payments hereunder with respect to such services have been made or assured pursuant to agreements or working arrangements negotiated between the Secretary and the appropriate public agency. Notwithstanding the above sentence, if (1) the individual's entitlement to receive such services (or to have the cost thereof paid for) under such a workmen's compensation law or plan is in doubt when such services are required, (2) the cost of such services is otherwise payable from the Federal Old-Age and Survivors Insurance Trust Fund pursuant to this section, and (3) the individual makes an appropriate application under such workmen's compensation law or plan and agrees, in the event that he is subsequently determined to be entitled to receive such services (or to have the cost thereof paid for) under such law, to reimburse the Federal Old-Age and Survivors Insurance Trust Fund in the amount of any loss it might suffer through its payment for such services, then the cost of such services may be paid from such Trust Fund in accordance with this section. In any case in which the cost of services is paid from the Federal Old-Age and Survivors Insurance Trust Fund pursuant to the immediately preceding sentence, or is paid from such Trust Fund with respect to any such injury, disease, or disability for which no reimbursement to such Trust Fund has been made or assured pursuant to the first sentence of this subsection, the United States shall, unless not permitted under the law of the applicable State (other than the District of Columbia) be subrogated to all rights of such individual, or of the provider of services to which payments under this section with respect to such services are made, to be paid or reimbursed pursuant to such workmen's compensation law or plan for such payments. All amounts recovered pursuant to this subsection shall be deposited in the Treasury of the United States to the credit of the Federal Old-Age and Survivors Insurance Trust Fund.

"Regulations and Functions of Advisory Council

"(g) All regulations specifically authorized by this section shall be prescribed by the Secretary. In administering this section, the Secretary shall consult with a National Advisory Health Council consisting of the Commissioner of Social Security, who shall serve as Chairman ex officio, and eight members appointed by the Secretary. Four of the eight appointed members shall be persons who are outstanding in fields pertaining to hospital and health activities, and the other four members shall be appointed to represent the consumers of hospital, nursing home, and surgical services, and shall be persons familiar with the need for such services by eligible groups. Each appointed member shall hold office for a term of four years, except that any member appointed to fill a vacancy occurring prior to the expiration of the term for which his predecessor was appointed shall be appointed for the remainder of such term, and the terms of office of the members first taking office shall expire, as described by the Secretary at the time of appointment, two at the end of the first year, two at the end of the second year, two at the end of the third year, and two at the end of the fourth year after the date of appointment. An appointed member shall not be eligible to serve continuously for more than two terms but shall be eligible for reappointment if he has not served immediately preceding his reappointment. The Council is authorized to appoint such special advisory and technical committees as may be useful in carrying out its functions. Appointed Council members and members of advisory or technical committees, while serving on business of the Council, shall receive compensation at rates fixed by the Secretary, but not exceeding $50 per day, and shall also be entitled to receive an allowance for actual and necessary travel and subsistence expenses while so serving away from their places of residence. The Council shall meet as frequently as the Secretary deems necessary, but not less than once each year. Upon request by three or more members it shall be the duty of the Secretary to call a meeting of the Council.

"Utilization of Private Nonprofit Organizations

"(h) (1) The Secretary may utilize, to the extent provided herein, the services of private nonprofit organizations exempt from Federal income taxation under section 501 of the Internal Revenue Code of 1954 which (A) represent qualified providers of hospital, nursing home, or surgical services, or (B) operate voluntary insurance plans under which agreements, similar to those provided for under subsection (d), are made with hospitals, nursing homes, and physicians for defraying the cost of services. Such organizations shall be utilized by the 58387-60-32

Secretary to the extent that he can make satisfactory agreements with them and to the extent he determines that such utilization will contribute to the effective and economical administration of this section. Such agreements shall not delegate (A) his functions relating 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 section and the amount of such payment, and (B) his functions relating to the making of regulations.

“(2) An agreement under paragraph (1) shall provide for payment from the Federal Old-Age and Survivors Insurance Trust Fund to the organization of the amounts paid out by such organization to hospitals, nursing homes, physicians, and dentists, under this section and of the cost of administration determined by the Secretary to be necessary and proper for carrying out such organization's functions under its agreement pursuant to this subsection. Such payments to any organization shall be made either in advance on the basis of estimates by the Secretary or as reimbursement, as may be agreed upon by the organization and the Secretary, and adjustments may be made in subsequent payments on account of overpayments or underpayments previously made to the organization under this subsection. Such payments shall be made by the Managing Trustee of the Trust Fund on certification by the Secretary and at such time or times as the Secretary may specify and shall be made prior to audit or settlement by the General Accounting Office.

"(3) An agreement under paragraph (1) with any organization may require any of its officers or employees certifying payments or disbursing funds pursuant to the agreement, or otherwise participating in its performance, to give surety bond to the United States in such amount as the Secretary may deem necessary, and may provide for the payment of the cost of such bond from the Federal Old-Age and Survivors Insurance Trust Fund.

"Certifying and Disbursing Officers

"(i) (1) No individual designated by the Secretary pursuant to an agreement under this section, as a certifying officer shall, in the absence of gross negligence or intent to defraud the United States, be liable with respect to any payments certified by him under this section.

"(2) No disbursing officer shall, in the absence of gross negligence or intent to defraud the United States, be liable with respect to any payment by him under this section if it was based upon a voucher signed by a certifying officer designated as provided in paragraph (1).

"Adjustments in Cash Benefits

“(j) For purposes of section 204, any payment under this section to any hospital, nursing home, physician, or dentist, with respect to hospital, nursing home or surgical services furnished an individual shall be regarded as a payment to such individual."

(b) The amendments made by subsection (a) shall be effective on the first day of the twelfth calendar month after the month in which this Act is enacted. (c) Notwithstanding the provisions of section 226 (a) (2) of the Social Security Act, as amended by this title, and subsection (b) of this section, applications filed under such section 226 which would otherwise be valid shall, subject to regulations of the Secretary, be considered valid even though filed more than three months prior to the effective date of this title, but not if filed prior to the first day of the fourth calendar month after the month in which this title is enacted.

AMENDMENTS TO THE INTERNAL REVENUE CODE

SEC. 602. (a) Section 1401 of the Internal Revenue Code of 1954 (relating to rate of tax on self-employment income) is amended to read as follows: "SEC. 1401. RATE OF TAX.

"In addition to other taxes, there shall be imposed for each taxable year, on the self-employment income of every individual, a tax as follows:

"(1) in the case of any taxable year beginning after December 31, 1960, and before January 1, 1963, the tax shall be equal to 4% percent of the amount of the self-employment income for such taxable year;

"(2) in the case of any taxable year beginning after December 31, 1962, and before January 1, 1966, the tax shall be equal to 5% percent of the amount of the self-employment income for such taxable year;

"(3) in the case of any taxable year beginning after December 31, 1965, and before January 1, 1969, the tax shall be equal to 6% percent of the amount of the self-employment income tax for such taxable year; and

"(4) in the case of any taxable year beginning after December 31, 1968, the tax shall be equal to 7% percent of the amount of the self-employment income for such taxable year."

(b) Section 3101 of such Code (relating to rate of tax on employees under the Federal Insurance Contributions Act) is amended to read as follows:

"SEC. 3101. RATE OF TAX.

"In addition to other taxes, there is hereby imposed on the income of every individual a tax equal to the following percentages of the wages (as defined in section 3121(a)) received by him with respect to employment (as defined in section 3121(b)) —

"(1) with respect to wages received during the calendar years 1961 and 1962, the rate shall be 34 percent;

"(2) with respect to wages received during the calendar years 1963 to 1965, both inclusive, the rate shall be 33⁄44 percent;

"(3) with respect to wages received during the calendar years 1966 to 1968, both inclusive, the rate shall be 44 percent; and

"(4) with respect to wages received after December 31, 1968, the rate shall be 44 perecent."

(c) Section 3111 of such Code (relating to rate of tax on employers under the Federal Insurance Contributions Act) is amended to read as follows: "SEC. 3111. RATE OF TAX.

