Presentation: Kennedy's Program for the Aged:

...Essentially, these conditions are those generally accepted as being necessary for quality care...

...The President has already said that health insurance for the aged is not a program of socialized medicine...

...There would be an advisory council to advise the Secretary on policy matters in connection with program administration...

...It would give added substance to the freedom of doctor and patient together to choose the kind of care best suited to the patient's needs...

...It seems to me that a program which would lift unmanageable cost burdens from an aged patient needing hospital care would also be a relief to the physician, for he could hospitalize his patient when necessary without fear of the economic consequences to the sick person...

...However, it is impossible to know when serious illness will strike, so heavy medical care costs are unpredictable...

...The many, many aged persons barely able to provide the necessities of life for themselves do not want charity based on a means test...

...The prerogatives of doctors and patients would remain unchanged...

...Aged persons—including those with average and even above-average income —constantly face the threat that cosily medical care will wipe out their savings and force them after a lifetime of independence to seek aid from their children or from public or private charity...

...The patient would choose his own doctor, who in turn would be absolutely unhindered in practicing his profession...

...For half of these couples with a hospitalized illness, total medical bills incurred were over $700, more than the cost of a modest food budget for the year...

...Just as Old-Age and Survivors benefits under Social Security have been accompanied by a growth in supplementary pensions and life insurance, I would expect the insurance industry successfully to offer supplementary private health insurance to accompany health insurance under Social Security...

...A Federal Reserve Board Survey in 1959 showed that of the "spending units" headed by an elderly person, 29 per cent had no bank accounts or Savings Bonds and 17 per cent had less than $500...

...The existence of the basic program would make it feasible for the individual to attempt realistically to obtain adequate health protection in old age...

...now it is about $32, and the end is not in sight...

...More than half the remaining aged would be eligible for care in veterans hospitals or under the public assistance programs...

...As a result, older persons spend two to three times as many days in the hospital, on the average, as do younger persons—1,778 as compared with 764 days per 1,000 persons, according to the National Health Survey data...

...A new benefit period would not begin until the beneficiary had been out of the hospital or skilled nursing home for 90 days...

...They may easily be so great as to undermine the floor of protection established by the monthly cash benefits...

...The program would start with respect to inpatient hospital, out-patient hospital diagnostic and home health services on October 1, 1962...

...Within the framework of our institutions we have the capacity and the material and human resources to assure a full life and a fair measure of happiness for more of our people...

...Different studies of this income may come up with somewhat different answers, depending upon the definitions used, but almost any one of these is likely to show that some 50 to 60 per cent of all persons aged 65 and over have less than $1,000 in cash income during the year...

...They will not get needed care under these conditions until care is forced upon them by a medical crisis...

...Coupled with this generally low income and poor financial position is the greater need of aged persons for medical care...

...This freedom of choice is inevitably compromised when an aged patient needs but cannot afford hospital care and is unwilling to plead pauperage to obtain it...

...They cannot provide the sense of security which attends the continuing assurance that the means of paying for needed health care is available whenever that care is required...

...About one out of every five aged is either confined to the house or has trouble getting around by himself...

...The argument has also been advanced that the program would crowd the hospital beds with aged persons...

...In this way we can demonstrate, in these days of international competition, the vigor and strength and adaptability of our system and its ability through the cooperation of public and private agencies to provide a good way of life for older people...

...This includes only the private expenditures of the noninstitutional population, leaving out the heavy costs for terminal illness among aged persons living alone...

...I have too great a respect for the integrity of doctors and hospital admission practices to believe that aged persons who do not require hospital care will be admitted to hospitals in very many instances...

...Of those not covered, about 250,000 former Federal Government employees will be entitled to health benefits at least equivalent in value to those proposed...

...They conceal wide variations, giving no indication of the very heavy financial burden that may be placed upon many individuals requiring hospitalization...

...The total number of persons 65 years of age and over at that time will exceed 17.7 million and may approach 13 million...

...These contributions would amply cover the cost of all the benefits to be provided and would keep the Social Security systems self-supporting...

...Less than one-fifth of all persons aged 65 or over are married women, however, and many of the married couples have an income of less than $2,000 between them...

...As people become older, millions find themselves confronted with the harassing fact of low income on one side, and the worry if not the fact of greater need for medical services on the other...

...Aged persons also see the physician more often than do younger persons, 6.8 as against 4.8 visits a year on the average...

...Since the heaviest medical financial burden falls upon aged persons requiring hospital care, the Administration has felt that the major costs of hospital care was the proper point of concentration in this insurance proposal...

...As is the case with other Social Security benefits, the individual could build upon this basic social insurance protection and by his own means obtain protection against the cost of physicians' and dentists' services, drugs and other health items not covered by the proposed legislation...

...There will always be people with special needs that cannot be met through social insurance and other public and private pension plans and must therefore apply for public assistance...

...4. Home health services of up to 240 home visits in a calendar year...

