Hon. J. ALLEN FREAR, Jr., HOUSE OF REPRESENTATIVES, DEAR SENATOR FREAR: It is my understanding that the Senate Finance Committee will begin consideration of the proposed 1960 amendments to the Social Security Act next Tuesday. For that reason, I wish to call to your attention an unfortunate problem which has arisen in the administration of the law relating to benefits for the dependents of disabled persons authorized in the 1958 amendments to the act. As you know, neither the Congress nor the Social Security Administration set up procedures for the automatic inclusion of dependents of disabled beneficiaries. Even so, applicants after September 1, 1958, were advised of the eligibility of dependents in the event their own entitlement was established. However, for those persons who filed before September 1, 1958, and whose cases were approved after the passage of considerable time find that their dependents are precluded from obtaining retroactive benefits for more than the 12-month period provided in the law. For example, a disabled person who filed an application in June 1958 and obtained final approval of its in February 1960, found that such approval conferred entitlement upon certain of his dependents. However, under the law, his application for these benefits in March 1960 would result in the approval of payments effective in March 1959 rather than September 1, 1958, the effective date of the 1958 amendments which, I believe in all good conscience, should apply in such cases. I have introduced a bill, H.R. 12807, intended to correct this situation in instances of the kind I have cited above. A copy of the bill is attached. Unfortunately, this situation did not come to my attention soon enough to allow the introduction of the bill at an earlier date. Although my proposed amendment would apply to a limited number of cases, I believe it important that a change be made in the law to allow for equitable treatment. Therefore, I should sincerely appreciate any consideration the Finance Committee would give to this matter during its deliberations next week. With best regards. [H.R. 12807, 86th Cong., 2d sess.] JOHN E. HENDERSON. A BILL To provide in certain cases for the payment of additional monthly insurance benefits under title II of the Social Security Act to the dependents of a disabled individual, where timely application for such benefits was in effect prevented by delays in the final determination of such individual's disability Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That in any case where (1) an individual filed application for disability insurance benefits under section 223 of the Social Security Act before August 28, 1958, (2) such individual was determined to be entitled to such benefits but the final determination of such entitlement was not made until on or after such date, (3) any other person became entitled to monthly insurance benefits under subsection (b), (c), or (d) of section 202 of such Act on the basis of the wages and self-employment income of such individual and pursuant to an application filed within 12 months after the date of such final determination, and (4) the month with which such person's entitlement to such benefits became effective (taking into account section 202(j) (1) of such Act) was later than the first month for which such entitlement would have been effective if application for such benefits had been filed at the earliest time permitted under section 202(j) (2) of such Act, then the entitlement to such benefits of each person described in paragraph (3) shall be deemed to have become effective with the month in which it would become effective if application therefor had been filed at the earliest time permitted under section 202 (j) (2) of the Social Security Act; and such person, upon filing with the Secretary of Health, Education, and Welfare an application under this Act within 12 months after the date of the enactment of this Act (or, if later, within 12 months after the date of the final determination described in paragraph (2)), shall be entitled to receive in a lump sum an amount equal to the aggregate of the monthly insurance benefits under section 202 of the Social Security Act which he did not receive but would have received if his application for such benefits had been filed at the earliest time so permitted. STATEMENT OF THE NATIONAL ASSOCIATION OF MANUFACTURERS WITH RESPECT TO H.R. 12580 and RELATED PROPOSALS This statement of the views of the National Association of Manufacturers on H.R. 12580 and related proposals is submitted pursuant to the invitation of the Senate Finance Committee for comments of interested organizations. The National Association of Manufacturers is a voluntary organization of over 20,000 member companies, representative of every segment of the manufacturing community of every section of the Nation. Its membership includes companies of every size from the smallest to the largest of enterprises. In fact, 83 percent of association members employ fewer than 500 persons and thus come within the accepted definition of small business. As representatives of businessmen and citizens, the association is concerned with the financing and benefits of all public programs which are designed to provide a measure of security to individuals