10. AMENDMENT 6-27-60-E-INTRODUCED BY SENATOR JAVITS (IDENTICAL WITH AMENDMENT 25, 6-29-60-Y, INTRODUCED BY SENATOR HARTKE)

STAFF ANALYSIS

Increases the social security earnings limitation from $1,200 to $2,400 per

year.

Cost.-$1.33 billion per year, or 0.41 percent of payroll, on a level premium

basis.

Financing.-No tax increase provided for additional cost of the program.

VIEWS OF DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE ON
AMENDMENT 6-27-60-E

See joint report on page 480.

TEXT OF AMENDMENT 6-27-60-E

Intended to be proposed by Mr. JAVITS to the bill (H.R. 12580), viz: On page 80, between lines 3 and 4, insert the following new section:

SEC. 211. (a) (1) Paragraphs (1) and (2) of subsection (e) of section 203 of the Social Security Act are amended by striking out "$1,200" wherever it appears therein and inserting in lieu thereof "$2,400", and (2) such paragraphs and paragraph (1) of subsection (g) of such section are amended by striking out "$100 times" wherever it appears therein and inserting in lieu thereof “$200 times'.

(b) The amendments made by subsection (a) shall be effective, in the case of any individual, with respect to taxable years of such individual ending after 1960.

11. AMENDMENT 6-27-60-F-INTRODUCED BY SENATOR MORSE (IN NATURE OF SUBSTITUTE FOR TITLE VI OF H.R. 12580)-IDENTICAL TO SENATOR MORSE'S BILL S. 881, AND CONGRESSMAN FORAND'S BILL H.R. 4700

STAFF ANALYSIS

Eligibility. Individuals who are eligible to receive, but not necessarily receiving social security old-age and survivors benefits (including dependents) would be entitled to health benefits.

Benefits.

1. Hospital services-60 days per year.

2. Nursing home services-120 days per year (less days of hospitalization). 3. Surgical services-no limit.

Cost.-$2.56 billion per year, or 0.79 percent of payroll on a level premium basis; $1.11 billion per year, or 0.53 percent of payroll on an early year basis. Financing.-Benefits would be payable out of the old-age and survivors insurance trust fund and would be financed by an increase in the contribution rate on both employer and employee of one-fourth of 1 percent and on the selfemployed of three-eighths of 1 percent, beginning in 1961.

NOTE. The revenues derived from the tax increases provided in amendment would amount to only 0.50 percent of payroll on a level premium basis; thus the amendment is underfinanced.

VIEWS OF DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE ON AMENDMENT 6-27-60-F INCLUDED IN FOLLOWING JOINT REPORT

The Department of Health, Education, and Welfare would recommend against adoption of each of the following four amendments: Amendment No. 1, 6-2460-C (Mr. McNamara), Amendment No. 11, 6-27-60-F (Mr. Morse), Amendment No. 20, 6-28-60-G (Mr. Humphrey), and Amendment No. 27, 6-30-60-E (Mr. Anderson). Each of these bills proposes to amend title VI of H.R. 12580 to add health insurance benefits to the existing Federal old-age, survivors, and disability insurance system. The reasons for this recommendation are as follows:

1. The proposed extension of the existing old-age, survivors, and disability insurance system to encompass health insurance would make such insurance compulsory and would not be pinpointed to the need for aid in meeting the cost of medical services. Under this approach, the individual would have no opportunity to determine for himself the particular pattern for meeting the threat of large medical expenses that best suit his own needs and desires. In addition, by compulsorily extending health benefits to aged persons eligible for old-age, survivors, and disability insurance, many persons would be included who have the resources and the opportunity to obtain protection against long-term or other expensive illnesses without Government help.

2. These amendments would establish an exclusively Federal program. This administration has consistently endeavored, however, to strengthen our system of government by encouraging State and local governments to assume responsibility for the many public needs which can be met through Federal-State partnership and by supporting programs to stimulate greater State and local effort in areas of critical national concern. Health care for the aged is an area of activity admirably suited to such a sharing of responsibility. In addition to bolstering the underlying cooperative foundation of our Federal system, with governmental powers divided between State and Nation, Federal-State partnership places the control over daily program operations at the level of Government closest to the persons affected by the program. Thus, an individual's needs may be more immediately and effectively reflected in the current operations and the development of the program.