...In effect, this unit of service limitation would mean that any beneficiary spending 60 days or less in the hospital would be entitled to 180 days in a skilled nursing home...

...The bill sets forth certain basic requirements for participation in the program that are prerequisites to good hospital administration...

...The medical assistance for the aged program, established in the Social Security Amendments of 1960, will still be needed...

...Less than half the aged have health insurance of any sort to meet the costs of hospitalized illness, and those who need it most—the retired, those with low incomes, or those with major health problems—are the least likely to have it...

...Home health services would enable many older people to receive care in their own homes...

...It would also encourage beneficiaries "to seek early diagnosis and treatment and thus enable them to avoid later hospital admission and perhaps an early death because of the advances of a detectable malady...

...These are the opening words of the Health Message President Kennedy delivered to Congress on February 9, and the great challenges facing the United States in assuring the health of the people must be viewed within the broad scope of this overriding context...

...In addition, a state could recommend to the Secretary of Health, Education and Welfare that higher conditions be established for providers of service in that state...

...Indeed, close to one-fifth of public expenditures for medical care are in behalf of aged persons, although they constitute less than one-tenth of the population...

...It would provide payment for the cost of inpatient hospital care (after a deductible), skilled nursing home care after hospitalization, hospital outpatient diagnostic services (after a deductible), and visiting nurse and related home health services...

...Skilled nursing service benefits would begin on July 1, 1963...

...Those aged who live in the home of a younger relative— persons not generally very well off— are not even considered in these figures...

...They alone, among the expenditures which the aged face, may, with unanticipated suddenness, destroy the financial security of an aged person, and effectively render the security afforded by the monthly benefits meaningless...

...In 1951, the average was $18 a day...

...Thus, even if you allow for equal sharing by husband and wife there would be little change in the number with incomes of less than $1,000 a year...

...Again, these average expenditures understate the magnitude of the problem facing many aged persons, owing to the erratic incidence of illness...

...It would do all this without changing or interfering with the way the individual gets his health care or the way the doctor or hospital provides it...

...A stay in a hospital usually means total medical costs will be high...

...In general, however, those with the lowest incomes are those least likely to have a nest egg set aside for a rainy day...

...These agencies would advise us whether individual hospitals, nursing homes and home health agencies met the conditions for participation...

...The Administration-sponsored health insurance for the aged bill has been introduced in the Congress by Senator Clinton P. Anderson, Democrat of New Mexico and Congressman Cecil R. King (D.-Cal...

...Two questions have been paramount in this proposal for health insurance for the aged: What will be the effect of this program on the doctor's freedom to practice medicine and upon his relations with patients...

...As private means by themselves do not appear adequate to meet this need, public programs are necessary...

...3. Outpatient hospital diagnostic services with a $20 deductible applied for each diagnostic study...

...2. Skilled nursing home services for up to 180 days immediately after discharge from a hospital...

...On signing the Social Security Act in 1935, President Franklin D. Roosevelt said, "This law represents a cornerstone in a structure which is now being built but is by no means complete...

...Thus, a beneficiary spending the full 90 days in the hospital would be entitled to a maximum of 120 days of skilled nursing home care...

...The State agencies would also consult with the providers to assist them in improving their services and administration...

...of course, a key part of the President's health program...

...A participating hospital would need to be licensed by the state, have 24-hour nursing service, maintain adequate medical records, have by-laws for staff physicians and have a committee of physicians to review necessity for admissions, lengths of stay and services provided...

...Average costs of hospitalization have been rising, of course, for a long time...

...Similarly, participating nursing homes would need to be licensed, have medical policies established by physicians, maintain adequate medical records, provide 24-hour nursing service and have a nursing facility utilization plan...

...Responsibility for administering it would rest with the Secretary of Health, Education and Welfare for Social Security beneficiaries and with the Railroad Retirement Board for Railroad Retirement annuitants...

...The state assistance programs will be able to do a better job if the basic health needs of most people are met through Social Security and the states, do not have to carry a large financial and administrative burden in meeting these needs...

...These increasing health needs lead, perforce, to an increased use of the various medical services...

...A 1957 study of aged Social Security beneficiaries showed that at least one member of every fifth beneficiary couple was hospitalized during the year...

...The health insurance for the aged proposal calls for a well-rounded, yet modest, program of health services to be financed through the Social Security and Railroad Retirement systems...

...It would enable people to take a long step toward preventing dependency by helping them remain self-reliant through their years of retirement...

...The addition of health benefits to the cash retirement benefits under the Social Security system would do much to close this gap...

...However, the proposal includes other benefits which would serve as less expensive substitutes for hospital care, and would assure that care given under the program would be geared to the level the doctor feels is appropriate to the patient's condition...

...The Social Security insurance method would provide the means of spreading the cost of health services in old age over the working years...

...Under the proposed program, some 14.2 million persons eligible for benefits under the Social Security and Railroad Retirement programs would be eligible for health benefits by the time the program got into full operation in 1963...

