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the millions of old people (and those concerned about their health problems) of taking a cold or know-nothing attitude toward the issue is likely to be in serious trouble this election year.

One thing about the issue is clear: Although plenty of politicians may see it as a vote-catching device, there is nothing synthetic or phony about the problem. Everyone who has seriously studied the situation has concluded that the provision of better health care for the aged is a serious and growing problem. Thanks to medical progress, the number of aged is increasing rapidly. In 1930, there were 6 million people over 65 in the United States; today there are 16 million.

For far too many of these, long life has meant shrunken incomes, increased sickness, loneliness, and the shame of being a candidate for a handout from society. Health, Education, and Welfare Secretary Flemming, in his thorough report to the House Ways and Means Committee last year, concluded that three out of every four aged persons would be able to "prove need in relation to hospital costs." That is to say, they would be able to prove that they simply could not afford to pay for the care they needed when taken seriously ill.

The issue, then, is not whether there is a problem but rather how to meet the problem.

TWO APPROACHES

Representative Aime Forand, Democrat, of Rhode Island, has proposed to deal with it through a system of compulsory Federal insurance within the framework of the Social Security Act. The Forand bill would provide insurance covering 60 days of hospital care, or 120 days of combined hospital and nursing home care, together with surgical services, to all those eligible for old-age insurance benefits. It would be financed, initially, by boosting social security payroll taxes one-half of 1 percent, divided equally between employees and employers.

The Forand bill has been attacked for a number of reasons by various groups, especially the American Medical Association, which sees it as the camel's nose of socialized medicine coming under the tent.

But the main weakness of the Forand bill, as specialists in the health field see it, is not that it does too much but too little. They condemn it as too narrow and as an encouragement to "hospitalitis"--the tendency, inherent in many of our present voluntary insurance programs, to put the sick into hospitals because there are no provisions for covering treatment at home or in doctors' offices.

The bill sponsored by Senator Javits, Republican, of New York, strikes at this weakness. As Javits points out, though hospitalization costs comprise a large part of an aged person's annual medical bill, the average older couple spends $140 a year on health costs unrelated to hospitaliaztion. "One out of every six persons 65 years and older," says Javits, "pays over $500 in medical bills annually." Yet 60 percent of the old people have annual incomes under $1,000 and can't afford home or office care that might cut down the length of hospitalization or eliminate it altogether.

Javits would deal with the problem by a voluntary program that would combine Federal and State subsidies, contributions sealed to income by the aged themselves, and both commercial and nonprofit insurance companies such as Blue Cross and Blue Shield. The program would not become operative in any State until the State put up the money, arranged with the insurance carriers, and agreed to certain standards for the program.

Although the Javits bill makes a hard effort to provide a voluntary (and heavily subsidized) program, it does not appear to meet the test of practicality. The program would take a very long time to negotiate with 50 individual State governments and with the insurance carriers-assuming that it would be possible at all to get them involved in a program whose costs are unpredictable. Indeed, after studying Flemming's able report, and the arguments on all sides of this issue, we are forced to conclude that the voluntary approach simply will not do the job.

The problem basically is that the aged are high-cost, high-risk, low-income customers. Their health needs can be met only by themselves when they are young or by other younger people who are still working. The only way to handle their health problem, therefore, is to spread the risks and costs widely. And that can best be done through the social security system to which employers and employees contribute regularly. By comparison with the heavily subsidized schemes, this approach has the advantage of keeping old people from feeling that they are beggars living off society's handouts.

We do not pretend to know all the answers to the problem of enlarging the social security system to include a health insurance program for the aged. Even a modest study of the problem immediately convinces anyone of its difficulty. and complexity. At this point, we don't think that the complete answer to it has emerged.

Nevertheless, no democratic government can refuse to grapple with a problem of such demonstrated urgency and importance. The issue cannot be evaded and, before it becomes a political football, the politicians of both parties should accept responsibility for finding the best possible answer in the shortest possible time.

[From Life magazine, Apr. 25, 1960]

AGE, HEALTH, AND POLITICS

The hottest political potato so far in this election year is this question: Are Americans over 65 entitled to Federal help to meet their hospital and doctor bills?

The Forand bill, which would raise $1 billion for such care by a one-half of 1 percent boost in the social security tax, has produced floods of favorable mail and given the Democrats an unexpected issue. Republicans, while granting the need for aid, are trying to find a more private, voluntary alternative. Since the issue is important, let's try to separate its social realities from its politics and facts from principles.

Unquestionably, many older Americans (15.8 million are over 65) are in real need. The average $72 a month they draw from social security scarcely provides food and shelter, much less for the medical expenses which increase with age. Few are in a position to meet the cost of chronic illness from which many suffer. Yet even to get charity care-itself inadequate in quantity and often inferior in quality-they must suffer the indignity of a pauper's oath.

Can their need for medical aid be provided by private, voluntary Blue Crosstype plans? These are expanding, but can never meet the whole need. Premiums for the aged as a separate group are prohibitively high. The least burdensome method of insurance is for the whole society to spread the costs over the whole working life cycle. The cheapest and most logical way of doing this, whether by the Forand bill or a better one, is by extending the existing system of social security.

To provide this aid need not be socialized medicine, as opponents claim, since payments could be made through private channels and patients select their own doctors and hospitals as before.

The first question of principle is whether this form of aid will undermine the private duty of providing for one's own old age through old-fashioned virtues like foresight and thrift. Being a floor, not a ceiling, it need not do so. Individuals will still have plenty of incentive to save for the future, though less fear of it.

Another question of principle is whether it is the proper function of a free government to offer special help to its older citizens. That principle was accepted when social security itself became effective in 1937. The presumption against any extension of Federal activity and expenditure, though Jeffersonian in origin, is now championed, though weakly, by the Republicans, who don't want to be tagged as enemies of the aged. But an extension of an established system like social security is not a violation of principle. But there is also an issue of cost.

Not even the Democrats can extend the welfare state without reference to the price tag. Enough spending bills were introduced in Congress last year to add $50 to $60 billion to our existing $78.4 billion budget if passed. Priorities, therefore, have to be determined. Health aid to the aged can be provided, but it may mean fewer schools, highways, or other needs which may also be urgent. A related question is whether aid to the aged can be done without renewed inflation. The aged, on small and fixed incomes have been the chief sufferers from inflation, and this is a good reason for giving social security a high priority. By the same token, any aid program that feeds inflation would defeat its own purposes and fool its beneficiaries. So the costs of any plan adopted must be carefully limited and controlled.

Doubtless the Forand bill can be improved. Some $200 million could be saved simply by raising the eligible age from 65 to 68. Moreover, many oldsters

able and eager to work could better provide for their own security if the $1,200 limitation were raised on the income they may earn without forfeiting social security pensions.

But in principle, such aid is proper public business. The issue is therefore inevitably and properly a political one. It should be decided according to the Nation's sense of justice, urgency, and choice of priorities in the use of scarce resources—as interpreted by the Nation's elected Representatives in Congress. The CHAIRMAN. Senator, I would just like to ask one question. How does this compare to the Forand bill?

Senator MCNAMARA. I don't know anything about the details of the Forand bill, but it has the same general approach in that it uses the so-called social security system to provide prepaid medical insurance for retired people.

I think to that degree it is similar.

The CHAIRMAN. Have you got a list of the patrons of the amend

ment here?

Senator MCNAMARA. The 23 Senators who joined me are: Senators Kennedy, Clark, Randolph, Symington, Humphrey, McGee, Williams of New Jersey, Young of Ohio, Douglas, Gruening, Long of Hawaii, Murray, Hart, Magnuson, Morse, Hennings, Jackson, Pastore, McCarthy, Bartlett, Engle, Green, and Mansfield.

The CHAIRMAN. Thank you very much, Senator.

Senator MCNAMARA. Thank you for your courtesy.
The CHAIRMAN. Senator Gore?

Senator GORE. I wish to congratulate you, Senator McNamara in the work you have done. I have read carefully your proposal and the speech you made with respect to it. It is a vigorous program which you present, and in a number of respects the bill which I have introduced is similar to the one which you and others have introduced. Indeed the various bills which propose medical care and hospitalization programs within the social security program, of necessity must have similar provisions. I think you would agree to that.

Senator MCNAMARA. Yes, or any other prepaid plan, I think would have similar provisions.

Senator GORE. There are several differences which in and of themselves would be of considerable importance, between the bill which I have introduced and the one which you have introduced.

One difference, I believe, is that my bill would place more emphasis upon, shall we say, outpatient care, more emphasis upon home visits by physicians, upon visits to offices of doctors, nurse care, and one reason why I felt that it would be advisable would be the scarcity of hospital beds and rooms at this particular time.

Senator MCNAMARA. I think, if you will permit an interruption at this point, you find our bill emphasizes the use of nursing homes and a good program of home care.

Senator GORE. Yes, I agree that it does. I think my bill perhaps places more emphasis upon that.

Senator MCNAMARA. I would only comment by saying it would be hard to place more than we do, but then it is a matter of degree. [Laughter.]

Senator GORE. Well, you wouldn't say it would be hard to do more of anything-well, I might agree it would be hard to do more of thing good than the senior Senator from Michigan.

any

Senator McNamara, I did want to congratulate you on the fine work that you have done, and the staff of the committee.

In working with the staff of the subcommittee which you have gathered together, I find them to be competent and very helpful and cooperative.

Senator MCNAMARA. Well, I think they deserve that praise and I appreciate it coming from you, Senator. I might just add, Mr. Chairman, at this point that we could have brought reams of editorials from the leading newspapers of the country as well as many of the very slick magazines endorsing the approach that we use to a solution of this problem.

Senator GORE. What do you mean various slick magazines? [Laughter.]

The CHAIRMAN. We are always very happy to have you, sir.
Senator MCNAMARA. Thank you.

Senator BENNETT. Senator Gore, magazines whose paper is loaded with casein. [Laughter.]