3. The approach proposed in the amendments would constitute a serious threat to the orderly development of present retirement, survivorship, and disability benefit features of the social security system.

The payroll tax for old-age, survivors, and disability insurance is already scheduled ultimately to be 42 percent each on employees and employers and 64 percent on the self-employed. Further liberalization in retirement, survivorship, and disability benefits may call for additional revenues, which can only come from increases in the payroll tax or increases in the earnings base, or both. If health insurance as envisaged in these amendments were to be added to the system, the payroll tax would need to be increased by a total of onehalf to 1 percent. As in the case of cash benefits, there would undoubtedly be insistent demands for improving the medical benefits beyond those which can be financed by the tax increase for medical benefit purposes. Increases in both health and cash benefits would place the retirement, survivorship, and disability portions of the system in competition with the health benefits for available funds, since the revenue possibilities from a payroll tax are not limitless.

It is therefore far better to reserve the payroll tax for the retirement, survivorship, and disability features of the social security system so that the revenue source is not overburdened. Whatever the Government needs to do in the area of health care for the aged should be done by the appropriation of general revenues. Such appropriation would provide for a more equitable distribution of the fiscal load than would a payroll tax on earnings of $4,800 or less.

TEXT OF AMENDMENT 6-27-60-F

Intended to be proposed by Mr. MORSE to the bill (H.R. 12580), viz: Beginning on page 154, line 1, strike out all through line 18 on page 172, and insert in lieu thereof the following:

TITLE VI-HOSPITAL AND SURGICAL INSURANCE

AMENDMENTS TO TITLE II OF THE SOCIAL SECURITY ACT

SEC. 601. (a) Title II of the Social Security Act is amended by adding after section 225 the following new section:

"HOSPITALIZATION AND SURGICAL INSURANCE

"Eligibility for Insurance

"SEC. 226. (a) (1) The cost of hospital or nursing home services furnished to any individual during any month for which he is entitled to monthly benefits under section 202 (whether or not such benefits are actually paid to him) or is deemed entitled to such benefits under the provisions of paragraph 2, or the cost of such services furnished to him during the month of his death where he ceases

to be entitled by reason of his death, and the cost of surgical services which are not of an elective nature, shall, subject to the provisions of this section, be paid from the Federal Old-Age and Survivors Insurance Trust Fund to the hospital, physician, and nursing home which furnished him the services. Services to be paid for in accordance with the provisions of this section include only services provided in the United States.

"(2) For purposes of this section, (A) any individual who would upon filing application therefor, be entitled to monthly benefits for any month under section 202 shall, if he files application under this section within the time limits prescribed in section 202(j) be deemed, for purposes of this section only, to be entitled to benefits for such month, (B) such individual shall, whether or not he files application under this section, be deemed to be entitled to benefits under section 202 for such month for purposes of determining whether the wife, husband, or child of such individual comes within the provision of clause (A) hereof, and (C) any individual shall, for purposes of this section, be deemed entitled to benefits under section 202 if such individual could have been deemed under clauses (A) or (B) of this paragraph to have been so entitled had he not died during such month.

"(3) For purposes of paragraph (2), an individual's application under this section may, subject to regulations, be filed (whether such individual is legally competent or incompetent) by any relative or other person, including the hospital, physician, or nursing home furnishing him hospital, surgical, and nursing home services and, after such individual's death, his estate.

"(4) Payments may be made for hospital services furnished under this section to an individual during his first sixty days of hospitalization in a twelvemonth period that begins with the first day of the first month in which the individual received hospital services for which a payment is made under this section, and during his first sixty days of hospitalization in each succeeding twelvemonth period; and for nursing home services furnished under this section to an individual if the individual is transferred to the nursing home from the hospital, and if the services are for an illness or condition associated with that for which he received hospital services: Provided, That the number of days of nursing home services for which payments may be made shall, in any twelve-month period as described above, not exceed one hundred and twenty less the number of days of hospital services (in the same twelve-month period) for which payments are made under this section.

“(5) The provisions of section 205 relating to the making and review of determinations shall be applicable to determinations as to whether the costs of hospital, nursing home, and surgical services furnished an individual may be paid for out of the Federal Old-Age and Survivors Insurance Trust Fund under this subsection, and the amount of such payment.

