We join in endorsing your statement of opposition to H.R. 4222.

MAURICE W. SCOTT,

Executive Secretary, Taxpayers' Federation of Illinois.

Will appreciate your listing our association as joining with your organization in opposition to proposed medical care program under social security.

CARLTON W. TILLINGHAST,

Executive Director, New Jersey Taxpayers Association.

This authorizes inclusion of Kentucky Committee on Taxation among those endorsing medicare statement to Ways and Means.

RAYBURN WATKINS,

Secretary, Kentucky Committee on Taxation.

The Montana Taxpayers Association is in full accord with your excellent statement in opposition to the administration's social medicine proposal (H.R. 4222). Please enter our approval of your statement in the printed record. We commend you for presenting the taxpayers' viewpoint in Washington.

S. KEITH ANDERSON,

Executive Secretary, Montana Taxpayers Association.

The Florida Taxpayers Association appreciates your presentation of the taxpayer's viewpoint in Washington and we approve your factual statement in opposition to the administration's social medicine proposals. Please enter our approval in the printed record.

ROBERT L. NEWMAN, Jr.,

Executive Director, Florida Taxpayers Association.

I endorse the statement you have prepared regarding H.R. 4222. May I suggest the following addition to your statement: Voluntary health insurance in the United States is growing by leaps and bounds. According to Insurance Economic Survey in 1960 some 132 million Americans or 73 percent of the total civilian population had health insurance at the close of the year. This is an increase of 4,100,000 persons over the 1959 figure. All told $5.7 billion in insurance benefits were paid out in 1960 according to the same authority. M. H. HARRIS,

Executive Secretary, Utah Taxpayers Association.

Wholeheartedly approve and endorse your statement to House Ways and Means Committee regarding H.R. 4222.

RAY EDWARDS,

Executive Secretary, Iowa Taxpayers Association.

Count us in on the endorsement of your statement before the House Ways and Means Committee relative to the King bill.

JOHN R. GRAFF,

Secretary, Greater South Dakota Association.

The New Hampshire Taxpayers Federation heartily concurs in your statement in opposition to H.R. 4222.

BARRY T. MINES,

Executive Vice President, New Hampshire Taxpayers Federation.

Mr. STAHL. In addition to the above telegrams I also have a verbal endorsement of this statement from Donald Jackson, executive director of the Tennessee Taxpayers Association.

And, I also understand that the Missouri Public Expenditure Survey and the Texas Research League are planning to submit statements of their own.

I appear before you today as a witness opposed to the legislation under consideration which seeks to commit the Federal Government to a program of providing medical care for all persons eligible for social security benefits regardless of need.

Certainly, we cannot deny or ignore the necessity of providing good medical care for all American citizens, regardless of age or income.

I am old fashioned enough to believe that this responsibility rests first with the individual; second, with the family unit; third, with voluntary private charity organizations; and, as a last resort, with compulsory public charity.

As an example, I sincerely believe that financially able adult children have a moral obligation to care for their parents. I do not believe this moral responsibility can be met by transferring it to a governmental agency-which is exactly what too many American people are doing or seeking to do today.

In this connection, so far as I know, in all the surveys and studies published by both those who support and those who oppose this legislation, no attempt has been made to determine the ability of adult children to provide medical care for parents who are unable to provide such care for themselves.

I suspect that such a study, plus a return to family responsibility, would quickly reduce this medical care mountain to a molehill.

However, regardless of the size of the problem, we already have a governmental program by which to provide medical care for those who actually need it. I refer to the Kerr-Mills bill, which was carefully drafted by the distinguished chairman of this committee and Oklahoma's senior and equally distinguished Senator, Bob Kerr.

Our State welfare director, Mr. Lloyd E. Rader, informs me that this program is meeting our needs in Oklahoma in a satisfactory manner. Since it is meeting the problem in Oklahoma, there is no reason why it cannot effectively meet the needs in the other 49 States.

At least this program deserves a reasonable time trial before being replaced by the plan which is being considered here:

A plan which by no stretch of the imagination, can or should be labeled as a prepaid medical program.

A plan which limits coverage to those who are eligible for social security benefits, regardless of need, and makes no provision for those not on social security who may be in dire need of assistance.

A plan which commits the Federal Government to a program, the cost of which can only be a matter of conjecture, but which is certain to exceed original estimates by many billions.

A plan which will open the door to the same abuses and chiseling which are now prostituting efforts to care for our less fortunate citizens in almost every facet of our present social security program.

In case there is any question about these last two items, let us look at the record.

With regard to cost, when the social security law was passed in 1935, it was estimated that benefit payments in 1955 would amount to less than a billion dollars. However, actual payments were over $5 billion, or nearly six times the original estimate. Again in 1943, social security actuaries estimated benefit payments in 1957 would total $1.2 billion, but they actually amounted to more than $7 billion. Is there any reason to believe that a medicare program under social security would not follow the same pattern?

With regard to abuses, I need only point to the aid-to-dependentchildren program, which can only be classified as a national disgrace. This program was originally designed to keep families together in homes in which the breadwinner was either dead or incapacitated. Today, less than one-third of this billion-dollar-a-year program is spent for this purpose; more than two-thirds is spent to provide for children deserted by their fathers, living in broken homes, or born out of wedlock.

The Department of Health, Education, and Welfare predicts this situation will worsen in the future and, regrettably, it has successfully resisted efforts by a number of States to curb these abuses.

You may also recall that the old-age assistance program was to be operated only long enough for the OASI program to become fully effective. However, in December 1946, there were 2,195,806 persons on OAA as compared to 2,318,128 in March 1961.

