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Mr. MYERS. Well, with a base of $6,000 and using up to the full 10 percent of the combined employer-employee rate, you could have a program, for example, of 30-day maximum with a 2-day deductible, and with some nursing home benefits.

Senator DOUGLAS. What about practical nursing?

Mr. MYERS. Or home health services. I don't know whether they would be practical nurses, or registered nurses.

Senator DOUGLAS. They don't have to be registered nurses to be effective. They could be under the supervision of nurses, but the nursing would not have to be done by registered nurses. That is

pretty expensive.

Mr. BALL. Senator, could I point out one thing on the wage base that you are exploring?

One possibility is that you might put in a $6,000 wage base for 1965 right away, which actually is the amount that would be needed if one were to restore the situation that existed in 1958, the last time the Congress acted, and then taking into account the trend of wages Senator DOUGLAS. There has been an increase of roughly 25 percent in wages since that time.

Mr. BALL. And if you made a projection on wages, $6,600 would be the comparable figure in a few years. If the law were to provide later for $6,600, not right away, but in a few years when wages would have risen to that level that two-step approach, with contribution rates of 5 and 5, or a combined rate of 10 percent these, together, are sufficient to support the benefits of the King-Anderson bill.

Senator DOUGLAS. I don't want to steal Senator Ribicoff's thunder, but it is well known that he has informally made a suggestion, not as an alternative to King-Anderson, but as a second line of defense for King-Anderson-namely, to give to the insured person the choice as to whether they will take the increase in benefits or accept some form of hospital and nursing care. I take it that you said that was your second choice also, Mr. Secretary?

Secretary CELEBREZZE. Yes, sir.

Senator DOUGLAS. Have you worked out cost figures for such a limited plan, assuming a maximum of, say, 60 days of hospital care and a corresponding cut in nursing care, home service care?

Secretary CELEBREZZE. We can work those figures up for you. We don't have them available right now.

Senator DOUGLAS. And you will work in cooperation with Senator Ribicoff?

Secretary CELEBREZZE. Yes, we'll be happy to.

Senator DOUGLAS. This would give freedom of choice to the individual as to how they wished to take their benefits, whether in cash or in hospital and nursing care.

Secretary CELEBREZZE. Yes. The individual could determine whether he wanted to take the cash or be covered under the hospital care provisions of the act. He would have a choice.

Senator DOUGLAS. This is a question which perhaps might more properly come from Senator Ribicoff. I hope you will forgive me. Senator RIBICOFF. I am delighted that you have entered this discussion, Senator.

Senator DOUGLAS. At what point in an insured person's life would he exercise this choice?

Senator RIBICOFF. Sixty-five.

Secretary CELEBREZZE. Sixty-five.

Senator DOUGLAS. Sixty-five? Could the choice be revoked or altered after 65 ?

Senator RIBICOFF. It has to be at 65 once and for all. He couldn't change it.

Senator DOUGLAS. It would simplify administration very much. Senator RIBICOFF. Yes, it would.

I think, to keep the record clear on this, since you brought it upand if I may proceed, Mr. Chairman-it is not my intention to offer my proposal at this time because I am basically for the King-Anderson bill and shall fully support it on the floor. However, should the King-Anderson bill run into difficulty, then in all fairness and candor, I would say to you, Mr. Chairman, that I would offer my proposal as a second line of defense, because I am deeply concerned as indicated by the line of questioning with the Secretary as a result of Senator Williams' proposal, that should the Mills bill become the law of this land, then for all practical purposes, for the next decade, we would not have medicare. Personally, I think medicare is so important that this fight must be made, and we should not use up the precious balance of what we have left, and I say that we can use it in a very, very tight tax situation.

As I told the committee, I have this proposal, but I would not offer it now because I am for King-Anderson and will only offer it if King-Anderson does not prevail on the floor of the Senate.

Senator SMATHERS. Would the Senator mind if I asked him a question?

Senator RIBICOFF. Please do so.

Senator SMATHERS. In the light of what the Senator has said, presuming that the King-Anderson bill, as you express it, ran into trouble on the floor and was not adopted, and thereafter the Ribicoff amendment ran into trouble on the floor and was not adopted, would your position then be that you would oppose the Mills bill?

