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GOLDEN AGE CLUBS,

Trenton, N.J., June 28, 1960. Hon. HARRY F. BYRD, Chairman, Senate Finance Committee, Senate Building, Washington, D.C.

DEAR SENATOR BYRD: We, the members of the Golden Age Club, 250 senior citizens, wish to express our firm conviction that the bill for medical care for the aged which has been approved by the House is most inadequate and will not provide the assistance so desperately needed by us.

It seems only logical and certainly more economical to use the well-established mechanism of the old-age and survivors insurance program to supply this additional care.

The basic governmental responsibility is imperative at this time if you sincerely wish to bring aid and relief of the senior citizens in this vital matter of medical

care.

We urge you to use your good office to bring out a bill which will provide adequate medical care as part of the OASDI program. Very truly yours,

BENJAMIN BERMAN, President.

BROOME COUNTY MEDICAL SOCIETY,

Binghamton, N.Y., June 28, 1960. Senator HARRY F. BYRD, U.S. Senate, Washington, D.C.

DEAR SENATOR BYRD: The Broome County Medical Society of the State of New York is in favorable accord with the action taken on social security bill H.R. 12580. This includes new medical care title XVI grant-in-aid program for the “Near Needy' aged with local determination of eligibility and administration.

We strongly urge, however, that the Senate Finance Committee hold hearings on this bill. We urge further, that no legislative action be taken on H.R. 12580 pending completion of adequate studies on the overall problem of health care for the aged.

Our reason for making these requests is obvious—the ever-increasing multiplicity of ideas regarding medical care of the aged indicates that a proper solution is still being sought. Until such time as the results of careful, thoughtful studies are known, we feel that hurried legislative action at this time would fail to achieve any real solution to the problem of medical care for the aged. Respectfully,

JOHN A. KALB, M.D., Chairman, Legislative Committee.

RESOLUTION ON SOCIAL SECURITY TERMINOLGY BY THE ARKANSAS STATE ASSOCIA

TION OF LIFE UNDERWRITERS

Whereas the Arkansas State Association of Life Underwriters (hereinafter referred to as “ASALU”), a trade association representing 642 members, believes that the use of insurance terminology in the social security program has created a misconception by the public, since the social security program is not insurance, nor are social security taxes "premiums”: Now, therefore, be it

Resolved by the board of directors of the ASALU, That it is hereby urgently requested that Congress delete all insurance terminology from the social security

rogram, that a declaration of policy be incorporated in the act pointing out that the program is not, and is not intended to be, an insurance program and that it shall henceforth not be represented as such in any way by any official or employee of the Federal Government; and be it further

Resolved, That a copy of this resolution be sent to President Eisenhower; Hon. Arthur S. Flemming, Secretary of the Department of Health, Education, and Welfare, Hon. John L. McClellan, Hon. J. W. Fulbright, Hon. Dale Alford, Hon. Wilbur Mills, Hon. W. E. Gathings, Hon. W. F. Norrell, and Hon. Oren Harris; and be it further

Resolved, That a copy of this resolution be sent to the National Association of Life Underwriters as an indication of support in principle of its position opposing the use of insurance terminology in the Social Security Act.

CANDOR, N.Y., June 29, 1960. Re medical care for the aged. Senator HARRY F. BYRD, Chairman, Senate Finance Committee, Senate Office Building, Washington, D.C.

SIR: Social security bill H.R. 12580 is before your committee for deliberation. May I add my comment to it.

Legislation concerning revision of our social security system and the medical care for the aged is of utmost importance. The decisions reached will influence the picture of our country's retirement philosophy and tax structures to a very high degree.

There is felt a sense of urgency in congressional circles about this problem, a feeling which is accentuated by the nearness of the forthcoming elections. I like to appeal to the sense of levelheadedness of yourself and your committee members not to rush to any conclusions while exposed to undue pressures of a political nature.

