Obrázky stránek
PDF
ePub

vate insurance resources, must have limits on the duration of benefits. It is after these benefits have expired that the MAA program can play a realistic and useful role in meeting the Nation's needs.

Incorporation of benefits under the social insurance program will disencumber State and local tax commitments to an extent that will enable States like California to build a comprehensive health care program, with the emphasis on preventive medical services which is now lacking in the majority of programs. It may enable the States to assume greater responsibility for the health care of those economically deprived persons who have not yet reached the magic chronologic age of 65.

As welfare administrator, I favor the proposal particularly for the reason that it will be a major component in the Nation's attack on the problem of poverty. There is no doubt that ill health breeds poverty, especially among the elderly, and that the opportunity of early diagnosis, prompt care and rehabilitative measures when indicated, will help break the vicious cycle of illness and poverty which saps our strength as a nation.

I realize that the proposal will cost money and that it must be financed through an increase in payroll taxes. But I am convinced that this is a small price that the working people of this country are willing to pay for basic security against the costs of health care in their retirement years and against having to ask for public aid after a lifetime of personal self-reliance.

With the possible exception of the few who see "socialism" in all human progress, the social insurance program has won overwhelming public support and is an integral part of American life today.

The people know that today three generations of middle-aged and older people have available to them a base of economic security under social security which, if absent, would result in massive personal suffering and economic catastrophe to individuals and the Nation as a whole.

I urge your committee to extend this same protection in the case of paying for health care costs as an act of social justice and respect long overdue for the older citizens of California and the Nation.

Senator SMATHERS. The committee will stand in recess until 3 o'clock this afternoon, when we are going to hear from Mr. H. Lewis Rietz, the Health Insurance Association of America.

(At the request of the chairman, the following are made a part of the record :)

STATEMENT OF JOHN P. MEDELMAN, M.D., PRESIDENT, MINNESOTA STATE MEDICAL ASSOCIATION, ST. PAUL, MINN.

THE MINNESOTA STATE MEDICAL ASSOCIATION'S POSITION ON FINANCING HEALTH CARE, EITHER OPTIONAL OR OTHERWISE, UNDER THE OASI PROGRAM

In 1959, and also in 1961, the physicians of Minnesota had an opportunity to present a statement to the House Ways and Means Committee on the Forand and King-Anderson bills. We appreciate this opportunity to communicate with the Senate Finance Committee in 1963, because conditions which might have appeared to justify such legislation have changed materially in a period of 2 years as more statistics have become available.

Four years ago, in our statement to your colleagues of the House, the Minnesota State Medical Association said: "In summary, the physicians of Minnesota are aware of the problems involved in providing health and medical care for our senior citizens. We are pledged to do everything possible to meet this challenge by implementing existing plans, and we wish to be permitted to carry out this pledge." You have given us the right to implement the "existing plans," and today thousands of persons over 65 years of age are reaping the benefits. Since July, nearly 38 percent of all the aged in Minnesota have come under our new comprehensive health care plan.

On August 4, 1961, Dr. J. Minott Stickney, an actively practicing Mayo Clinic physician, pointed out to the House committee that we in Minnesota had collected many "solid facts about our aging population." After enumerating much new data collected by the Minnesota Department of Public Welfare and other agencies, Dr. Stickney made this statement: "On the basis of the facts uncovered in Minnesota, the question arises as to the need for the King bill in Minnesota. We believe that these facts warrant the conclusion that the bill is not needed." Since then we have assembled additional pertinent statistics from local hos

pital studies, as well as from a comprehensive survey completed in late 1963 by the Community Health and Welfare Council of Hennepin County, Inc., the latter being a united fund agency.

We believe that the information contained in the Minnesota Department of Public Welfare study of 1960, augmented by recent studies and events in Minnesota, demonstrates conclusively that there is absolutely no need for any additional type of health care program in our State whether it be optional or otherwise.

Minnesota's aging population receive top care

New health care plans.-According to a survey done in 1960 by Dr. Marvin J. Taves, former professor of sociology at the University of Minnesota, 5 percent of the Minnesota people over age 65 said they had a medical need which was uncared for because it was too expensive.

Since July 1 of this year, no Minnesotan over 65 can make that statement. The legislature in Minnesota has now passed a comprehensive medical care program under the medical assistance to the aged portion of the Kerr-Mills bill which will take care of such needs. The State has had a full benefit old-age assistance program, in addition, for the past 15 years.