Senator RIBICOFF. Yes, I would. I think the Mills bill gives the old people of this country a "mess of pottage." I think the Mills bill is a snare and a delusion. I think it is a tragedy to use up these precious few pennies that we have to give an aged woman 80 cents a month, and I think the American people must be alerted to what they are using up out of the precious resources of the social security tax base.

I was disappointed in the Secretary's proposal, or in his answer because, contrary to the Secretary's position, I would oppose the Mills bill if the Mills bill was all that we had. I think that we must make a fight to save these precious few pennies for health care for the aged under social security.

Senator DOUGLAS. I would like to make just one other comment. and get the Secretary's opinion on it, and that is about nomenclature. The term "Medicare," I think, was attached to the bill when it was sponsored by Representative Forand. Up to that time is it not true that the bill included not only hospital nursing care but medical and surgical care?

Secretary CELEBREZZE. Just surgical care.
Mr. COHEN. Only surgical care.

Senator DOUGLAS. Only surgical care, not medical care.

But it did have an element of doctors' services and, therefore, could properly have been called medicare.

Now, the King-Anderson bill has been stripped of surgical care. In the interests of correct understanding, wouldn't it be correct to refer to it as "health care for the aged" or "hospital and nursing care for the aged," so that we will not overstate our case?

Secretary CELEBREZZE. That is right. We don't call it "medicare," we call it "hospital insurance for the aged."

Senator DOUGLAS. But it includes nursing home care and home nursing as well.

Secretary CELEBREZZE. Yes; and the King-Anderson includes home care as well, yes.

Mr. BALL. I think, Senator Douglas, that the term "hospital" is used simply because the hospital benefit is the central benefit, and in the King-Anderson benefit provisions the other benefits are less expensive substitutes for hospital care. But perhaps the name ought to be longer to make sure that people understood that there was nursing home care in it, too.

Senator DOUGLAS. I would use "hospital and nursing care for the aged."

Also, I wondered if you would comment about this observation of mine, that there may be an undue concentration upon hospital care in the bill. Hospital care, of course, is the most expensive form of care that there is, but nursing home care is less expensive, and practical nursing in the home is still less expensive. There are a great many aged people who are somewhat incapacitated, semisenile. To put them in hospitals, although they may prefer to be there, is a very expensive proceeding. In many cases, they could be taken care of in their own home with a practical nurse under skilled supervision coming in once a day, to get them through the day.

I wondered if these gentlemen would be willing to comment on the emphasis within the proposed system. Should there be more in the direction of nursing home care and practical nursing in the home as compared to hospital care. Have you thought of that at all?

Mr. BALL. I think, Senator, that the reason that the hospital benefit was the one that was selected was really because of the same line of reasoning that Senator Long was questioning us about earlier, and that is that the people who have a heavy medical cost to bear in a given year that they can't absorb into their regular budget-as selfinsurers, you might say-are usually the people who have a spell of hospitalization.

I might just give you a few figures on that for the record, Senator. If you take couples in the United States over 65, those who have no hospital experience during a given year have, on the average, total medical costs of $233. But if they have a spell of hospitalization, then the average for them for all of their medical care is $1,220, of which about half is the actual hospital expense.

Comparable figures for single people are, if they are not in a hospital, $131, and if they go to a hospital, $1,038.

So the main philosophy, in this package of proposals was to select the situations in which people would have big and unpredictable expenses and then cover a major part of those expenses.

Senator DOUGLAS. In other words, this more closely approached the catastrophic situations?

Secretary CELEBREZZE. Yes.

Senator DOUGLAS. Well, this is perhaps a matter for administration. But I was distressed in going over the estimated costs of KingAnderson to find that so small a fraction, a very small fraction, of the total cost was allowed for nursing in the home. Could not the administration of this measure be directed to hurry the exit of people from hospitals into nursing homes, and from nursing homes into practical nursing. This is the tendency in hospital administration now. In the old days, people used to go to the hospital and stay a long time. Now the effort is made to get them out of the hospital as quickly as possible. But the exit is delayed, of course, in the case of hospitals that would like to hold on to them because they are paying guests.

Mr. COHEN. Senator, I think we had the same colloquy when you were here a couple of years ago. In the meantime, of course, the administration did send up a proposal, which has now passed both Houses, to increase Hill-Burton grants toward long-term care facilities by $30 million. In other words, we found it necessary, in order to accomplish the purpose, to build more of these facilities, because obviously you can't use the services if you don't have the facilities. Senator DOUGLAS. I know. But then, you have got to have some means of paying for the care for the people in the nursing homes. Mr. COHEN. That is correct.

We do have provision for nursing home care, as we pointed out in the bill. We agree with the objective that you have in mind, and we have tried in the interim to provide more facilities and to increase provision for visiting nurse services in the bill.

Senator DOUGLAS. Well, I am still somewhat appalled by the distribution of costs within the King-Anderson system, that is all.

Mr. COHEN. I would say one other thing: Of course, there still is not an adequate amount of home nursing services available in the United States.

Senator DOUGLAS. But if you provide the financing for it, you will get the services provided.

Now, one of the things which developed, of course, in the war, was that you could take unskilled youngsters and make them into hospital orderlies in a relatively short period of time. They would operate under the direction of registered nurses, but the registered nurses themselves would do very little actual nursing. The corpsman, in effect, would do the major portion of the physical work, but under skilled supervision.

I think you can take a large number of women and makes them nurses' assistants, and this would be must less costly than if you tried registered nurses doing all of the work.

Mr. COHEN. That is correct. And we have, for instance, for the vocational education bill, attempted to expand the whole training of practical nurses, which I think fits into your idea.

I think there are two parts to the problem. There is a provision for the education and training of the manpower and womanpower necessary, and then a financing arrangement to pay for the services, which is, in principle, embodied in the bill.

Senator DoUGLAS. I don't think you have made enough allowance, if I may say so, in the allocations for either nursing homes or nursing

in the home. I would be willing to see the hospital provisions cut down and funds thrown over to the other two branches of the system. That is all, Mr. Chairman. Thank you.

The CHAIRMAN. Senator Carlson?

Senator CARLSON. Mr. Secretary, 29 years ago, in 1935, I was a member of the House of Representatives, and we passed the original Social Security Act. I well remember some of the debates and I remember the $3,000 base figure.

I have followed with great interest the program as it has gone through these years, and I think for the record we ought to have the various basis for the number of increases during these past years, for the increase in rates and also the increase in benefits. I think it would be helpful for the record when we get into it. I am sure you can supply it.

Secretary CELEBREZZE. Yes; we will supply it for the record.

(The following pamphlet was subsequently supplied by the Secretary :)

THE HISTORY OF THE SOCIAL SECURITY CONTRIBUTION RATES AND THE LIMIT ON TAXABLE ANNUAL EARNINGS

The Social Security Act of 1935 fixed the contribution rates for employees and their employers at 1 percent each on taxable wages for the calendar years 193739, and scheduled the rates to increase by steps to 3 percent each in 1949. However, subsequent acts of Congress extended the 1-percent rates through calendar year 1949. On January 1, 1950, the rates rose to 12 percent each for employees and employers, as provided by the Social Security Act Amendments of 1947. In accordance with the Social Security Act Amendments of 1950, the 12-percent rates remained in effect through calendar year 1953, and, on January 1, 1954, rose to 2 percent each for employees and employers. These rates remained in effect through December 31, 1956. In accordance with the Social Security Amendments of 1956, the 2-percent rates rose to 24 percent each on January 1, 1957, and remained in effect through calendar year 1958. On January 1, 1959, the rates rose to 21⁄2 percent each, and on January 1, 1960, to 3 percent each, as provided by the Social Security Amendments of 1958. These rates remained in effect through December 31, 1961. In accordance with the Social Security Amendments of 1961, the 3-percent rates rose, on January 1, 1962, to 3% percent each for employees and employers, and on January 1, 1963, to 3% percent each. Beginning January 1, 1951-the effective date of extension of coverage to selfemployed persons-the rates of tax on self-employment income have been equal to 11⁄2 times the corresponding employee rates, except that beginning in 1962 the resulting rates for the self-employed are rounded to the nearest 10th of 1 percent. The tax rates that have been in effect since 1937 and the maximum amount of annual earnings to which the rates applied are shown in the following table:

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