee be directed to conduct a study to determine the extent of the medical problems of the aged in Colorado not eligible for the old-age assistance, to investigate the various means of assisting such persons under the Kerr-Mills Act, to prepare proposed implementing legislation, and to arrive at detailed estimates of the cost of such proposals.

2. That the joint budget committee is further directed to make recommendations to the Governor prior to January 1, 1964, as to proposed action that should be taken by the State of Colorado, in order that the proposed legislation may be considered by the Governor for inclusion on the call to the second regular meeting of the 44th general assembly.

3. That the legislative council be directed to make available to the joint budget committee additional information, staff, and facilities as may be required to carry out the purposes of this resolution.

Senate Joint Memorial 14 voices our legislature's opposition to enactment of a medical service program under the social security system such as is embodied in the King-Anderson bill. It reads as follows:

Senate Joint Memorial 14-by Senator Gill

Memorializing the Congress of the United States not to enact the King-Anderson or other similar legislation and expressing the opposition of the 44th General Assembly of the State of Colorado to such legislation

Whereas the State of Colorado has long been a leader in the field of State programs for medical assistance to the indigent aged, and as part of the expansion of such program, the people of this State adopted in 1956 a $10 million old-age pension health care program; and

Whereas this State financed and administered program has been ruled to qualify under the old-age assistance provision of the Kerr-Mills Act, and has, subsequent to the passage of the Kerr-Mills Act, been receiving Federal funds for the implementation of such Act; and

Whereas this general assembly has recognized the need for further investigation into the adequacy of medical care for the aged in Colorado by directing a study by the joint budget committee to determine ways and means for the further implementation of the Kerr-Mills Act: Now, therefore, be it

Resolved by the senate of the 44th General Assembly of the State of Colorado (the house of representatives concurring herein), That this general assembly hereby expresses strong opposition to the proposal now pending in Congress to amend the social security law, through the enactment of the Hospital Act of 1963, popularly known as the King-Anderson bill, and hereby memorialize the Congress of the United States not to enact such bill or any similar legislation, since such an approach is contrary to the efforts being made by this State to meet this problem at the State level under the provisions of the Kerr-Mills Act; and be it further

Resolved, That copies of this memorial be transmitted to the President of the United States, the Vice President of the United States, the Speaker of the House of Representatives of the United States, the Members of Congress from the State of Colorado, and the Governors of the other 49 States.

In summary, we wish to make the following points:

1. Colorado has, since early 1958, maintained a health and medical care program for its needy aged and, in spite of financial difficulties in the operation of this program, hospital, nursing home, drugs, and physicians' services are still provided under the program.

2. It is our firm belief that the financial problems encountered by our program are inherent in any program of State medicine, but we also believe that these problems can best be solved, and indeed will be solved, through the thoughtful initiative of the people of our State working in concert with those groups concerned with the program.

3. Colorado's Legislature has expressed its interest in further implementing the Kerr-Mills law and has expressed its firm opposition to legislation of the King-Anderson type.

27-166-64-pt. 5——13

4. We believe that Colorado's more than 6 years of experience with its old-age pension medical care program provides us with the knowledge to state that HEW cost estimates of II.R. 3920 are wholly unrealistic. Furthermore, we believe it is totally unnecessary to enact such massive legislation covering all those over 65, regardless of need, and that such legislation is financially unsound. 5. We believe that the majority of Colorado's citizens favor the Kerr-Mills approach to medical care for the aged.

STATEMENT OF THE MEDICAL SOCIETY OF DELAWARE ON H.R. 3920, SUBMITTED BY FLOYD I. HUDSON, M.D., PRESIDENT

On August 1, 1961, the Medical Society of Delaware had the privilege of appearing before the Ways and Means Committee of the House of Representatives to discuss H.R. 4222, the 87th Congress version of the proposed medical care amendments to the Social Security Act. We maintained at that time that the situation of the elderly was such that a special Federal tax was not required to buy medical and hospital care on a universal basis for the over 65, since the aged were demonstrably as capable of paying their hospital bills as were the under 65.

We based this position upon an independent survey of 100 percent of general hospital admissions among patients over 65 in the State of Delaware in 1959, conducted by the Welfare Council of Delaware. Very briefly, the facts were these:

Among hospitalized patients over 65 years of age 86.2 percent of hospital admissions paid their hospital bills from their own resources, including health insurance; 10.6 percent were medically indigent-that is, they met their day-today expenses without recourse to welfare, but were unable to pay their hospital bills in full, although many were able to make part payment; 3.2 percent were indigent, in that they received OAA and had payments made on their behalf to the hospital, in most cases, by the appropriate county; 55.2 percent of the hospital admissions had health insurance. In 46.2 percent of the admissions, this was Blue Cross; in 9 percent, commercial insurance; 1.4 percent had both Blue Cross and commercial coverage. There was a very striking difference in the distribution of this coverage by age range. While only one-third of those past 75 had health insurance, three-quarters of the patients from 65 to 69 did, indicating an increasing ability among the newer entrants to the aged group to be covered by voluntary means.