The MAA plan will provide the following benefits for 38 percent of all the senior citizens:

1. Inpatient hospital services.

2. Skilled nursing home services.

3. Physician's services.

4. Outpatient hospital or clinic services.

5. Home health care services.

6. Private duty nursing services.

7. Physical therapy and related services.

8. Dental services.

9. Laboratory and X-ray services.

10. The following, if prescribed by a licensed practitioner-drugs, eyeglasses, dentures, and prosthetic devices.

11. Diagnostic, screening, and preventive services.

12. Any other medical care or remedial care recognized under State law.

Over 140,800 of the 370,000 persons over 65 in Minnesota will receive $13,700,000 in additional health benefits each year. Those who qualify will be able to own and keep up to―

1. $15,000 in real property.

2. $1,800 annual income if single and $2,400 if married.

3. $750 liquid assets if single, and $1,000 if married. Not included are personal and household effects, prepaid burial plot, or cash surrender value of each person's life insurance up to $1,000. This latter provision may be waived by the county agency administering the plan.

The above-named benefits are available to the recipient after he has obligated himself to pay the first $200 of his health care bills in the preceding 12-month period. Health insurance premiums are included in the $200 deductible, and the insurance benefits are applied to the health care costs of the individual beneficiary before the remainder of his bill is paid by the administering agency. Again, the agency may waive the $200 deductible if it causes undue hardship on the recipient.

One now asks, How are the other 62 percent of the senior citizens going to pay for their care? We believe that guaranteed renewable private and nonprofit health insurance will take care of their needs.

Minnesota Blue Cross began selling two new health plans tailored exclusively for senior citizens over age 60 in January 1963. The first, known as series 60 plan A, is a $25 deductible program which pays $10 per day for room and board for 30 days every 6 months. The following hospital services are covered in full, less the deductible: operating room service, anesthesia when administered by a salaried employee, X-ray, clinical laboratory service, pathological laboratory service, electrocardiograms, physical therapy, oxygen therapy, dressing and plaster casts, drugs, biologicals, etc. The premium is $96 per year.

Plan B of the 60 series is a 75-25 coinsurance plan entitling the subscribed to 70 days of hospitalization every 6 months. All hospital services enumerated above are covered as well as daily room and board in a 2-or-more-bed room. Outpatient care is covered if the patient is admitted to the hospital within 24 hours after the accident. Nonacute care is covered if the patient enters such a facility within 72 hours after discharge from a confinement of at least 5 days or more in an acute hospital. The premium for this plan is $150 a year.

Minnesota Blue Cross has always provided coverage to all persons through group plans or individual contracts when enrollment occurred before the age of 60. Individual contracts are guaranteed renewable beyond the age of 60. A member of a group plan who reaches retirement age may elect to continue protection under the plan for a period of 3 months. The benefits of this coverage provide up to $15-a-day room rate for hospital care or an 80-20 coinsurance plan, depending on the amount of benefits he had in his group plan. At any time during the 3-month conversion period, the retiree may choose to continue to receive protection by subscribing to a new contract on a 80-20 coinsurance basis.

More than 65,000 Minnesotans are covered by the two 60 series plans, the 80-20 coinsurance plan, and the other conversion programs provided for group contract retirees. There are many more thousands over age 65 who are still working and covered by group contracts.

Other health care plans.-The basic senior citizens contract of Minnesota Blue Shield is in its fourth year of operation. It has had fine acceptance in the State. Prior to the over-65 plan, Blue Shield subscribers converted their regular Blue Shield contract upon retirement to a nongroup contract. The cost was increased because the plan was of the nongroup type. Now a person who wants a noncancelable physician plan and did not have one before age 65, or a person who wants to convert his group plan upon retirement to a senior citizen contract may do so. Over 9,960 have subscribed to the senior citizen contract.

The doctors in Minnesota who service the Blue Shield's new senior citizen plan will provide physician services at no additional cost to all individuals age 65 and over whose income is $2,400 or less and couples whose income is less than $3,600 annually. An individual's net worth may be $20,000 or less and a couple's $30,000. If a senior citizen has more income or net worth than mentioned above, the physician can charge him over and above the benefits paid under the plan. The plan costs only $35.40 a year.