"Description of Hospital, Nursing Home, and Surgical Services

"(b) (1) For purposes of this section, the term 'hospital services' means the following services, drugs, and appliances furnished by a hospital to any individual as a bed patient: bed and board and such nursing services, laboratory services, ambulance services, use of operating room, staff services, and other services, drugs, and appliances as are customarily furnished by such hospital to its bed patients either through its own employees or through persons with whom it has made arrangements for such services, drugs, or appliances; the term 'hospital services' includes such medical care as is generally furnished by hospitals as an essential part of hospital care for bed patients; such term shall include care in hospitals described in paragraph (1) of subsection (d); such term shall not include care in any tuberculosis or mental hospital.

"(2) The term 'nursing home services' means skilled nursing care, related medical and personal services and accompanying bed and board furnished by a facility which is equipped to provide such services, and (A) which is operated in connection with a hospital, or (B) in which such skilled nursing care and medical services are prescribed by, or are performed under the general direction of, persons licensed to practice medicine or surgery in the State.

"(3) The term 'surgical services' means surgical procedures (other than elective surgery) provided in a hospital, or in case of an emergency or for minor surgery, provided in the outpatient department of a hospital or in a doctor's office. Surgical services may include oral surgery when provided in a hospital. The term 'elective surgery' means surgery that is requested by the patient, but which in the opinion of cognizant medical authority is not medically required.

"Free Choice by Patient

"(c) (1) Any individual referred to in paragraphs (1) and (2) of subsection (a) may obtain the hospital or nursing home services for which payment to the hospital or nursing home is provided by this section from any hospital or nursing home which has entered into an agreement under this section, which admits such individual and to which such individual has been referred by a physician or (in the case of hospital or nursing home services furnished in conjunction with oral surgery) dentist licensed by the State in which such individual resides or the hospital or nursing home is located, upon a determination by the physician or dentist that hospitalization or nursing home care for such individual is medically necessary; except that such referral shall not be required in an emergency situation which makes such a requirement impractical.

"(2) Any individual referred to in paragraphs (1) and (2) of subsection (a) may, with respect to the surgical services for which payment is provided by this section, freely select the surgeon of his choice, provided that the surgeon is certified by the American Board of Surgery or is a member of the American College of Surgeons except that such certification shall not be required in cases of emergency where the life of the patient would be endangered by any delay, or in such other cases where such certification is not practicable, and except that, in the case of oral surgery, such individual may select a duly licensed dentist. "(3) Regulations under this section shall provide for payments (in such amounts and upon such conditions as may be prescribed in such regulations) to (A) hospitals for hospitals services rendered in emergency situations to individuals referred to in paragraphs (1) and (2) of subsection (a) by hospitals which have not entered into an agreement under this section, and (B) physicians for surgical services rendered by physicians not certified by the American Board of Surgery or not members of the American College of Surgery.

"Agreements With Hospitals, Nursing Homes and Providers of Surgical Services

"(d) (1) Any institution (other than a tuberculosis or mental hospital) shall be eligible to enter into an agreement for payment from the Federal Old-Age and Survivors Insurance Trust Fund of the cost of hospital or nursing home services furnished to individuals referred to in paragraphs (1) and (2) of subsection (a) if it is licensed as a hospital or nursing home pursuant to the law of the State in which it is located.

"(2) Each agreement with a hospital under this section shall cover all hospital services included under subsection (b) (which services shall be listed in the agreement), shall provide that such services shall be furnished in semiprivate accommodations if available unless other accommodations are required for medical reasons, or are occupied at the request of the patient, shall be made upon such other terms and conditions as are consistent with the efficient and economical administration of this section, and shall continue in force for such period and be terminable upon such notice as may be agreed upon.

'(3) An agreement with a hospital or nursing home under this section shall provide for payment, under the conditions and to the extent provided in this section, of the cost of hospital and nursing home services which are furnished individuals referred to in paragraphs (1) and (2) of subsection (a): Provided, That no such payment shall be made for services for which the hospital or nursing home has already been paid (excluding payments by such individuals for which reimbursement to them by the hospital has been assured); but no such agreement shall provide for payment with respect to hospital or nursing home services furnished to an individual unless the hospital or nursing home obtains written certification by the physician (if any) who referred him pursuant to subsection (c) that his hospitalization or care in the nursing home was medically necessary and, with respect to any period during which such services were furnished, written certification by such individual's attending physician during that period that such services were medically necessary. The amount of the payments under any such agreement shall be determined on the basis of the reasonable cost incurred by the hospital or nursing home for all bed patients, or, when use of such a basis is impractical for the hospital or nursing home or inequitable to the institution or the Federal Old-Age and Survivors Insurance Trust Fund, on a reasonably equivalent basis which takes account of pertinent factors with repsect to services furnished to individuals referred to in paragraphs (1) and (2) of subsection (a). Any such agreement shall preclude the hospital or nursing home with which the agreement is made from requiring payments from in

dividuals for services, payment of the cost of which is provided by this section, after it has been notified that the cost of such services is payable from the Federal Old-Age and Survivors Insurance Trust Fund, except that it may require payments from such individuals for the additional cost of accommodations occupied by them at their request which are more expensive than semiprivate accommodations.

"(4) Except as provided by regulation, no agreement may provide for payments (A) to any Federal hospital, or to any other hospital for hospital services which it is obligated by contract with the United States (other than an agreement under this section) to furnish at the expense of the United States, or (B) to any hospital for hospital services which it is required by law or obligated by contract with a State or subdivision thereof to furnish at public expense except where the eligibility of the individual for such services is determined by application of a means test.

“(5) No supervision or control over the details of administration or operation, or over the selection, tenure, or compensation of personnel, shall be exercised under the authority of this section over any hospital or nursing home which has entered into an agreement under this section.

"(6) Agreements under this subsection shall be made with the hospital or nursing home providing the services, but this paragraph shall not preclude representation of such institution by any individual, association, or organization authorized by the institution to act on its behalf.

“(7) The Secretary shall enter into agreements with qualified providers of surgical services as defined in paragraph (2) of subsection (c). Such agreements shall stipulate that the rates of payment agreed on shall constitute full payment for these services. Such agreements may be made with any qualified individual, or with any association or organization authorized by the surgeons, dentists, or physicians to act in their behalf.

"(8) Nothing in such agreements or in this Act shall be construed to give the Secretary supervision or control over the practice of medicine or the manner in which medical services are provided.

"(9) Except to the extent the Secretary has made provision pursuant to subsection (h) for the making of payments to hospitals and nursing homes by a private nonprofit organization or for the making of payments to physicians, dentists, and surgeons by their designated representatives, he shall from time to time determine the amount to be paid to such provider of service under an agreement with respect to services furnished, and shall certify such amount to the Managing Trustee of the Federal Old-Age and Survivors Insurance Trust Fund, except that such amount shall, prior to certification, be reduced or increased, as the case may be, by any sum by which the Secretary finds that the amount paid to the provider of services for any prior period was greater or less than the amount which should have been paid to it for such period. The Managing Trustee prior to audit or settlement by the General Accounting Office, shall make payment from the Federal Old-Age and Survivors Insurance Trust Fund, at the time or times fixed by the Secretary in accordance with such certification.

"Nondisclosure of information

"(e) Information concerning an individual, obtained from him or from any physician, dentist, nurse, hospital, nursing home, or other person pursuant to or as a result of the administration of this section, shall be held confidential (except for statistical purposes) and shall not be disclosed or be open to public inspection in any manner revealing the identity of the individual or other person from whom the information was obtained or to whom the information pertains, except as may be necessary for the proper administration of this section. Any person who shall violate any provision of this subsection shall be deemed guilty of a misdemeanor and, upon conviction thereof, shall be punished by a fine not exceeding $1,000 or by imprisonment not exceeding one year, or both.

"Medical and Hospital Services Under Workmen's Compensation

"(f) The provisions of subsection (a) shall not be applicable to any services which an individual required by reason of any injury, disease, or disability on account of which such services are being received or the cost thereof paid for, or upon application therefor would be received or paid for under a workmen's compensation law or plan of the United States or of any State, unless equitable reimbursement to the Federal Old-Age and Survivors Insurance Fund for the