Congress has set up machinery to prepare for the 1961 White House Conference on Aging, and it can rightly be expected that the country's best minds will be available at that time to help in reaching the really best possible solution. All the efforts and expenses made in connection with it would be wasted if legislation were passed now before the White House Conference had a chance to meet.

I had the opportunity to participate in a preparatory regional meeting which was held in Binghamton, N.Y., on April 20, 1960. It may interest you that it was the unanimous consensus of the group that Forand-type bills are not the answer to the medical care problem of the aged.

It was brought out that no amount of governmental subsidy will ever prove satisfactory. Rather, the best approach was felt to be an improvement of the earning power and financial situation of the aged in such a way that they themselves can be in a position to pay for their own medical care expenses.

At present a man of 65 is forced to retire from his job, and to reduce himself to the low income level for the social security benefits plus no more than $1,200 outside income a year. These stipulations were originally written into the social security legislation in order to relieve the labor situation of the thirties. That situation has basically changed since then and will probably never return. In the meantime experience has proved that that philosophy is not even as ideal as was originally assumed. Industry has frequently suffered through the loss of valuable skills. The retired worker has not always found the enforced leisure time to be a desirable paradise.

The various panels studying this problem made the following recommendations:

(1) Retirement should be permissible on a physiologic basis not compulsory because a worker reaches his 65th birthday.

(2) The ceiling on maximum earnings should be raised considerably or preferably the restrictions on earnings should be lifted altogether.

(3) A worker's vested rights in his pension funds should be protected even when he changes jobs thus guaranteeing him the full pension income which he has earned through his lifetime accumulation of contributions. (4) Voluntary health insurance should be made available which

(a) provides coverage irrespective of age or usage;
(b) is guaranteed convertible from group contract to nongroup contract;

(c) provides the option whereby a man may elect to pay higher premiums during his working years but then has his policy fully paid up at age 60 or 65. (5) Assistance on the Federal or State level should be made available to provide the needy with protection against catastrophic illness. The premiums payable for such subsidized major insurance and the amount of the deductible exception should be graded according to a man's need (not across the board to everybody like the provisions of the Forand bill).

After recommendations 1 to 4 are in effect the majority of retired workers will eventually have no difficulty to pay the initial deductible expense from savings, income, or through private insurance coverage of their choice before they have to call on the major medical coverage suggested in recommendation 5. I hope

that you and your committee will see fit not to vote for any immediate legislation before not all the factors involved have been carefully studied in an atmosphere of unhastened search for true wisdom. Sincerely yours,

JOHN H. JAKES, M.D.

STATEMENT BY ILLINOIS MANUFACTURERS' ASSOCIATION IN OPPOSITION TO PROPOSED

AMENDMENTS TO THE SOCIAL SECURITY ACT, H.R. 12580, JUNE 30, 1960 The Illinois Manufacturers' Association embraces in its membership approxi, mately 5,000 manufacturing firms in Illinois, large, small, and medium sized which are engaged in a wide variety of production activities. Our members have a very direct interest in the subject of these hearings, and we are grateful for the opportunity to present our views to your committee.

We have carefully considered the changes which would be made in the Social Security Act if H.R. 12580 is enacted into law, as well as the numerous other proposals which were considered by the House Ways and Means Committee. We are especially concerned with the changes which are proposed in "Title III: Benefit Amounts," "Title IV: Disability Insurance Benefits,” "Title V: Employment Security,” and “Title VI: Medical Services for the Aged." We wish to express opposition to many of these proposed changes.

IMA PREDICTIONS IN 1935 WERE WELL FOUNDED

In a bulletin to members of the Illinois Manufacturers' Association dated May 6, 1935, at the time the social security bill was being considered in the Federal Congress, IMA expressed opposition to this legislation for a number of reasons and predicted that it would impose stupendous and ever-growing tax burdens upon industry and the American public. The predictions made at that time regarding the stupendous costs of this program were underestimated. In the fiscal year 1958 the taxes collected under the retirement, survivors, and disability insurance program totaled $13,099 million. This was equal to 18.3 percent of the amount of the entire Federal budget of $72 billion.

In the IMA bulletin of May 6, 1935, previously referred to, we predicted that the future course of the social security program would be dictated by political expediency. The following is a quotation from that bulletin :

"When the principles of this measure have been incorporated upon our Federal and State statute books, future consideration of social legislation would be almost entirely a matter of political expediency. Old-age pensions, unemployment insurance, etc., would become political footballs. Greater coverage and more generous allowances would be the principal issues in subsequent sessions of our legislative bodies. The 'sky would be the limit.'

“The recent almost unanimous vote of the House of Representatives of the Federal Congress on this measure illustrates how thoroughly politics dominates consideration of legislation of this type. Many of the Members of Congress voted for the bill against their best judgment, frankly saying that it would be 'political suicide' to do otherwise because of the great public sentiment for this legislation."

This prediction has certainly been borne out. The act originally provided that retirement benefits would be paid only to retired workers at age 65 or over, with the first payments to be made in 1942. But, in 1939 Congress began changing the program, moving up the first payments to 1940 and providing benefits for members of the families of retired or deceased workers. During the past 20 years group after group has been added to the eligibility rolls, benefit payments con. stantly raised, age limits lowered, eligibility broadened, and taxes increased.

The most sweeping changes were voted successively in 1950, 1952, 1954, 1956, and 1958_all election years for Members of the House of Representatives and one-third of the Members of the Senate. Unfortunately, our Social Security Act has become a political football.

MEDICAL CARE FOR THE AGED

In this election year of 1960 the subject of hospital and medical care for the aged has assumed great political importance. Both political parties are using medical care proposals to compete for the votes of the 16 million citizens who are 65 years of age and over. This is a voting bloc of more than ordinary potential.

The House Ways and Means Committee spent many months considering many proposals to provide medical and hospital care for aged persons. The committee finally was able to devise a bill, H.R. 12580, which on the surface is somewhat milder in its provisions than most of the other proposals. However, the manufacturing industry in Illinois as represented by the Illinois Manufacturers' Association is not in favor of this proposed legislation.

Efforts will probably be made in the Senate to amend H.R. 12580 to include many of the objectionable features which the House Ways ar Means Committee has already turned down. It would be a great disservice to the American public if any such vast new permanent program, costing billions of dollars a year, were passed in haste and in an atmosphere supercharged with election year politics. Once such a measure is enacted into law, succeeding Congresses will be under pressure, as past ones have been since the first social security measure was adopted, to extend both coverage and benefits.

HEALTH INSURANCE COVERAGE IS EXPANDING

Adequate health insurance is available at reasonable premiums for aged persons as well for the general population. Voluntary health insurance is a sound and economic means for providing the aged with the medical care they need. Great strides have been made in the number of aged persons being covered by private insurance programs. The health insurance industry estimates that by the end of this year 65 percent of our older people who need and want such protection will be covered by yoluntary health insurance; 80 percent will be covered by 1965, and by 1970, 90 percent of our older population will have such protection. It is obvious that the proponents of this legislation propose a permanent governmental scheme as the answer to a temporary problem.

If the Government gets into the health insurance business, voluntary insurance programs would be undermined and replaced. The Government would force a large segment of a private industry out of business. Private enterprise could not compete with a Government system of health benefits.

Under the present system of private medicine, Americans have the highest quality of health care in the world. Americans can be proud that there is no evidence that the aged fail to receive adequate health care because they cannot pay. This is a real tribute to the medical profession.

DECISION ON MEDICAL CARE SHOULD BE DEFERRED UNTIL 1961

The White House Conference on the Aged will be held early in 1961. At that time representatives from each State will discuss the whole general problem concerning our aged population. Certainly this would be an ideal time to resolve such an important issue as medical care. No Federal legislation should be enacted until the results and findings of the White House Conference are known and studied.

Medical care in any guise is a start toward socialized medicine. Even though it might temporarily be limited in scope it would provide an opening wedge for establishing a compulsory health-care program for citizens of all ages-containing certain built-in invitations for pressures to expand any initial program that might be adopted.

The quality of medical and hospital care in the country and our private medical system would be weakened. The Federal Government would set rates of compensation for hospitals, nursing homes, doctors and dentists, as well as setting standards of care. Underestimates in costs (a likely possibility) would result in pressure to reduce charges, which in turn would mean a reduction in quality of care. Overusage of facilities would be inevitable and would diminish standards of care.

It would strengthen efforts in other fields to centralize further the direction and control of our economic and social system, and weaken the efforts to attain steady, sustained progress through encouragement of individual initiative, personal freedom of choice, private enterprise achievement, and local and State responsibility. The ultimate responsibility for health treatment rests with the individual rather than through Government action.

A number of services are now available to provide medical care for persons 65 years of age or over, including

(a) The individual himself and his family.
(6) Employers.

(c) Community and social agencies.
(d) Favorable fee treatment by doctors, hospitals, etc.

(e) Insurance companies and Blue Cross organizations. Recommendation

The IMA submits that the Government-Federal or State should not undertake to furnish medical care for the aged until there has been a clear and unmistakable demonstration that existing services are not adequate to supply such care. We have seen no demonstration whatsoever of such inadequacy.

We recommend, therefore, that all legislation now pending which is designed to provide medical care for aged persons should be rejected.

BENEFITS TO DISABLED PERSONS

H.R. 12580 includes a provision which would remove the age limit of 50 years to allow disabled persons to qualify for disability insurance benefits. We are not in favor of that proposal.

On February 2, 1956, a representative of the Illinois Manufacturers' Association appeared before the members of the Senate Finance Committee when it was considering proposals to include benefits to disabled persons in the Social Security Act. He said that benefits to disabled persons is a separate problem and does not belong in the old age retirement program and that it would be a big step toward socialized medicine. He continued :

“We could expect constant pressure for future liberalization provisions. The age of 50 is no magic figure as the dividing line for benefits. The disabled, regardless of age, would soon be demanding benefits. Benefits for dependents for disabled persons would doubtless be demanded in future years."

This prediction was well-founded. Dependents of disabled persons are now eligible for benefits. It is now proposed to remove the age limit and provide benefits for all disabled persons regardless of age. We object to this further liberalization of the Social Security Act.

INCREASE IN FEDERAL UNEMPLOYMENT TAX

H.R. 12580 proposes to increase the Federal unemployment tax paid by employers from 0.3 percent to 0.4 percent of their payrolls. The money which is collected from that tax is used to finance the administration of the unemployment compensation and the employment service programs of the various States.

The employers in the State of Illinois object to this tax increase. Ever since the enactment of this tax Illinois employers have been short-changed. During the fiscal years 1936 to 1953 they paid a total of $222,672,000 in Federal unen ployment taxes but only $103,674,000 or 46.6 percent was returned to Illinois for employment security purposes. Illinois employers object to financing the programs of other States and resist a further increase in the tax which they must pay.

During the fiscal years 1936 to 1953 employers in all States paid $2,827,802,000 in Federal unemployment compensation taxes. Of this amount, only 67.7 percent or $1,914,058,000 was used for the purpose for which the tax was paid. The surplus of $913,744,000 which was not used for employment security administration went into the Federal Treasury.

Since 1954 the surplus has been used to build up a loan fund of $200 million to be used for loans to States which exhaust their trust funds from which benefits are paid and the balance was returned to the individual States.

One of the proposed reasons advanced for the increased Federal tax is to build up the loan fund to $550 million instead of the present $200 million. We recommend that a part of the nearly a billion dollars surplus which was paid by employers and not used for the purpose intended, be appropriated by the Congress and added to the loan fund instead of increasing the Federal tax for this purpose.

There is probably no other law that commits future generations to greater financial obligations than does our Social Security Act.

It is unwise and unnecessary for Congress to mortgage the future of Americans as a free people by enacting legislation of the type presented in H.R. 12580. In the best interests of all, we ask you to vote against these proposals.

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