Blue Shield has a hospital expense rider plan for senior citizens, but few have taken advantage of it. It provides for 90 days of hospital room and board plus 60 days of nursing home care. The aged person may purchase a $10- or $15-a-day room and board plan and the nursing home benefits are $10 a day. The plan will pay for 80 percent of the total ancillary hospital costs. Premiums are $8.85 a month for the $10-a-day plan and $10.51 for the $15 one.

Hence, Blue Shield and its hospital rider plan can provide full-service physician benefits, as well as 90 days of hospital care and 60 days of nursing home care at $15 and $10 per day, respectively, for a premium of $170.40 a year.

Nearly 40,000 Minnesotans over 65 have a nongroup Blue Shield plan and many thousands more are covered by a group contract.

Private health insurance has continued to expand in Minnesota. There are 41 companies now writing guaranteed renewable policies for the aged. Nationally, 3 companies alone write policies for 2 million people over 65. In 1961, 9.3 million of the 17 million Americans over 65 had some form of health coverage.

The Taves senior citizens report noted in 1960 that 60 percent of the persons interviewed had hospital insurance and that in the metropolitan area where hospital costs are much higher, 71 percent had such coverage. Over 50 percent had medical and surgical coverage. It should be noted that this survey was done before the Blue Shield and Blue Cross plans mentioned above were available. Minnesota's old-age assistance program is one of the best in the Nation. In the fiscal year ending June 30, 1963, $32,656,679 was spent on medical care for Minnesota's old-age assistance recipients. Hospital and physician costs continued to decrease while nursing home costs have increased. The reason for the decreasing hospital costs while nursing home costs went up lies in the fact that more nursing home beds are now available to care for patients who do not need intensive hospital care. Actually, nursing home costs increased by $5.3 million over the previous year, and a major factor was the release of many of the State's institutionalized patients to nursing home care. Often these persons are senile but do not belong in the State mental hospitals where they have been under custodial care for many years.

Old-age assistance recipients in Minnesota receive comprehensive benefits and have free choice of vendor. In 1963, the average monthly caseload was 43,139 persons over age 65 receiving aid under this program. Almost 61 percent receive medical care at some time during the year, and 59.1 percent of the total money spent for old-age assistance will be for health care.

The OAA health care dollar was divided as follows, as of June 30, 1963:

[blocks in formation]

Hence, in Minnesota, the senior citizen can purchase excellent health care coverage at nominal rates, and those who cannot afford such rates can receive comprehensive care under the old-age assistance or the new Minnesota medical assistance to the aged programs.

The wealth of the Minnesota senior citizen

The 1960 Taves sudy pointed out that over half of the persons interviewed had a net worth of $10,000 or more. Forty-nine percent stated they had enough income to live on comfortably; 35 percent had enough for subsistence only; and 16 percent did not have a living income. Under the Minnesota assistance to the aged plan, 38 percent can receive complete health care.

In a late 1963 population report of the U.S. Department of Commerce, Bureau of Census, it is pointed out that 91.8 percent of the families whose head was 65 or over had an income of over $1,000. In fact 27.7 percent had incomes over $5,000. The median income of these families was $3,382 annually.

The November 1960 Monthly Labor Review stated that an adequate budget for a retired couple in Minneapolis in the autumn of 1959 was $3,135. This would indicate that aged Minnesotans who receive the national median income of $3,382 would have more than enough to live on. Included in the retired couple's budget mentioned above was $315 for health expenses. The Hennepin County Welfare Department figures a minimum budget is $1,854 annually for a couple. In the Taves report, it was pointed out that 25 percent of the persons interviewed had spent up to $49 that year for health needs, 59 percent less than $200 and only 5 percent paid over $500 for such care. It is interetsing to note that while some persons stated they needed care and that the care was too expensive for them, many did not know that free care was available to them. The survey pointed out that 45 percent of the aged did not know that the public health nurse was available to help them. About 34 percent said that they never, rarely, or seldom used the public health nurse in their communities.

After reviewing these statistics in Minnesota, we can conclude that the average aged citizen does have enough to live on; his health bills are reasonable; he does have health care facilities available for him to use, but he does not know about them. In most cases his home is paid for, his children are grown, and his living costs are about $3,000 a year.

How do Minnesotans pay for hospital bills

A study has been made over the last 4 years of hospitalized patients in a rural Minnesota hospital. This hospital has 41 beds and 10 bassinets. Of the total admissions during the 4 years, 17.3 percent were over 65 years old and of that group, 16.2 percent were admitted for surgical operations and 83.8 percent for medical conditions.