Another major objection to this legislation is that it will increase the burden of Federal taxation which is already bleeding the poor as well as soaking the rich. This proposed tax increase would impose an additional hardship on the Nation's wage earners, who are already paying more in taxes than they are for food, clothing, and medical

care.

Mr. Chairman, in conclusion, I contend the greatest favor we can extend to the people this legislation seeks to help is to preserve the purchasing power of their dollars, dollars they already have. In order to do so, we must stop fanning the fires of inflation with Federal spending fans.

Perhaps the most compelling question which must be considered by this committee and the Congress as a whole is the total amount of responsibility the Federal Government can assume in providing for its citizens without impairing its ability to protect our Nation and preserve our freedom in this chaotic world.

There will be no security-and very little medical care for any of us in a bankrupt or vanquished America.

Mr. Chairman, I thank you for permitting me to present these views for your consideration.

The CHAIRMAN. Mr. Stahl, we thank you, sir, for bringing to the committee your views. We appreciate your coming from the State of Oklahoma to do so. Any questions of Mr. Stahl? Thank you, sir. Dr. Humiston!

STATEMENT OF HOMER W. HUMISTON, M.D., WASHINGTON STATE MEDICAL ASSOCIATION

Dr. HUMISTON. Mr. Chairman and members of the committee, I am Dr. Homer W. Humiston of Tacoma, Wash. I am appearing here today as president of the Washington State Medical Association. I am also the full-time medical director of the Pierce County Industrial Medical Bureau, a physician-sponsored organization which furnishes medical and hospital services to the public on a prepaid service plan basis.

Those of us who have been actively associated with prepaid medical care in the State of Washington have had some experience which may be of benefit to the members of this committee in considering H.R. 4222.

Specifically, I should like to cite our experience with respect to:

(1) The trend of demand by persons covered by medical care plans; and

(2) The effect on the quality of medical care when medical care is furnished in kind by government.

In the State of Washington a significant segment of persons covered by prepaid medical care plans are enrolled in the several county medical bureaus. These bureaus are physician-sponsored nonprofit organizations which furnish medical care on a service basis, by which is meant paid for in full, and with free choice of physician by the patient. The bureau in Pierce County is representative of similar operations throughout the State, and happens to be the oldest one, having been established in 1917. The Pierce County Bureau covers 67,000 persons, 21 percent of the population of the county. Statewide coverage by bureaus is of this same order through the several county bureaus.

In the early years the coverage offered by the Pierce County Bureau was very limited, and was furnished for a monthly charge of less than a dollar. This payment was a realistic charge for the limited coverage furnished. The reason that the coverage was so limited was that the subscribers were willing to pay only for that amount of care. subscribers had experience with prepaid medical care, their desire for broader coverage developed along with an understanding willingness to pay the necessary increase in monthly premium. We now provide quite comprehensive coverage to most of our subscribers.

This process of evolution from quite limited coverage to more comprehensive coverage is not unique to Pierce County. It has also been the experience of everyone I know of engaged in providing prepaid medical care.

In our State the recipients of medical care furnished in kind by government under our welfare programs have constantly pressed county commissioners, and in recent years the State legislature for more and more comprehensive care, which care, of course, is paid for out of tax funds.

In the case of the bureau operation we are dealing with persons who correlate their desires for coverage with their own willingness to pay the cost. The decision as to the level of coverage is made in this instance by the individuals or groups covered, and is fully under their control.

In the case of recipients of medical care paid for out of tax funds, there is no such correlation. This lack of correlation, however, does not reduce the pressure for more comprehensive coverage under the tax supported program. The decision as to the level of coverage is made in this instance by a legislative body either by enumerating benefits or by establishing a budget.

I am sure that the attitudes of the people in the State of Washington are representative of those in all these United States, and that any program either financing medical care or furnishing medical care in kind will be under constant and quite possibly irresistible pressure in the direction of more comprehensive care. We have observed this for decades and believe this point to have been adequately demonstrated.

In my opinion the most important question before this committee and the Congress is the long term implications of embarking on a program of limited medical care furnished in kind by government, as proposed in H.R. 4222. Our experience in the State of Washington pretty well demonstrates that the real issue is whether or not medical care furnished in kind to the whole population is the way to achieve the best quality of medical care for the people of this country.

At this point I should like to relate some observations we have made in the State of Washington with respect to the effect on the quality of medical care of a program through which medical care is furnished in kind by government.

In our State we have now, and have had for some years, a quite comprehensive plan for furnishing medical care in kind paid for by government. Under the program which I refer to medical care is furnished to the needy and near needv. We are of the belief that this program is one of the most comprehensive in the country. Close association with the administration of this program enables us to observe an actual practice the effect of regulation on the quality of medical care.

Medical care furnished in kind by government is purchased by the State

for providing for needed medical, dental, and allied services to recipients of public assistance and medical indigents *** (R.C.W. 74.09.030).

The medical care section of the Washington statutes is found in the Session Laws of 1959 (R.C.W. 74.09.010 through 74.09.900). In this chapter the division of medical care is charged with takinginto consideration the appropriations available (R.C.W. 74.09.090) The law further provides that

The assistant director in the exercise of his administrative responsibilities shall:

(1) Prepare and submit to the director rules, regulations, and procedures for the exercise and performance of the administrative powers and duties vested in or imposed upon him not inconsistent with the law.

Such rules and regulations have the force of law when appropriately processed and approved by the director of the department of public assistance.

Submitted herewith are two documents as exhibits. These are examples of government regulations which, in our experience, definitely result in the lowering of the quality of medical care. The exhibits are: