The deductible provision, now applicable to the Part B program, would not apply in the case of expenses incurred for checkups, except that limits are placed upon the maximum charges which would constitute incurred charges for checkups. These additional benefits, would become available after June 30, 1974.

Part D

Sec. 130-Dental Services for Children: amends the new health insurance program to provide for routine dental care for children under 8 years of age. As in the case of physical checkups, the deductible provisions of the present Part B program would not apply. These benefits would become available after June 30, 1974.

Part E

Sec. 140-Limitations on Certain Charges for Services: amends effective January 1, 1971 the current "reasonable charges" section of the present Part B program and substitutes the phrase "appropriate and reasonable charges."

Sec. 141-Physicians' Qualifications: Revises under Title 18 of the Social Security Act the definition of the term "physician" by imposing certain qualifications for physicians providing services under the health insurance program. Such qualifications would be related to standards for 1) continuous professional education 2) national minimum licensure requirements 3) performance of various specialty services. Any physician or specialist failing to meet such standards would not be recognized as a "physician" for purposes of the program, although the Secretary of HEW would be required to notify the physician of any deficiency and allow for a "reasonable opportunity" to correct it.

Part F

Sec. 150-Agreements with States for Administration: amends Title 18 of the Social Security Act to allow the Secretary of HEW to arrange for State administration of the health insurance programs established pursuant to Title 18 of the Act. Reimbursement to the States for costs of carrying out such agreements would be made by the Secretary of HEW.

Part G

Sec. 160-Improvement in the Organization of Health Care: Amends Title 18 of the Social Security Act (the revised medicare program) by adding a new "Part D" to the program. The purpose of this part is to encourage the rational organization of health care services and facilities so as to provide greater continuity and comprehensiveness of care of the individual, to provide greater consumer education and participation, and to emphasize preventive, diagnostic, and early therapeutic services, to control the costs of services paid for under the title and to stimulate diversity and innovation in the provision of health insurance protection.

Part D would authorize the Secretary to develop, by means of contracts and by other methods, the growth of comprehensive health service systems. Such systems would agree to provide the basic benefits provided for in the revised health insurance program and also agree to carry out appropriate utilization and cost control responsibilities in connection with the provision of benefits. Such systems would have to be consistent with comprehensive health plans developed by each State. The Secretary would be authorized to use various means of reimbursement (other than a reasonable cost system) to pay for benefits provided by comprehensive health service systems, and could develop special incentive provisions for these systems if their costs were generally less than costs otherwise experienced by the health insurance program. A special employeremployee health plan option is authorized where employers provide for their employees' health care benefits under a qualified plan in lieu of benefits otherwise provided by the new program. The effective date of the new Part G program would be July 1, 1971.

Title II-Amendments relating to health benefits for the general public

Title II of the proposed legislation would add a new title 20 to the Social Security Act to provide for the entitlement to benefits of the revised title 18 program for all persons not otherwise so entitled by reasons of other provisions in the law. The new title 20 is composed of two sections:

Sec. 2001-Entitlement to Benefits for the Uninsured: provides that any person, who is a resident and a citizen (or an alien lawfully admitted for permanent residence), not otherwise entitled to the revised title 18 program (by reason of Sec. 226 of the Act) would be entitled to the same benefits of that program on July 1, 1973. Special provisions would govern the manner and period during which such entitlement would be established.

Sec. 2002-Trust Fund Account for the Uninsured: creates within the new Federal Health Insurance Trust Fund a special account known as the "Special Account for the Uninsured." Benefits provided for the persons entitled under title 20 would be paid from, and only from, this Special Account. This section also specifies the manner in which funds are to be appropriated to the Special Account within the Health Insurance Trust Fund.

Title III-Financing of health insurance

Title III of the proposed legislation is divided into five parts which identify and explain the taxing mechanism devised to provide the financial resources with which the national health insurance program will operate. The new title Includes amendments to the Internal Revenue Code relating to payroll deductions for the purposes of health insurance:

Sec. 301-Wage and Income Bases for Purposes of Health Insurance: amends those sections of the Internal Revenue Code of 1954 (relating to definitions for the purposes of Federal Insurance Contributions) by adding new subsections setting forth definitions of wage and self-employment income bases for purposes of health insurance. The wage and income bases on which taxes are imposed in connection with the financing of health insurance benefits provided under the proposed Act would be set at $15,000 rather than $7,800 per annum with respect to the tax paid by employees of the self-employed. No ceilings are placed on the wages with respect to taxes paid by the employer. The bill indicates that the effective date of the tax change and wage base would begin with taxable years ending after December, 1970.

Sec. 302-Definition of the Term "Employment" for the Purposes of Health Insurance amends Internal Revenue Code so as to include only within the framework of the revised taxing mechanism, certain additional categories of employees and employers formerly excluded from taxing provisions used to finance benefits under Title 18 Social Security Act. Additional categories of employees to be included for taxing purposes are: individuals engaged in family employment; federal, state and local government employees; ministers; railroad employees, individuals in employ of tax-exempt organizations; individuals in employ of registered subversive organizations. Employers of these individuals in above-mentioned categories would also be included in the taxing mechanism for health insurance with the exception of employers falling into the categories of state and local governments and churches and religious orders. Elective date of this section will be 12/70.

Sec. 303-Exception of Certain Employment for Health Insurance Taxing Purposes: provides that employment which includes the performance of service by an employee for an employer, who has in effect a contract with the Government relating to a comprehensive health service system, is excluded for purposes of health insurance taxation.

Sec. 304-Rate of Tax for Health Insurance Purposes on Employees, Employers, and Self-Employed Individuals: amends Internal Revenue Code by establishing new tax rate schedules for health insurance purposes applicable equally to employers, employees, and self-employed individuals as follows:

Sec. 304-Appropriations to Federal Health Insurance Fund: provides that in addition to funds appropriated to Federal Health Insurance Fund through taxing mechanism described above, there shall also be appropriated from general revenues an amount equal to 50% of the amount deposited in the Health Insurance Fund collected by means of the payroll tax mechanism and any additional amounts that would have been appropriated if no agreements had been authorized for employer-employee health plan options (as provided for in Part C, Title I of this bill).

Title IV—Federal aid to establish local comprehensive health service systems

Title IV is composed of seven sections which emphasize the need for a reorganization of the present health care system and provisions of Federal financial and technical assistance to affect the desired changes:

Sec. 401-Findings and Declaration of Purpose: in keeping with its findings that present programs of health services fail to provide for continuous, efficient, and comprehensive health care, Congress declares that a system of national health insurance must be established in a way that will increase purchasing power, equalize access to quality care, and affect a change in the health care system. Declares that the purpose of this title is the provision of financial and technical assistance through the awarding of grants and loans to health service institutions and organizations in order to stimulate the planning, development, and implementation of comprehensive health service systems.

Sec. 402-Basic Authority: authorizes the Secretary of Health, Education, and Welfare to make such loans, grants, etc. as are provided for under this title. Sec. 403-Systems Eligible for Financial and Technical Assistance: establishes the criteria for systems wishing to receive financial and technical assistance from the Government for the purposes of developing comprehensive health service systems. Such systems must, among other things, enter into an agreement with the Secretary to provide or arrange to provide services authorized by medicare. In addition to certain requirements concerning enrollment of beneficiaries in such systems, comprehensive health service systems must develop preventive health care programs, train and employ allied health personnel, and be organized in a manner consistent with the State's overall comprehensive health care plan.

Sec. 404-Financial and Technical Assistance for Planning Comprehensive Health Service Systems: authorizes Sec. of HEW to make grants to public or non-profit hospitals, medical schools, any insurance carriers or non-profit prepayment plans, etc. to pay 80% of the cost of planning and development of comprehensive health service systems. Applications for assistance under this title must be approved by a State health planning agency.

Sec. 405 Financial and Technical Assistance for Operation of Approved Comprehensive Health Service Systems: authorizes Secretary to contract with approved comprehensive health service system to pay so much of administrative, operating, and maintenance costs of such system as exceed its income for the first five years after approval. The contract shall require the system to make efforts to enroll members, control costs and utilization of services, and otherwise maximize income and minimize costs. Secretary may see fit to terminate contract after giving 6 months notice. Secretary is authorized to make grants to system for programs of capital development in an amount not to exceed 80% of non-Federal contributions otherwise required for construction and modernization of hospital, etc., under Title 6 of Public Health Service Act. The awarding of such a grant depends upon approval of the proposed project by the responsible State health planning agency.

Sec. 406-Appropriations: authorizes appropriations to carry out contracts pursuant to Title IV.

Sec. 407-Definitions: the term "comprehensive health service systems" is intended to identify a system providing health care to an identified population group in a primary service area on basis of contractual arrangements which embody group practice, are established by a medical school, a hospital medical staff or medical center or similar arrangements among the participating providers of services. Describes comprehensive health service systems as those which provide at least all services specified in Title 18 Social Security Act as amended by this Act.

Title V-Federally chartered health insurance corporations

Title V of the proposed Act is composed of one section which amends the Social Security Act by adding new sections authorizing the Secretary of HEW to establish various national health insurance corporations which will operate under the guidance of the Secretary.

Sec. 501-National Health Insurance Corporations: Authorizes the Secretary of Health, Education, and Welfare to establish and contract with one or more Federally chartered health insurance corporations for provision of health benefits under Title 18 of the Social Security Act. Health Insurance corporations so organized will act as agents of the U.S. Government under the guidance of the Secretary of HEW.