Over three-quarters of the patients over 65 paid their bills from private resources, including insurance payments, and less than one-fourth of the bills were paid by government programs. Each year the number of persons who had all or part of their hospital bill paid by insurance has increased. In 1960, 33 percent of the aged had insurance coverage. By 1961, the percentage increased to 40 percent, in 1962 it was 47 percent and by 1963 over 54 percent had coverage. During the 4-year period, 88.8 percent of all persons hospitalized over 65 received bills that under under $500 and only 4 percent spent over $1,000.

The most important point in this study, as it relates to financing health care under the social security system, is that by February 15 of each ensuing year year only 2.9 percent or 39 people had not paid their hospital bills in full. Just a little over 1.1 percent or 15 people in the group had not made any payment at all on the account.

Another study was completed in late 1963 in the Minneapolis-St. Paul hospitals. This study showed that the average length of stay in the hospital was 7.9 days, the average bill per stay was $338.71, and the average bill charged per patient day was $42.84. The report noted that age, sex, locality, day of the week, etc., had an effect on the average length of stay.

Persons over 65 showed an average length of stay of 11.2-14 days. This is more than the overall average noted above. It was interesting to see that the longer the stay, the less the per day cost. The person who stays 14 days had an average per day cost of $39.56. The study further noted that "those over 65 are most significantly different in degree (from other age groups), but not so much in kind." The report stated that after age 30, the average bill charge per stay increased with age but at a nearly constantly decreasing rate.

The Twin City hospital study pointed to the fact that older people pay their hospital bills faster than any other age group. The study, which included 11,029 discharges from the 25 short-term general hospitals, was a 5-percent probability sample. "Grandma and grandpa-at whatever age 50 and above you chooseare the lowest nonpayers of their bills in both percentage by number and percentage by amount," the reports stated.

The age group of 20 to 29 accounted for the largest group of persons who did not pay their hospital bills. Over 6.71 percent of old billed charges from this group remained unpaid at least 6 months after discharge. In addition, their average bill is one of the lowest for any age group.

The Hennepin County Community Council's 1963 survey revealed that in a 60-day period, 17 percent of new admissions for all clinic services at the Minneapolis General Hospital were for persons 65 years and over. This would indicate that over 80 percent of the charity and emergency cases in Hennepin County involve younger persons.

All these studies show clearly that senior citizens in Minnesota can and do pay their hospital bills. Two of the studies indicate that younger couples seem to have a more difficult time paying these bills. Yet under the social security method to finance health care, the Government will tax the young couple and provide "free" health service to the aged. It is obvious that most older people do have the means to care for themselves and they want to do so. Comparing the Minnesota medical assistance law with the King-Anderson bill, one of the suggested methods of financing health care under social security 1. Who would be covered?-Under the Minnesota medical assistance to the aged program, 140,800 persons over 65 will receive comprehensive health services. The King-Anderson bill will provide institutional health benefits to 370,000 or nearly all of Minnesota's aged.

2. What benefits would the people receive?-We have already noted that benefits under the Minnesota medical assistance to the aged program would be comprehensive. As the committee knows the King-Anderson benefits would constitute partial institutional care, plus some home health services and outpatient diagnostic services.

In other words, after a small deductible, the King-Anderson benefits provide for the first 45, 90, or 180 days of hospital care in a benefit period. What happens to the patient who has an acute condition and uses up the 45, 90, or 180 days? If he doesn't have the money to pay for the health care, he must seek public relief.

The Minnesota medical assistance to the aged plan asks the recipient to pay the first $200 of health care in any 12-month period if he has it and after that, all remaining health care is paid in full. If he does not have the $200, he can still have full health care coverage. This is set up as a "catastrophic" plan, because this is the type of health care insurance the aged need. Unless indigent, most persons over 65 can pay the first $200, but many cannot pay the next $200, $400, or $600 for their care.

The Hennepin County study showed that "Persons over 65 can expect an incidence of illness of 1.6 acute conditions per person per year, as compared with an incidence of 2.2 acute conditions per person per year among people 25 to 44. In the area of chronic or long-term illness, however, only 22 percent of those over 65 are entirely free from chronic health conditions, as compared

« PředchozíPokračovat »