There was a difference of less than 3 percent in the proportion of patients over and under age 65 who were able to pay their hospital bills.

To repeat, these figures were derived from a study of all over-65 admissions to general hospitals in the whole State for the whole year.

Although limitations of time and money do not make it possible to update this survey, all the information we have been able to obtain tends to bear out our carlier conclusions, and to confirm the trends toward ever better coverage of the aged's health needs which were evident in 1959.

Health insurance coverage has continued to rise sharply. Whereas, 46.2 percent of the 1959 admissions had Blue Cross coverage, 56.8 percent of the over-65 population of Delaware had Blue Cross as of June 30, 1963. This has been an increase of nearly 23 percent in only 4 years, and substantiates our prediction that "as more and more people who have had the benefit of improved insurance coverage reach 65, we expect the percentage of uninsured to decline considerably." If we assume an equivalent increase in the percentage of commercial coverage, the 11 percent of the population so insured raises the total insured proportion of our elderly population as of June 1963 to over two-thirds, with the uninsured part diminishing rapidly. We have omitted the 1959 duplicate coverage factor, proportionate growth of which might or might not have increased the number of individuals covered.

It has been charged that health insurance coverage for the elderly is sometimes meaningless, in that benefits are limited. In this connection, it is worth noting that the contract held by 90 percent of the Blue Cross subscribers over 65-the contract held by over half of the senior citizens in the State-is exactly the same standard contract that serves quite adequately for Delawareans of any age.

We have felt that the increasing ability of the aged to pay for their own hospitalization is largely a result of two factors, the availability of better insurance policies to the aged, and the extension of more adequate incomes into the later years of life through pension plans, improved opportunities for saving, and, certainly not least, the social security program on a cash benefit basis. In this connection, a study of the over-60 population of Wilmington, published in October 1961 and not available at the time of the last hearings on medical careamendments to the Social Security Act, provides some interesting confirming information. Sponsored by the Catholic diocese of Wilmington, the survey was conducted and interpreted by the Bureau of Social Research of the Catholic University of America. In a general analysis of the economic status of the aged in the community, the report states, "over two-fifths of both sexes asserted that they could take care of themselves comfortably for the rest of their lives, and about the same proportion stated that they could take care of their ordinary expenses * * *. There remained a minority (8.1 percent of the men and 6.3 percent of the women) who 'could not make ends meet.' The plight of this group, of course, calls for careful consideration." An immediate question is whether the cost of illness is included in the "ordinary expenses" that over 90 percent of the over-60 said they could meet. The survey makes very clear that it is. "For most of the senior citizens in the study group," it states, "medical care has not created a serious financial problem during the preceding year. Over two-thirds of them spent either nothing at all on medical care or an amount less than $100. Approximately four-fifths had been attended by private physicians rather than at hospital clinics for minor illnesses during the preceding 5-year period. When they were asked how the bill could be paid if they should be hospitalized for several weeks, about one-sixth (or 16 percent) stated that they did not know. Of those who did have an answer, more than two-thirds mentioned either hospital insurance alone or hospital insurance plus savings.' This, incidentally, is in remarkably close correlation with the earlier finding that 82.6 percent of the aged do, in actual experience, pay their hospital bills from their own resources, and with the help of insurance coverage.

Among the conclusions of the diocese of Wilmington survey are these statements: "Wilmington's elder citizens leave us with a happy impression. As a group they seem to be financially independent, socially well adjusted, and rather healthy." There is specific recognition that a minority is in trouble, and must be helped. But there is no finding of general inability on the part of the elderly population to care for itself. How unique are these findings to Wilmington? The survey states that "the economic picture of senior citizens gathered in the St. Louis and Buffalo studies ('persons over 60') and the Cleveland study ('persons over 65') are in quite close agreement with our own findings. In these studies, too, there was a high degree of satisfaction with present living arrangements. Very few were in such financial difficulty that they could not make ends meet. The general picture, as in our own study, was rather encouraging."

Further corroboration is to be found in an April 25, 1962, statement of the Welfare Council of Delaware, a statewide planning agency, in discussing its community service plan for the aging: "Because of greater economic security he (the older person) tends to seek and pay for the services he considers desirable and suitable. Not all older persons have this freedom of action. However, the proportion who lacks economic maneuverability has declined dramatically, and will continue to decline."

And, finally, as recently as July 12, 1963, the Delaware Department of Public Welfare predicted a continuing decline in the number of applicants for old-age assistance, despite an expected considerable increase in the number of older persons in the State. We have discussed this decline before this committee in the past, but the following chart of OAA recipients as a percentage of the over-65 population in Delaware is new and may be informative.

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