nected therewith, if such money, insurance, or contract rights do not exceed $500 in value."

(5) Section 1402(b)(1) of such Act is amended to read as follows:

"(1) Any residence requirement which excludes any resident of the State who has resided therein continuously for one year immediately preceding the application; or".

(b) The second sentence of section 1401 of such Act is amended by inserting before the period at the end thereof a semicolon and the following: "but no payment shall be made under this title to any State which has not also submitted, and had approved by the Secretary, State plans for assistance under titles I, IV, and X".

(c) Section 1403 of such Act is amended by striking out "or" at the end of paragraph (1), by adding "or" at the end of paragraph (2), and by inserting after paragraph (2) the following new paragraph:

"(3) that in the administration of the plan there is imposed, as a condition of aid to any individual, a requirement that such individual subject his home to a lien of any kind or transfer to the State agency any interest in his home;".

(d) Title XIV of such Act is amended by adding at the end thereof the following new sections:

"Direct Payments to Individuals Not Satisfying Residence Requirements "SEC. 1406. If an individual, after making application for aid to permanently and totally disabled, is denied such aid by the State agency solely because he does not satisfy the residence requirements imposed under the State plan, and if such individual is not entitled to aid to the permanently and totally disabled by reason of prior residence in another State, the State agency shall promptly notify the Secretary of the fact that such individual has made such application and would be eligible for such aid if he satisfied such requirements. The Secretary shall thereupon pay directly to such individual for each month, beginning with the first month (after the month of such individual's application) in which such individual would have been eligible for aid to the permanently and totally disabled if he satisfied such residence requirements and ending with the month preceding the first month in which he satisfies such requirements, an amount (as determined under regulations prescribed by the Secretary) equal to the Federal Government's proportionate share of the aid to the permanently and totally disabled which such individual would receive for such month if he then satisfied such requirements.

"Assistance for Needs of Recipient Only

"SEC. 1407. Assistance paid to any individual under this title is to assist him in meeting his individual needs and is not for the benefit of any other person; and such assistance shall not be regarded as income of any person other than such individual."

MISCELLANEOUS PROVISIONS

SEC. 807. (a) As used in the provisions of the Social Security Act amended by this title, the term "Secretary", except when the context otherwise requires, means the Secretary of Health, Education, and Welfare.

(b) Section 618 of the Revenue Act of 1951 (relating to public access to State public assistance records) is repealed.

(c) No check or warrant drawn in payment of assistance to any individual under title I, IV, X, or XIV of the Social Security Act, and no envelope or other outer covering therefor, shall bear any printing or marking which indicates or implies that such individual is indigent or a pauper.

(d) The amendments made by sections 803 (d), 804 (d), 805(d), and 806 (d) shall apply with respect to months beginning after the date of the enactment of this title. Section 807 (b) shall apply with respect to payments to which the States (including the agencies and political subdivisions thereof) become entitled after the date of the enactment of this title. Section 807(a) and 807 (c) shall take effect on the date of the enactment of this title. The remaining amendments made by this title shall take effect on July 1, 1960.

20. AMENDMENT 6-28-60-G-INTRODUCED BY SENATOR HUMPHREY (IDENTICAL WITH HIS BILL S. 1151)

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 service-60 days per year.

(2) Nursing home services-120 days per year (less days of hospitalization). Cost.-$2.17 billion per year, or 0.67 percent of payroll, on a level premium

basis.

$920 million per pear, or 0.44 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 of both employer and employee of one-fourth of 1 percent and on the self-employed of three-eighths of 1 percent, beginning in 1961.

NOTE. The revenues derived from the tax increases provided in the 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 6-28-60-G 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, 6-24-60-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-B (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 suits 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 longterm 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 41⁄2 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 one-half to 1 percent. As in the case of cash benefits, there would undoubtedly be in

sistent 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 revSuch appropriation would provide for a more equitable distribution of the fiscal load than would a payroll tax on earnings of $4,800 or less.

enues.

TEXT OF AMENDMENT 6-28-60-G

Intended to be proposed by Mr. HUMPHREY 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-HOSPITALIZATION AND NURSING INSURANCE

PART 1-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 NURSING 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, shall, subject to the provisions of this section, be paid from the Federal Old-Age and Survivors Insurance Trust Fund to the hospital or 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 therefore, 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 provisions 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 clause (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 or nursing home furnishing the hospital 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 twelve-month 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 twelve-month 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 and nursing home 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 and Nursing Home 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.

"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) 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 hospital 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.

"Agreements With Hospitals and Nursing Homes

"(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 respect 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 individuals 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 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) 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, 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.