The CHAIRMAN. Without objection.

(The document referred to follows:)

STATEMENT OF THE AMERICAN PUBLIC WELFARE ASSOCIATION ON H.R. 12580, SOCIAL SECURITY AMENDMENTS OF 1960, TO THE SENATE COMMITTEE OF FINANCE This statement presents the views of the American Public Welfare Association on H.R. 12580, the Social Security Amendments of 1960, as passed by the House of Representatives.

The American Public Welfare Association is the only national organization of local and State public welfare departments and of individuals engaged in public welfare at all levels of government. Its membership includes Federal, State, and local welfare administrators, board members and welfare workers from every jurisdiction. As the result of the discussions in our councils, committees and conferences, our board of directors of 27 persons, representing all parts of the country, adopts official policy positions on issues of current significance. These policy positions govern the association's testimony on proposed legislation relevant to the field of public welfare.

Over the years the association has supported strongly all sound recommendations which have advocated broadening and strengthening the social insurance programs of our country. We have talked many times with the Senate Committee on Finance about our observations of the social insurance and public welfare programs and believe that we have unique background for evaluating the interrelationship of social insurance and public asssitance.

COMMENTS ON TITLE XVI

For more than 20 years, the association's medical care committee, made up of persons knowledgeable in health and welfare programs throughout the country, has studied the medical care problems of needy and low-income individuals and families and methods of administering and financing medical services required by them. The medical care committee is fully familiar with the present extent of medical care programs in public welfare and with the gaps which still remain. Despite the fact that the association, since its inception almost 30 years ago, has considered as a major responsibility the stimulation and promotion of programs of medical care of adequate quality and quantity in the public assistance programs, and although there have been very large expenditures for medical care in these programs, we find that there are gaps and deficiencies still existing in many States with respect to the provision of medical care for the needy aged and other needy persons. We do not believe there are more than 15 to 20 States in which needy persons, including the aged, can receive all the medical care they require with the assistance of public funds. We are in full agreement with the decision of the House Ways and Means Committee, therefore, that there must be action taken to improve the provision of medical care for aged persons, although we are not in complete agreement with the method suggested, nor do we believe that the proposal fully meets the need.

H.R. 12580 proposes that a new Title XVI, Medical Services for the Aged, be added to the Social Security Act. We have studied this title with care and have certain comments which we would like to submit for consideration.

We approve:

1. The prohibition in title XVI against the imposition of residence requirements as an eligibility factor in determining eligibility of low-income aged persons for medical care;

2. The fact that the bill recognizes the broad scope of services needed by the aged (although we do disagree with the limitations in amount placed on certain essential services and supplies);

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3. The requirement that both institutional and noninstitutional services be provided to the aged. This, we believe, will serve to reduce unnecessary institutionalization of older persons;

4. The prohibition against an enrollment fee premium or similar charge to be imposed as a condition of any individual's eligibility for medical benefits under the plan. (We believe that there should also be a prohibition against any deductible or coinsurance feature since this is a needs program and not an insurance program.)

DOVETAILING TITLE XVI INTO TITLE I

We question whether there is actual need for this new title, even though we agree with the intent and the provisions we have commented on. Essentially the program described in title XVI is part of the old-age assistance program and a number of States are already assisting medically needy aged persons under title I. We believe that the same ends could be achieved by amending title I to make clear the intent of Congress that old-age assistance should include aged persons of low income who are unable to finance their full medical care requirements. It appears to us, from the viewpoint of economical and sound administration, that this revision of title I would be more satisfactory than the establishment of a wholly new title. We believe, too, from our observation of State legislative activities, that most States would find it more possible to obtain authorization, if needed, to expand services and assistance under title I than to obtain legislation establishing a "new" program. As one example, we would point out that Texas would undoubtedly need a constitutional amendment in order to participate in title XVI.