The CHAIRMAN. The next witness is the distinguished Senator from New York, Senator Javits.

You may proceed, sir.

STATEMENT OF HON. JACOB K. JAVITS, U.S. SENATOR FROM THE STATE OF NEW YORK

Senator JAVITS. Mr. Chairman, I thank you for this opportunity to appear and I will not detain the committee too long because we all have our chance to debate this on the floor.

I think it is very important to have a record made before the committee, and so I am glad to have this opportunity to do so.

Mr. Chairman, I appear here in support of the amendment 6-2760-H, in the nature of a substitute to title VI of the bill which is before the committee, which is in its essentials the health insurance for the aged act introduced some months ago by me together with other Senators. Those who are on this amendment in the nature of a substitute are Senators Cooper, Scott, Aiken, Fong, Keating, Prouty, as well as myself.

Now, the proposal which we make is contained in an analysis of our bill which I ask unanimous consent may be made a part of my statement for the record.

Senator GORE. Without objection so ordered. (See p. 489 staff analysis, departmental views, and text of amendment.) (The analysis referred to by Senator Javits follows:)

ANALYSIS OF HEALTH INSURANCE BILL, S. 3350, AS AMENDED JUNE 27, 1960, AND INTRODUCED AS AMENDMENT 6-27-60-H TO H.R. 12580

Title.-Health Insurance for the Aged Act-sponsors: Senators Javits, Cooper, Scott, Aiken, Fong, Keating, and Prouty.

Organization.—Administered by State plans subject to approval of Department of Health, Education, and Welfare.

Purpose. To assist States in establishing State plans for health insurance for individuals 65 years of age and over on a voluntary basis and at subscription rates they can afford to pay.

State plan. Must designate a single State agency; provide for financial participation by the State; permit every individual over 65 (and spouse) to sub58387-60-10

scribe; provide both "service" or "indemnity" types of benefits; provide physician's care up to one-third premium cost; provide coverage during temporary absence from State.

Benefits.—Minimum benefits specified per year include (a) physician's services for 12 home or office visits; (b) 21 days of hospital or equivalent nursing home care; (c) first $100 of costs for ambulatory diagnostic laboratory and X-ray services and (d) 24 visiting nurse's home service visits as prescribed by a physician. Maximum benefits computed as generally practicable under income divisions at stepped-up rate schedule starting at 50 cents monthly for subscribers with income of $500 to $1,000 per annum to maximum subscription charge of income of $3,600 per annum-no subscription charge for income under $500 per annum. Maximum benefits can receive Federal matching grants up to $165 per annum per capita; minimum benefits above can be obtained at $70 per person per annum.

Maximum benefits.-Sixty days hospital or equivalent cost care in a nursing home; surgery in or out of hospital, medical care in hospital, doctor's office visits with laboratory tests, diagnostic X-rays, and specialist consultations; visiting nurse service at home.

Subscription rate.-Schedule to be determined by the State, proportioned to subscriber's income by negotiation with Secretary of HEW.

Coverage.-Insurance will be placed with either nonprofit service agencies (i.e. Blue Cross, Blue Shield, etc.) private or nonprofit insurance carriers under contract with State agency, or with an insurance carrier set up by the State for such purpose.

Federal participation.-Federal percentage worked out on a ratio of State per capita income to national per capita income. Similar to Hill-Burton Hospital Act formula, which has been so successful. In no case shall Federal percentage exceed 75 percent or be less than 33% percent.

Cost of program.-Minimum benefits program would cost at maximum a total of $840 million with Federal share about $400 million estimated on participation of 12 million over 65 without any payment by any benefited individual; maximum benefits would cost $1.5 billion and with estimated payments by subscribers of $400 million would make Federal Government share of $480 million. Controls.-Act provides for cutting off Federal funds if State fails to comply; for appeals to U.S. Court of Appeals for reports to Congress.

Senator JAVITS. The principal step encompassed in the bill which we have submitted, as it is now revised, is the establishment of a StateFederal medical system for the aged, which will have certain basic benefits guaranteed in every State system and in which the costs will be shared by the State and the Federal Government on the formula of the Hill-Burton Act, the hospital construction act, for those basic benefits.

Above and beyond those basic benefits, and up to a maximum benefit which is purchasable at a total cost of $13 a month or $156 per capita a year, there is a maximum set of benefits which we estimate can be bought for that premium; and between the minimum and the maximum it will be a State option proposition: if the State desires to have a more inclusive program, then it may schedule subscription charges from those who can afford it based upon their income, its plan to be negotiated with the Secretary of Health, Education, and Welfare. But I wish to emphasize the distinctive feature of our plan, which is that the minimal benefits can be made available to all who are 65 and over without any cost to the individual and outside the social security system.

Now these minimal benefits, which are very important aspects of the proposition, are the following:

Twenty-one days of hospital or equivalent nursing home care; 12 home or office visits by a physician; the first $100 of costs for ambulatory diagnostic, laboratory or X-ray services; and 24 visiting nurse home service visits per annum as prescribed by a physician.

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