REINVESTIGATIONS Reinvestigations of eligibility are made periodically and not less than once each year. Each person receiving medical assistance for the aged is responsible for notifying the county department of any change in his property or that of his spouse. After review of circumstances, medical assistance may be discontinued if the person is no longer eligible. APPEALS Appeals may be made at any time. An applicant for or a recipient of medical assistance who is dissatisfied with any action or failure to act on his request for assistance, should discuss the matter with his worker. If a satisfactory agreement cannot be reached, he has a right to a hearing before a representative of the State board of social welfare. Forms for filing an appeal may be obtained from the county department of social welfare or the State department of social welfare. REIMBURSEMENTS Claims against the estates of deceased recipients may be filed by the State department for the full amount of assistance granted. However, no claims will be collected during the lifetime of a surviving spouse. EXHIBIT C SENATE FILE 411-AN ACT TO MAKE APPROPRIATIONS TO THE STATE DEPARTMENT OF SOCIAL WELFARE TO BE USED FOR MEDICAL ASSISTANCE TO THE AGED Be it enacted by the General Assembly of the State of Iowa: SECTION 1. There is hereby appropriated out of the general fund of the State of Iowa from funds not otherwise appropriated to the State department of social welfare the sum of $1,680,000 for each year of the biennium beginning July 1, 1963, and ending June 30, 1965, to be used for medical assistance to the aged as provided by chapter 249A, code 1962. SEC. 2. In making this appropriation, it is the intent and purpose of the general assembly (a) to provide medical assistance on behalf of eligible aged individuals whose health needs are not being met through existing programs and (b) to create a pilot program that will provide experience and information necessary to determine the number and health needs of such individuals and the feasibility of providing for their health care through insurance coverage. The State board of social welfare shall contract with one or more private organizations for the handling and processing of claims as set forth in subsection 1 of section 249A.5, code 1962, and no part of this appropriation shall be used to pay for care in nursing homes for a period longer than 180 days and then only when such nursing home care immediately follows hospitalization. SEC. 3. The budget and financial control committee is hereby authorized to supplement from their appropriation the sum of $320,000 for each year of the biennium or so much thereof as may be necessary to supplement the appropriation provided for in section 1 of this act. EXHIBIT D LEGISLATIVE HISTORY OF SENATE FILE 411 AND EFFORTS TO PREVENT WHOLESALE TRANSFERS OF OLD-AGE ASSISTANCE RECIPIENTS TO MEDICAL AID TO THE AGED During the last session of the Iowa General Assembly, an appropriations bill for medical assistance to the aged was enacted. During the time the bill was under legislative consideration, several telegrams were received by the Governor's office from the Department of HEW. The Iowa Legislature was attempting to prevent wholesale transfers of oldage assistance nursing home patients to the medical aid to the aged program. The following sequence of events outlines the role the Department of HEW played in the consideration of senate file 411: March 27, 1963.-SF-411 brought out by senate appropriations committee vote of 28 to 1. Bill provided that persons eligible for OAA benefits "shall not be eligible for medical assistance for the aged." March 29, 1963.-Telegram from John J. Hurley, Acting Director, Bureau of Family Services of HEW, to Kirk Boyd, administrative assistant to Governor Hughes: "Re telephone conversation today March 29, 1963, re section 2 proposed appropriation legislation. (1) The provision that persons eligible for old-age assistance shall not be eligible for medical assistance for the aged is not acceptable. The provision in the proposed legislation could exclude from medical assistance for the aged persons eligible under that program who were not receiving old-age assistance and did not wish to apply for such assistance." April 3, 1963.—Amendment filed providing that only persons "who, within 90 days prior to application for medical assistance for the aged have received" OAA benefits shall be ineligible for MAA benefits. April 8, 1963.-Second telegram from Hurley to Boyd: "Re telephone April 8, 1963, re proposal to amend provision in Senate file 411 that persons eligible for old-age assistance shall not be eligible for medical assistance for the aged to provide that persons who received old-age assistance within 90 days prior to application for medical assistance shall not be eligible for medical assistance for the aged. "Such an amendment is not acceptable. "Under title I of the Social Security Act, all individuals wishing to make application for medical assistance for the aged must be given opportunity to do so, to have their eligibility under that program determined with reasonable promptness and if eligible to receive the benefits of the program. Individuals who may be eligible under both old-age assistance and medical assistance for the aged must have the right of choice as to the program under which they wish to apply for benefits." April 9, 1963.-SF-411 passed Senate 48 to 0 despite second Hurley telegram. April 12, 1963.—Third telegram from Hurley to Boyd :· "Re your letter April 9, 1963, re amendment to pending medical assistance for the aged legislation that persons who received OAA within 90 days prior to application for MAA shall not be eligible for MAA. Title I of the Social Security Act as amended governs both OAA and MAA. It would not permit approval of or Federal financial participation in a plan for MAA which denied assistance to persons because they had received OAA prior to application for MAA." 66 May 2, 1963.-SF-411 passed the House 106 to 0, with the following provision: '(249A.5), code 1962, and no part of this appropriation shall be used to pay for care in nursing homes for a period longer than 180 days and then only when such nursing home care immediately follows hospitalization." HEW officials had informally indicated that the above amendment to SF-411 would be acceptable and would permit the MAA program in Iowa to qualify for Federal participation. May 6, 1963.-SF-411 passed the Senate 50 to 0. Senate file 411, as enacted, attempts to prevent wholesale transfers between OAA and MAA by placing certain restrictions on the services provided under MAA. It is regrettable that the Department of HEW's attitude forced the Iowa Legislature to find an awkward and strained solution to the problem of wholesale transfers between the two programs. EXHIBIT E [From the Des Moines (Iowa) Register, Nov. 12, 1963] EVASION OF KERR-MILLS ACT A recent Senate committee study of the medical assistance to the aged (MAA) program under the Kerr-Mills Act discloses widespread violation of the intent of Congress in administration of the program. MAA was intended to provide medical care for elderly persons who were not covered by existing programs for the indigent. The program is intended to help persons able to meet day-to-day needs on their own (and thus were not on old-age assistance), but who did need help with major health bills when illness struck. The Senate committee found that nearly 100,000 of the persons who have received help under MAA in the last 3 years were transferred from the existing medical care program under old-age assistance. The committee report explains: "The motive is clear-the Federal matching formula under MAA is more generous than under OAA. The method is simple-drop skilled nursing home care, for example, from the OAA program and transfer coverage for that service to the MAA program. Now, the OAA recipient in need of nursing home care cannot be provided the care he needs, for OAA no longer includes that service. A few forms are completed and the OAA recipient is quickly transformed into an MAA recipient. The clear intent of the Congress is violated by these paper transactions." The paper transactions can result in substantial savings of State funds at Federal expense. The savings need not go into improved State old-age assistance grants, but can be applied to any program. In effect, all of the country's taxpayers are helping carry some of the load previously carried by taxpayers in those States that are resorting to the gimmick of transferring OAA recipients to the MAA program. Iowa wisely has refused to have any part of this. The last session of the Iowa Legislature acted to discourage transfers from OAA to MAA by requiring that nursing home care under MAA be available only after hospitalization and for a maximum of 180 days. It is disturbing that Congress, while complaining about the violation of its intent, continues to permit it. The Department of Health, Education, and Welfare also has done nothing to close the transfer loophole by administrative regulation. In fairness to States such as Iowa that insist on obeying the law, steps should be taken to make all States obey it. There is no reason why Iowans should help make it easier for residents in Connecticut, Washington, and other States to meet their obligations because these States refuse to abide by the clear intent of Congress on MAA coverage. To: Leo H. Irwin, chief counsel, Committee on Ways and Means, U.S. House of From: John D. Chapman, insurance broker, Akron, Ohio. GENTLEMEN: Any discussion or commentary concerning additional liberalizing amendments, such as medical care for the aged, to the social security program must, to be realistic, avoid what is generally referred to as "welfare emotionalism." Four fundamental questions must be answered with great care before a judgment free of emotion can be rendered. 