COMMENTS OF SECTION 602 OF THE BILL

In this connection we would like to comment on section 602 of H.R. 12580 which proposes somewhat more favorable Federal matching for States (an increase in the matching ratio of 5 percent) contingent upon a showing of an improvement in their old-age assistance medical care program. There are both inequities and problems in this provision since it would provide no additional funds in OAA medical care to those States that have, at great State expense and with very limited Federal matching, financed broad programs of medical services and supplies for aged persons. These States, of course, could show no improvement in their medical care programs since they already include all essential medical requirements. We are in full agreement that the poorer States need additional help but we think that this can be accomplished through further modifications of the matching formula based upon per capita income in the States. The improvement grants suggested in section 602 would, in fact, reward a number of average or high income States that have been backward in meeting the medical care requirements of their aged persons. Our suggestion that title XVI be included in title I would do away with this provision and would make it possible, through an appropriate modification of the matching formula, to establish a more equitable method of Federal participation for both the higher and lower income States.

COMMENTS ON SECTION 705 OF THE BILL

The association is pleased to note section 705 of H.R. 12580, which would amend the general provisions of the Social Security Act to require the Secretary to develop and revise from time to time guides or recommended standards as to the level, content, and quality of medical care and medical services to be used in evaluating and improving the public assistance medical care programs, including programs of medical services for the aged. We have long felt that the Department, through its Bureau of Public Assistance, should provide more

leadership to the States in this connection. We are pleased to see a recommendation of this kind in the recent report of the Advisory Council on Public Assistance. We would suggest that in addition to this provision there be a requirement that the Secretary establish a broadly constituted medical advisory committee, as was also recommended in the report of the Advisory Council on Public Assistance.

HEALTH INSURANCE FOR OASDI BENEFICIARIES

We believe, however, that even with the changes we have suggested in title XVI and related portions of H.R. 12580, our country would be far from meeting the health needs of all aged persons. In our opinion this can only be done through an extension of the old-age, survivors, and disability insurance program to include health service benefits. We will still need provisions under public assistance for those persons who do not qualify under OASDI, but we are fully convinced that the social insurance mechanism is the soundest approach to meeting medical need for the great bulk of aged persons.

The association, as a result of its studies, has included in its Federal legislative objectives, which are reviewed each year by the association's board of directors, the following statement:

"Health costs of old-age, survivors, and disability insurance beneficiaries should be financed through the OASDI program. Arrangements for achieving this objective should take into account the priority needs of the groups to be served; availability of facilities, personnel and services; and protection and encouragement of high quality of care, including the organization of health and related services to effect appropriate utilization of services and facilities."

As this policy statement indicates, we are in full accord with the principle of amending the OASDI program to include the financing of certain health benefits for social security beneficiaries. We believe that it is not the wish of the American people that substantial numbers of our aged citizens be required to turn to public assistance for help with their medical needs. Whereas cash benefits under the OASDI program in many instances may be sufficient for the individual's average maintenance requirements, it is rare that medical costs of an unpredictable or large character can be met unless the aged or disabled person has considerable other income and resources. It has been established that only a small proportion of aged and disabled people fall into this fortunate group.

We strongly urge, therefore, the establishment of a program of health bene fits for social security beneficaries as part of OASDI. This program, together with the expansion of OAA to provide better for the medical needs of persons not eligible under social insurance or whose needs cannot be fully met in that way, would give to all aged persons the assurance that they will not have to go without essential medical care when their working years are over. We subscribe to the principle of financing the costs of any health insurance benefits to OASDI beneficaries through the contributory social insurance program so widely accepted by the American people. We believe that it is both proper and desirable for all employers, employees, and the self-employed to finance the costs so that individuals during their working years will build for themselves health insurance coverage which will meet their needs after retirement. It appears that voluntary insurance cannot accomplish this for any large number of persons within the reasonably near future.

SUPPORT FOR OTHER PROVISIONS IN THE BILL

We should like to comment briefly on some of the social insurance provisions in H.R. 12580. It appears to us that the recommendations for change, both major and minor, are in the right direction. We are particularly pleased with the removal of the age 50 limitation for disability insurance benefits. We support strongly, too, the measure which would strengthen the rehabilitation aspects of the disability program by providing a 12-month period of trial work during

which benefits would be continued for all disabled workers who attempt any planned rehabilitation rather than limiting this trial work period to those receiving services under the official Federal, State vocational rehabilitation program, as at present.