LEVEL OF BENEFITS-NATIONAL HEALTH INSURANCE AND HEALTH SERVICES

IMPROVEMENT ACT OF 1970

The benefits provided to all citizens of the United States under my national health insurance bill-subject to existing coinsurance and deductibles-shalı consist of no less than the following (effective for over 65 and disabled, July 1, 1971; for general public, effective July 1, 1973) :

1. Up to 90 days-with a lifetime reserve of 60 additional hospital days-of bed patient care in any participating general care, tuberculosis or psychiatric hospital. When a bed patient in a hospital, some of the services paid for include: Bed in semiprivate room (2-4 beds in a room) and all meals, including special diets;

Operating room charges;

Regular nursing services (including intensive care nursing);

Drugs furnished by the hospital;

Laboratory tests;

X-ray and other radiology services:

Medical supplies such as splints and casts:

Use of appliances and equipment furnished by the hospital such as wheelchairs, crutches, braces, etc.; and

Medical social services.

2. When the patient no longer needs the intensive care which hospitals provide, but still needs full-time skilled nursing care, he may be transferred-for up to 100 days-to an extended care facility-a specially qualified facility, staffed and equipped to furnish full-time skilled nursing care and related health services, which include:

Bed in a semiprivate room (2-4 beds in a room) and all meals, including special diets;

Regular nursing services;

Drugs furnished by the extended facility;
Physical, occupational, and speech therapy;
Medical supplies such as splints and casts;

Use of appliances and equipment furnished by the facility such as wheelchairs, crutches, braces, etc., and

Medical social services.

3. After a stay in a hospital (or in an extended care facility after a hospital stay) if the physician determines continued care can be best given at home through a home health agency, the individual will be covered for as many as 100 home health visits for further treatment of the condition for which he received services as a bedpatient in hospital or extended care facility. The home health services include:

Part time nursing care;

Physical, occupational, or speech therapy;

Part-time services of home health aides;

Medical social services;

Medical supplies furnished by the agency; and

Use of medical appliances.

4. Doctors' services no matter where he treats the patient-in a hospital, his office, an extended care facility, home, a group practice or other clinic-and included are:

Medical and surgical services by a doctor of medicine or osteopathy;

Certain medical and surgical services by a doctor of dental medicine or a doctor of dental surgery;

Services by podiatrists which they are legally authorized to perform by the State in which they practice; and

Other services which are ordinarily furnished in the doctor's office and included in his bill, such as:

Diagnostic tests and procedures;

Medical supplies;

Services of his office nurse; and

Drugs and biologicals which cannot be self-administered.

5. Ambulance service to a hospital when

(a) ambulance services are medically necessary to protect the health of the patient,

(b) transportation by other means could endanger the patient's health, and (c) the patient is taken to the nearest hospital that is equipped to take care of him (or to one in the same locality).

6. Outpatient hospital benefits which include:

Laboratory services such as blood tests and electrocardiograms;

X-ray and other radiology services;

Emergency room services; and

Medical supplies such as splints and casts.

7. In addition to "3" above, home health benefits-up to 100 home health visits each calendar year-even if the individual was not first hospitalized, if confined to home, a doctor determines home health care needed and periodically reviews the home health care plan. It would include:

Part-time nursing care;

Physical, occupational, or speech therapy;

Part-time services of home health aides;

Medical social services;

Medical supplies furnished by the agency; and

Use of medical appliances.

8. Other medical services and supplies for the treatment of illness or injuryfurnished by a doctor as part of his treatment, or by the outpatient department of a hospital, or a medical clinic in connection with treatment, includes: Diagnostic tests such as X-rays and laboratory tests;

Radiation therapy;

Portable diagnostic X-ray services furnished in your home under a doctor's supervision;

Surgical dressings, splints, casts, and similar devices;

Rental or purchase of durable medical equipment prescribed by a doctor to be used at home; for example, a wheelchair, hospital bed, or oxygen equipment, and

Devices (other than dental) to replace all or part of an internal body organ. This includes corrective lenses after a cataract operation.

9. Payment for maintenance drugs, a drug used for treatment extending over a period of 90 days or more and the withdrawal of which would be seriously harmful to the individual's health. The copayment shall be $1 until January 1974 and thereafter, an amount to be determined by the Secretary pursuant to the formula set up in the bill, effective July 1, 1973.

10. Payment of up to $75 for annual physical checkups, which include eye examinations for the purpose of prescribing, fitting, or changing eyeglasses; ear examinations for the purpose of determining the need for hearing aids; and such diagnostic X-ray, laboratory and other tests as are likely to reveal defects, diseases or conditions susceptible to effective treatment or control; including physician's services appropriate for interpretation, evaluation and analysis of such tests, for all over and under 65, effective July 1974.

11. Dental services for children under 8 years of age, including oral examinations and diagnosis, oral prophylaxis, fillings and removal of teeth, effective July 1, 1974.

STATEMENT OF HON. CLAIBORNE PELL, A U.S. SENATOR FROM THE STATE OF RHODE ISLAND

Senator PELL. Mr. Chairman, today's hearings represent an historic occasion for our Nation's health care system. Today's hearings symbolize the momentum that is developing for a reform of our Nation's