"In addition to other taxes, there is hereby imposed on every employer an excise tax, with respect to having individuals in his employ, equal to the following percentages of the wages (as defined in section 3121(a)) paid by him with respect to employment (as defined in section 3121(b)) —

"(1) with respect to wages paid during the calendar years 1961 and 1962, the rate shall be 34 percent;

"(2) with respect to wages paid during the calendar years 1963 to 1965, both inclusive, the rate shall be 34 percent;

"(3) with respect to wages paid during the calendar years 1966 to 1968 both inclusive, the rate shall be 44 percent; and

"(4) with respect to wages paid after December 31, 1968, the rate shall be 44 percent."

(d) The amendment made by subsection (a) shall apply only with respect to taxable years beginning after December 31, 1960. The amendments made by subsections (b) and (c) shall apply only with respect to remuneration paid after December 31, 1960.

12. AMENDMENT 6-27-60-H-INTRODUCED BY SENATOR JAVITS FOR HIMSELF AND THE FOLLOWING SENATORS: COOPER, SCOTT, FONG, AIKEN, KEATING, AND PROUTY (IN THE NATURE OF A SUBSTITUTE FOR TITLE VI OF THE HOUSE BILL)-SIMILAR TO S. 3350

STAFF ANALYSIS

Eligibility. Assuming all States participate, all persons 65 and over and their spouses would be eligible to purchase a health insurance policy provided by an insurance carrier set up by the State, or by private, commercial prepayment or nonprofit insurance carriers under appropriate contracts entered into between such carriers and the State. The subscription charges for individuals under the plan shall conform to a schedule, based upon the income of the subscriber, to be determined by the State (except that the maximum monthly subscription of no individual shall exceed the maximum premium cost in the State if it is less than $13 a month).

Benefits.-The health insurance contracts may provide any or all of the following:

(1) Services rendered by licensed physicians and dentists and certain auxiliary personnel.

(2) Services in hospitals and skilled nursing or convalescent homes.

(3) Drugs, medicines, dressings and other medical supplies.

The contracts must provide for the following:

(1) 21 days a year of hospital, or equivalent nursing home care.

(2) Physician's services for 12 home or office visits each year.

(3) The first $100 each year of costs for ambulatory, diagnostic, laboratory, and X-ray services.

(4) Visiting nurse service for not less than 24 visits a year.

The State plan must provide that outpatient hospital and home and office physicians service constitute not less than one-third of the premium cost. Costs.-Senator Javits estimates minimum benefits program would cost $840 million (Federal share $400 million; State share $440 million; individual subscribers not participating) and maximum benefits program would cost $1.5 billion (Federal share $480 million; State share $620 million; individual subscribers $400 million). Cost estimate not yet submitted by Department. See report below.

Financing.-Federal share financed from general revenues, using a FederalState matching formula based on State per capita income. The Federal share ranging from 75 percent for the lowest-income States to 33% percent for highest income States, up to a maximum premium cost of $13 a month per subscriber, less subscription charges paid by individuals.

VIEWS OF THe DepartmeNT OF HEALTH, EDUCATION, AND WELFARE ON AMENDMENT 6-27-60-H

The Department of Health, Education, and Welfare is currently conferring with the sponsors of proposed amendment 6-27-60-H to H.R. 12580 and is, therefore, not prepared to make recommendations at this time on the proposed amendment. At such time as these discussions are completed, a further report will be made.

While the amendment embodies many of the principles contained in the statement of the Department's views which were presented to the Committee on June 29, 1960, there are obviously a number of points of difference.

TEXT OF AMENDMENT 6-27-60-H

Intended to be proposed by Mr. JAVITS (for himself, Mr. COOPER, Mr. SCOTT, Mr. FONG, Mr. AIKEN, Mr. KEATING, and Mr. PROUTY) to the bill (H.R. 12580), viz: Strike out everything beginning on page 154, line 2, down to and including page 172, line 18, and insert in lieu thereof the following: SEC. 601. This title may be cited as the "Health Insurance for the Aged Act". SEC. 602. The Public Health Service Act is hereby amended by inserting at the end thereof the following new title:

“TITLE VIII—HEALTH INSURANCE FOR THE AGED

"DECLARATION OF PURPOSE

"SEC. 801. It is the purpose of this title to assist the States in establishing State plans of health insurance designed to enable aged individuals to obtain needed personal health services.