against the economic hazards of old age, death, disability, and involuntary unemployment. We are likewise concerned with the implication of these programs to the well-being of our country. The issues involved are vital. They should not be considered in a hasty and ill-considered manner during the heated and pressure-filled atmosphere of an election year. Some of thhe changes proposed in the various bills before the Congress can drastically and permanently affect every individual in the country, as well as the generations to come. Therefore, we most strongly recommend that further consideration of these bills be postponed to a time when they can be given the traditional judicious and deliberate treatment with which the Congress rightfully handles issues of such fundamental importance, and when the Congress has before it all the pertinent facts which bear upon the issue. Specific provisions or details of the various proposed bills will not be discussed in this statement. Rather it is confined to setting forth the basic issues and the broad and far-reaching implications inherent in the proposals. FINANCING We One of our major areas of concern is the fiscal questions. We recognize that the achievement of individual economic security is a laudable objective. recognize that society has a responsibility toward the destitute aged, toward the disabled, and toward all those who become dependent at any age. This responsibility is being discharged in an humane manner responsive to their needs through private and public means. Our concern in the fiscal area arises from our deep conviction that unwise Federal fiscal or monetary policies-in this or in any other area-will undermine the security of all of us since our financial provision for our retirement security and for protection against misfortunes at all ages, depends upon a stable and sound dollar. The various pending proposals involve commitments which reach far into the future for unknown amounts-but in the magnitude of billions of dollars. Welfare expenditures to date show that any commitments made today will rapidly increase over the presently estimated amounts. Federal grants for public assistance increased over 400 percent between 1945 and 1958--from $401 million in 1945, to $1,728 million in 1958. Currently these grants are at some five times the 1945 rate. Large grants for other welfare purposes have been made and still more are under current consideration. This phenomenal growth in federal grants has occurred despite the Federal OASDI system's benefits, which in 1958 were 31 times those paid in 1945, and which this year will be some $11 billion dollars-40 times the amount paid in 1945. H.R. 12580 and other pending social security measures would greatly increase Federal expenditures both for public assistance grants and for OASDI benefits, despite the fiscal position of the Treasury and of the social security trust funds. The major pending proposal is that of providing medical care to older persons. The approximate cost of this program is presently unascertainable, but without question would add tremendously to welfare expeditures. The cost must inevitably be borne by the public in the form of inflated prices for goods and services, as well as by increased taxes. Some idea of prospective medical care costs under present programs may be gained from an analysis of present expenditures for so-called vendor medical care provided old-age-assistance recipients by a half dozen States. With 273,000 aged on their benefit rolls, the February 1960 vendor medical care expenditures of these six States were at the annual rate of $119 million per year— an average of nearly $440 per OAA benefit recipient-including all those who received no vendor medical care. If it is assumed that the new program would provide an equal level of medical care protection for 10 million aged, utilized by them at the same level as recipients on public assistance rolls, the annual cost would be $4.4 billion. Costs would rapidly increase as the number of aged increase. A $4.4 billion expenditure would obviously require an added tax of 2 percent of taxable payroll, above the tax rates presently scheduled. Additional expenditures of the magnitude above indicated must be most carefully assessed within the framework of overall welfare costs. It is clear that these overall costs will increase very rapidly even under present social security commitments and without any additional liberalizations. OASDI alone, according to the OASDI trustees' report filed in March of this year, estimates that in less than 10 years expenditures will be at the annual rate of nearly $17 billion-more than double the 1958 expenditures. Nor can we ignore the fact that even present expenditures are not being currently financed, 1957, 1958, and 1959 were deficit years for OASDI. Its taxes and interest failed to meet its expenditures by more than $2 billion-and further deficits are in prospect. The public interest requires that OASDI be soundly financed on a pay-as-you-go basis, and that no additional burdens be added without contemporaneously adding to the taxes. A primary problem we already face is the size of the taxes scheduled to be paid in the future. OASDI protection is dependent on the willingness of future taxpayers to assume this progressively heavy burden. They will decide the portion of the Nation's income which will be transferred by Government from them to the aged. Only by prudent present planning can we assure that future taxpayers will not repudiate the system or reduce the presently promised protection, through inflation, amendment, or otherwise. OVERALL PROBLEM OF THE AGED Present health programs-and it may be mentioned that much care in addition to public program care is provided through private means-negates any allegation that an emergency exists which must be immediately handled. Our aged are not lacking adequate medical care. Aged persons are not refused medical care because of lack of ability to pay. Therefore, the medical problem does not require emergency action. In fact, medical care is only one of the several areas which are to be discussed at length in January of next year at the White House Conference on the Problems of the Aged. The agenda and background papers of this White House Conference, as Iwell as the regional conferences in the States which have been held, indicate that the overall problem of the aged is not a simple nor single one-it is a complex of economic, social, family, and psychological problems and community relations all intimately related. To attempt to solve the medical aspects of this complex without thorough consideration of all the interrelated and vital considerations, would be most unwise. HASTY ACTION Among considerations that must be borne in mind is that immediate expenditures of large amounts, in an attempt to provide adequate medical care for this particular group, must be viewed within the overall picture of presently available medical facilities and medical personnel. There is no escaping the fact that any large scale immediate increase in the utilization of medical facilities and personnel by this particular age group would of necessity result in an inadequacy of medical facilities and personnel for the remainder of the population. Accordingly, any shift in the use of medical facilities and personnel prior to most careful study might well create more serious problems and inequities than it could possibly remedy. Some of the pending proposals would add medical care for the aged as a benefit under OASDI, to be financed by additional OASDI taxes. No justification has been advanced as to why this added benefit would be made available to the aged beneficiaries but denied the disabled, children and other beneficiaries. Furthermore, no basis has been advanced for providing the same protection to everyone regardless of his contributions. This is not consistent with the variable benefit and contribution principles of OASDI. To give flat benefits under OASDI is, in effect, to create a dole financed by its taxes. Furthermore, the proposal is but an opening wedge for a complete compulsory medical care system-in short, the English system. This would mean scrapping existing plans which have been developed over the course of the years and the substitution of a Federal monopoly in this area of personal services. Unlike cash benefits, Government medical care and the provision of medical care under voluntary plans, is mutually exclusive. Government provided medical care means a concentration of authority and expensive Government administration. Under the proposal that OASDI be the procurer of medical care for over 10 million potential eligibles throughout the Nation, this Government monopoly and control would be most serious. The power and authority and purse-string control in the hands of the bureauerats administering the program would be inconsistent with the proper solution of the many local problems which are involved. PRESERVATION OF VOLUNTARY HEALTH INSURANCE A few years ago proponents of Government provision of compulsory medical care argued that this was the only feasible approach to satisfactory health protection of the general public. This false premise has been exploded by the extension of voluntary private protection to over 130 million persons. The now modified argument is that in the case of the aged, Government must establish a compulsory plan-despite the giant strides made recently in this area of coverage which now includes nearly half of the older population. Projections of present growth indicate that in a relatively few short years the coverage of aged will be as satisfactorily accomplished as has already been achieved for the general population. The insurance industry estimates that by the end of the current year nearly two-thirds of the aged wanting and needing such protection will have it, that 5 years from now, four-fifths will have this protection available, and that in another 5 years 3 out of 10 will have it. This bright prospect is jeopardized by the threat of Government intervention. CONCLUSION In view of the fiscal considerations, the level of existing benefits, the complexity of the problems, and the current public exploration of problems of the aged which will culminate in next year's White House conferences, and in view of the advances under private auspices of medical protection, and the disaster of hasty and ill considered governmental action, it is the recommendation of the National Association of Manufacturers that no action should be taken at this time on any of the proposed social security benefit liberalizations. We favor the provisions in H.R. 12580 which strengthen the operation of the unemployment compensation system. AMERICAN PODIATRY ASSOCIATION, Hon. HARRY FLOOD BYRD, Chairman, Committee on Finance, DEAR SENATOR BYRD: As secretary and editor of the American Podiatry Association (from 1912 until 1958 known as the National Association of Chiropodists), I regret that the time element did not permit your committee to schedule me to present testimony. However, I do appreciate the opportunity to present this statement for incorporation into the record of the hearings on H.R. 12580, especially in regard to the provisions for medical services for the aged. More than 30 million times a year the public visits foot doctors' offices. Perhaps as many as 40 percent of these individuals are 60 years of age or more. We, therefore, are very much aware that our older people are very much concerned with their ability to provide for necessary medical care in their retirement. The members of our association offer their support to programs which will meet this need, but the association is not prepared to suggest the form such a program should take. As a private individual, I should like to make some personal observations and comments. The proposals for medical services for the aged offered in H.R. 12580 and the so-called administration plan have been characterized as "skimpy," "doesn't cover enough people," "leads to pauperization," "no provision for revenue to cover costs." The plans, such as proposed by Congressman Forand, have been called "the first step to socialized medicine," "intrusion of the Government into the doctor-patient relationship," "not enough benefits," "will cost too much," "will be abused," "not a voluntary program." Perhaps the following approach has been considered. I would suggest a voluntary health insurance program to which a social security retiree could subscribe. Half the premium would be deducted from the monthly allotment, the other half to come from social security funds obtained by increasing the present social security assessment of all individuals. These health insurance benefits could be service or indemnity benefits, or plans now in operation, somewhat on the order of the types now being made available under the Federal employees health benefits plan. Adequate and reasonable ceiling for annual benefits could be arrived at with "coinsurance" and "deductible" features that would approach, if not actually reach, actuarial soundness. This would cover the needs of all but a small percentage of retired persons. For these people, and for the few who would exhaust their annual benefits and be unable to finance additional care, their needs could be supplemented through the proposal in H.R. 12580, or the administration plan. Obviously, the amount of funds needed for State plans under these circumstances would be very minimal. It seems to the writer that the combination of voluntary health insurance and State plans would fill the obvious need in the American tradition. As secretary and editor of the American Podiatry Association, I call your attention to the definition of the term "physicians' services" under the new title XVI proposed by H.R. 12580, section 1606 (e), page 65. Podiatrists (chiropodists) are licensed in all of the 50 States and the District of Columbia to diagnose and treat the human foot by medical and surgical means. Almost all insurance companies honor claims for scheduled services performed by podiatrists. Sixty-five percent of our practitioners are participating doctors in socalled Blue Cross-Blue Shield plans. However, the definition of "physicians' services" being considered is susceptible of individual interpretation, varying from official to official and from State to State, leading to possible injustice to the patient who elects a legally qualified foot doctor to perform a scheduled service, We would petition you that any definition of medical care or of physician service provide that any practitioner licensed by the State to treat by medical and surgical means may be elected by the patient to provide the service within his scope of license. Or the cited definition (or any similar definition in any legislation being considered) could be amended by substituting a semicolon for the period at the end of the sentence and adding "or a podiatrist (chiropodist) operating within the scope of his license." Thank you for the opportunity to include this statement in the record of the hearing. Sincerely, A. RUBIN, D.S.C., Secretary and Editor. THE NATIONAL ASSOCIATION OF LIFE UNDERWRITERS, Re title VI of H.R. 12580. Hon. HARRY F. BYRD, Chairman, Senate Finance Committee, DEAR SENATOR BYRD: As chairman of the committee on social security of the National Association of Life Underwriters, I am taking this opportunity to make a brief statement of the views of my organization with respect to the various proposals being studied by the Senate Finance Committee to provide Government health care for the aged. These proposals include that contained in title VI of H.R. 12580. For your information, my association is a trade association having a membership of 78,000 life insurance agents, general agents and managers located in 1 |