We support the change in the insured status requirement for retired workers, the new benefit protection provisions for widows and children, and the extension of coverage to self-employed physicians and to a number of other groups.

We are pleased to note that the authorization for appropriation for the maternal and child health services program would be increased to $25 million and the services for crippled children authorization to $25 million. We are disappointed that the bill proposes that the authorization for appropriation for the child welfare program be increased only to $20 million. Our studies of needs in this program indicate that this authorization, too, should be increased to $25 million and we have previously recommended this to the Congress. The new authorization for research and demonstration projects in the child welfare services program, which would permit grants to public and other nonprofit institutions and agencies for this purpose, would meet an existing need for further study in the child welfare field.

Mr. COHEN. I might say that the State welfare administrators as a whole, and those persons who make up the American Public Welfare Association, after considering the proposal of the Secretary of Health, Education, and Welfare, and conferences with him at which we attended at his request, we come to the conclusion that the plan he presented to the committee yesterday from the standpoint of State and local administration is not a realistic plan that can or should be adopted at this time.

Senator DOUGLAS. That is the opinion of the American Public Welfare Association.

Mr. COHEN. That is correct, Senator.

Senator DOUGLAS. Consisting of State directors of public welfare. Mr. COHEN. Yes, sir.

Senator DOUGLAS. And who are in the public welfare field.

Mr. COHEN. That is correct.

Senator CURTIs. Just for the record when did they arrive at that conclusion?

Mr. COHEN. First, the Secretary called the executive committee of the State administrators in for a conference.

Senator CURTIS. Yes, sir.

Mr. COHEN. I can't remember the date but it was at the time the Ways and Means Committee was considering the legislation and the chairman of the Ways and Means Committee asked that they consult the Senate welfare administrators, which was done.

Senator CURTIS. How large is the executive committee?

Mr. COHEN. At that time it was 6, 8, or 10.

Senator CURTIS. How many attended?

Mr. COHEN. About that number, I would say maybe eight, and since that time, Senator, the board of directors of the American Public Welfare Association has met to discuss this. I don't want to imply that this represents the view of every single State administrator because they were not consulted individually.

Senator CURTIS. I am not quarreling with you, but I think we should keep this in mind, with reference to these telegrams of Governors, and others, if we put them in the proper perspective.

How many people have seen the formalized plan developed by Flemming?

Mr. COHEN. Well

Senator CURTIS. At the time you take the action?

Mr. COHEN. At the time they took the action Secretary Flemming presented to us a summary of his proposal, cost estimates State by State which were probably the same ones that were discussed here yesterday, and the details of the plan but not a specific bill. There was no bill at that time, but the main elements, including the matter of deductibles, coinsurance and use of the State agency

Senator CURTIS. So this is the action of the executive board?
Mr. COHEN. Yes, sir.

Senator HARTKE. If you will permit me to interrupt and if you will yield at that point, there is no bill embodying the Flemming proposal today.

Mr. COHEN. We did not see one at the time.

Senator HARTKE. There isn't any.

Senator DOUGLAS. It was more than the executive committee, was it not? The board of directors approved this statement.

Mr. COHEN. The board of directors did not formally approve this statement which I submitted to you. They discussed it. It was not formally presented to them at that time for their endorsement.

The second point I want to make is a rather important point, that all of the objectives of this new title 16 that are in the House bill, could be achieved by dovetailing them into the provisions of title 1 into the present act without the need of setting up an entirely different or new category of grants, with separate plan requirements.

In other words, insofar as there are good purposes, objectives, and provisions in the new title 16, why not put them directly into title 1? Senator CURTIS. Are you saying that by revising the eligibility, so far as the means test is concerned, you can carry out title 1?

Mr. COHEN. Yes, every single new provision that is in title 16 could be inserted into title 1 because the objective of title 16 is nothing more than saying "We wish to broaden the concept of medical care more explicitly in title 1 for needy aged persons." So there is absolutely no reason why there needs to be a whole new title, a wholly new set of plan requirements asking the Governors, the budget directors, the legislatures to give authorization to a whole new program, when that program already exists under title 1 and if you want to say that you think the provision should be more liberal or changed, the committee could well insert that into title 1.

There is absolutely no reason that there needs to be the whole new title.