"DEFINITIONS

“Sec. 802. As used in this title, the term—

"(a) Service benefits' means the actual furnishing of health services to an insured individual by and through licensed physicians, hospitals, and other health personnel and institutions which have entered into contracts with insurance carriers to provide such services to such individuals;

“(b) ‘Indemnity benefits' means benefits provided to an insured individual by an insurance carrier in the form of money payments toward the cost of specified personal health services, such payments being made either to the insured individual or to the provider of such services, and not necessarily covering the full cost of such services;

“(e) 'Income of insured individual' means the adjusted gross income (as defined in section 62 of the Internal Revenue Code of 1954) of such individual, plus amounts received by such individual as monthly insurance benefits under title II of the Social Security Act or as payments under laws administered by the Veterans Administration, or as annuity payments under the Railroad Retirement Act of 1937 as amended; and

"(d) 'Secretary' means the Secretary of Health, Education, and Welfare.

"REQUIREMENTS OF STATE PLANS

"SEC. 803. A State plan under this title shall

"(a) designate a single State agency to administer the State plan; "(b) provide for financial participation by the State;

"(c) permit participation in the health insurance program established under such plan of every individual in the State who has attained age sixtyfive or is married to an individual who has attained such age; but may not permit any individual to participate in such program who has not attained such age or is not married to an individual who has reached such age;

"(d) provide to each individual eligible for health insurance under the plan a choice of at least two types of health insurance, one of which shall provide 'service benefits' in whole or in part and the other 'indemnity benefits';

"(e) provide that (1) the coverage of home medical services and physician's office calls and other ambulatory services or hospital outpatient treatment under any health insurance program under the State plan shall constitute not less than one-third of the total premium cost of such insurance program; and (2) under any such program, care in skilled nursing homes or equivalent licensed institutions may be substituted for care of equivalent cost in general hospitals which meet such standards as are established by the Secretary; "(f) conform to reasonable standards prescribed by the Secretary with respect to (1) the providing of benefits to subscribers of health insurance programs under the State plan during temporary absence from the State in which they reside, (2) the eligibility to participate in such programs of otherwise eligible individuals who have previously discontinued participation therein, (3) the provision of additional periods after the date subscription charges become due during which subscribers may pay such charges without forfeiting coverage under such programs, (4) eligibility of individuals to transfer coverage from one type of health insurance to another type offered under the State plan of a State, (5) the period of eligibility to participate in such programs of individuals who do not elect to participate therein at the earliest date for which they are eligible to do so, (6) the eligibility of individuals who are covered by such a health insurance program of one State to become covered by such a health insurance program of another State, and (7) meeting and improving on Federal standards for medical practice and institutional facilities;

"(g) provide that the subscription charges for individual subscribers of health insurance programs under the State plan shall conform to a schedule, based upon income of the subscriber, to be determined by the State (except that the maximum monthly subscription rate of no individual shall exceed the maximum premium cost in such State if it is less than $13 per month): "(h) provide that the State agency administering State welfare or public assistance programs shall be permitted to secure for the recipients of such programs health insurance under the State plan as a negotiated rate basis; "(i) make provision (1) authorizing employees' pension or welfare funds to contribute to the payment of subscription charges under the State health insurance program for or on behalf of eligible members or beneficiaries of such funds, (2) authorizing employers (including the State or any political subdivision thereof when acting as an employer) to contribute to the payment of their employees' subscription charges under the State health insurance program, and (3) permitting any employee, or member or beneficiary of an employees' pension or welfare fund, to authorize his employer (including the State or any political subdivision thereof when acting as an employer) or trustee or other governing body of such fund to deduct from his wages or from such fund, as the case may be, an amount equal to his subscription charges under the State health insurance program and to pay the same to the State agency administering the State plan;

"(j) provide that the State agency will make such reports, in such form and containing such information, as the Secretary may from time to time require, and comply with such provisions as the Secretary may from time to time find necessary to assure the correctness and verification of such reports;

"(k) provide for the collection of subscription charges for health insurance under the State plan.

"(1) provide that the health insurance coverage extended to individuals eligible therefor under the State plan shall be provided by an insurance carrier set up by the State for such purpose, or by private, commercial, pre