1. What is the need? There is a real need for taking care of some people over age 65. Likewise, there is no logic in forcing medical care on everybody over age 65. A few statistics will bear this out as follows: More people over 65 have insurance of some form today than ever before. More people age 65 or over have become owners of hospital protection since 1959 than the numberof people who have turned age 65 since 1959. Almost 60 percent of the aged have some form of hospital protection today, whereas, only 27 percent had such protection in 1952. The percentage having some form of protection has obviously more than doubled, but the number has tripled from 3 million to something over 9 million. It is conservatively estimated that 80 percent of the population over age 65 will have such protection by 1970, just a few years away. It is known today that there are approximately 17 million over age 65 in this country which represent 94 percent of the total population. It is a known fact because of the accurate records of birthdates since 1900, that the number of people over 65 will never reach 10 percent of the total population in this century. As a matter of fact, the year 1998 will represent the fewest number of people over 65 in this country in recent history because of the low birth rate in 1933. It is known that approximately 10 percent of the aged are indigent, and another 10 percent are medically indigent in that they are able to provide food and clothing. Does it make sense to legislate compulsory medical care for the aged for everybody when the need is something less than 20 of 10 percent of the total population? 2. What are the real objectives of those who favor the social security approach to providing medical care for the aged? The true objective of providing medical care for the aged should be to aid those in need. If those who insist on using the social security system as the administrative vehicle for giving medical care to the aged really had aiding those in need as their primary objective, it would seem that the present Kerr-Mills bill along with existing State, county, and city aid programs would suffice. Where these programs are inadequate, they could be amended. But, because the use of social security as the administrative vehicle legislates medical care for everyone regardless of need, the goals and objectives of those who favor the social security approach must of necessity go beyond just providing aid for those people in need. Any law using social security as the administrative vehicle for providing medical care for the aged will surely include certain controls over the hospitalmedical industry and such control will automatically interfere with the doctorpatient relationship. Included in the King-Anderson bill of a few years ago were provisions for the licensing of hospitals participating in the program which could not help but lead to direct control at some point. The payment the hospital would receive in return for medical care rendered would have been determined by the Government. If one controls the price, he automatically controls the service. Such a program could not help but interfere with the doctor-patient relationship if the doctor did not have the authority to decide whether or not his patient should remain in the hospital after 30 days. Under the old KingAnderson bill a committee would make this decision. This represents interference, because the doctor is not making a medical decision. Generally speaking, people who object to the Kerr-Mills bill have pointed to the so-called means test. Yet, it would seem that, if the tax dollars of all the people are to be used to aid in the medical field, these dollars should only be used through such a bill as the Kerr-Mills bill where their usage will be limited to those in need. We have ample evidence of the use of a means test in Federal legislation in other areas. For example, if one wishes to borrow money to purchase a home through FHA, he must complete a financial statement in detail. If one wishes to use the facilities of a Veteran's Hospital, under certain circumstances he is subjected to a means test. Public housing is open only to those whose income is below a certain figure. Even social security as we know it today imposes a means test because benefits are geared to income. If honest to goodness aid to the indigent is a true objective of our society, we have the necessary legislative mechanism already in operation. With slight amendment to existing legislation the problem can be solved completely without the controls inherent in utilizing a compulsory plan through the social security system. Using the social security system as the administrative vehicle for a medical care for the aged plan would represent a radical departure from the fundamental philosophy of social security which could have most serious repercussions. In 1937 the initial goal of the social security program was to provide a minimum standard of living for those people turning 65. The minimum standard of living was spelled out in dollars and cents and well defined. The addition of medical care for the aged under social security would change the entire approach to solving a problem of the aged from a well-defined program to an undefined service type program. Neither the benefits nor the cost would be defined. Our grandchildren cannot afford such a change in philosophy. 3. What is the financial condition of social security today and could it possibly be improved by having the social security system administer medical care? The recently added disability benefit portion of the plan is already in trouble financially because the payments to the disability trust fund have not been high enough. The original Social Security Act approved in 1935 made provision for an old-age reserve account in the U.S. Treasury. In 1939 the reserve account was abolished and in 1940 a trust fund known as the Old Age and Survivors Insurance Trust Fund replacing the reserve account was created. The requirement of an actuarial calculation was abolished. As a result, today social secu rity benefit payments are, in effect, being made from current contributions. We are many, many billions of dollars behind on past service. It is surely safe to say that it is probable that this situation would only deteriorate further with the addition of a service type compulsory benefit program such as medical care for the aged being included within the existing social security system. 4. What will the ultimate cost of social security be? At the present time, on a $4,800 or more annual wage, social security is costing $348 per year and in 1968 it will be $444. In 1937 it cost $60. In reality only half of each figure is being directly assessed against one's paycheck. However, because most people in America are covered they are paying the other half themselves because the cost to every employer is included in the price of his product. These premiums we now pay social security are still not enough to pay for the funding of the existing past service debt of several billions. It is a generally accepted fact that the cost at age 65 to provide $1 per month for life is a lump sum of $140. If we assume a modest hospital premium of $10 per month for hospitalization insurance the immediate liability for everyone age 65 would become $1,400. It would be in order to discount the $1,400 figure because of volume and because not all people 65 or over are exactly 65, and therefore have a lower expectancy than those people who are exactly 65. However, regardless of any discount allowed to consider these factors, the immediate ultimate liability created by adding medical care for the aged to social security is many, many billions. The ultimate cost for the entire social security program cannot be predicted under these circumstances. Sound underwriting and sound realistic benefits are needed now without any further amendments to the program if it is to serve its original purpose well. This picture of uncertain ultimate indebtedness described above can be solved very easily by the collective-bargaining process or by mutual agreement between employer and employee. There is no reason why retiree hospitalization coverage cannot be included within existing pension plans and added to new ones. The coverage could be funded over a period of years prior to age 65 just as pension programs are funded at present. If people really want this kind of coverage they would sacrifice a few cents per hour in current wages to obtain it. In so doing, there would remain some hope that at some future date the social security program as it is presently constituted could be changed and made sound. Respectfully submitted. JOHN CHAPMAN. MEDICAL CARE OF THE AGED AND SOCIAL SECURITY-STATEMENT OF DR. RUSSELL FORREST EGNER, PRESIDENT, THE VOICE OF THE PEOPLE IN ACTION (THE SOCIETY OF THE PEOPLE, INC.), CHILLUM, MD. Honorable Chairman and members of the committee, the richest country in the world should provide a satisfactory way to protect the needy in old age. The rugged individualism days are gone. We have outlived the days in which the people in a greatly increased and more compact population can all find security in old age. The hospitalization costs have reached a staggering height and the unfortunate deserve some help. The nature and extent of the aid should carefully be analyzed. TOPICAL HEADINGS (1) The adequacy of medical programs under existing law (Kerr-Mills Act) The Kerr-Mills bill already enacted into law has merits and possibly could be extended to fill the needs of old age. An extension of this law to speed up the aid through the States is necessary. The Kerr-Mills bill, when improved upon, is to be preferred to a bill associated with social security. It provides better for those who need help and longstanding cases. (2) The extent and adequacy of coverage under private or nongovernmental health insurance programs Our country is a free enterprise system, and is spending billions of dollars to maintain and popularize it throughout the world. Our quality of medical care by private doctors is the best in the world. This alone, however, does not insure the protection of many people. The cost of the service and hospitalization are almost prohibitive to many in prolonged cases of sickness. |