...Skilled nursing home services were included to assure that less expensive facilities than hospitals could be used for convalescence...

...What changes will it cause in hospital practices...

...As the President said in his Health Message, the health insurance for the aged program will meet the needs of the millions of the aged who do not want charity, but whose entire financial base for security—and often that of their children-—may be shattered by an extended hospital stay...

...Income data available on the aged vividly illustrate their limited financial ability...

...Under it, services to the aged would be provided in a way that preserves the dignity of the individual...

...They provide a dependable basis on which retired persons can plan expenditures...

...However, any day beyond the 60th spent in a hospital would reduce the potential skilled nursing home benefit by two days...

...There is another basic reason why I favor providing health insurance for the aged as an addition to the existing Social Security insurance program...

...For a hospital, skilled nursing home or home health agency to be eligible to participate in the program, it would be required to meet certain specified conditions set forth in the bill...

...In applying these standards and in the program's relations with providers, we anticipate that considerable reliance would be placed on state agencies...

...Such data for individuals do not indicate how many persons the income must support, so that some wives dependent upon their husbands may be counted as having little or no income...

...True, limiting the issue to income does not present a complete picture...

...Hospital outpatient diagnostic services would reduce the need for hospital admissions for diagnostic purposes...

...All the data which we have and the personal experience which we gather point to an urgent need to protect our older citizens against the hardships of expensive illness...

...Health insurance for the aged is...

...By their very nature, they can become operative only after every other resource has been spent...

...This increased need for and use of medical services by the aged is reflected in expenditures for medical care...

...National Health Survey data show that three-fourths of all aged persons not in institutions have one or more chronic conditions...

...Health insurance for the aged is an urgently needed addition to this structure...

...Monthly benefits for retired workers and their families under this program are intended basically to serve as a partial replacement of the income lost owing to retirement...

...Opponents of health insurance for the aged have quoted one particular survey made last year by two university men which showed a considerably more favorable income figure...

...These services would include intermittent nursing care, physical therapy and part-time homemaker services...

...However, hospital utilization is likely to stabilize in time at little above the present use levels for the insured aged...

...Even now, aged persons with private health insurance use more days of hospital care on the average than those without such insurance...

...Both inpatient hospital and skilled nursing home services would be subject to an over-all limitation of 150 "units of service" during any benefit period, with one day of inpatient hospital services or two days of skilled nursing home care equal to one unit of service...

...The services of the private physician are excluded from the bill...

...An aged person should be able to receive the care he needs irrespective of his financial resources and without being required to demonstrate complete poverty before the care is made available...

...But this survey excluded from its sample all non white persons and all persons receiving old age assistance, the very groups most likely to have the lowest incomes...

...And this survey does not include the hospitalization experience of persons who died during the survey year prior to the interview, which means that the findings probably understate the actual situation by a fair percentage...

...It is apparent that this need is not likely to be met solely by private insurance, since the heavy use of medical care services and facilities by aged persons would necessitate a premium which most could not afford from their limited incomes...

...Following enactment of the proposed health insurance program, the stales, if they wished, could liberalize their income tests and otherwise work toward a more effective health care program for the few aged persons who would still need help in meeting their medical care costs...

...PRESENTATION Kennedy's Program for the Aged By Wilbur J. Cohen The controversy which has enveloped the Administration's proposal of medical aid to the aged under Social Security has all but obscured the program itself...

...This level seems reasonable in view of existing need...

...True, a program which relieves an aged person of the worry about cost and allows him to get hospital care when his physician recommends it would somewhat increase the use of hospitals by the aged...

...As with other major economic hazards, prepaid basic protection against the high cost of illness in old age can—and in my opinion should—be provided through the national Social Security insurance program...

...Under it, benefits would be available to all persons 65 and over who are receiving, or who have applied for and are eligible to receive, Social Security or Railroad Retirement benefits...

...Older persons are more likely to have savings than are younger persons...

...Twenty-six years ago, the initiation of the Social Security program established a basis for the relief of economic dependency...

...Two out of every five aged persons have a chronic condition that prevents or limits their usual activity...

...Here "Wilbur J. Cohen, one of the chief architects of the original Social Security Act in 1935 and now Assistant Secretary of Health, Education and Welfare for legislation, discusses the details of the program and its objectives...

...The services provided would include: 1. Inpatient hospital services for up to 90 days, with the program paying all costs in excess of a deductible—to be paid by the patient— of $10 a day for the first nine days, but with a $20 minimum...

...It, like the Old-Age, Survivors and Disability Program now in effect, would not provide more than basic protection...

...In formulating the conditions for participation, the Secretary would consult with the States, with the Advisory Council and with such accrediting bodies as the Joint Commission on Accreditation of Hospitals...

...Persons aged 65 and over spend twice as much for medical care in a year as do persons under age 65, according to a Health Information Foundation survey...

...The health of our nation is a key to its future—to its economic vitality, to the mo-rale and efficiency of its citizens, to our success in achieving our goals and demonstrating to others the benefits of a free society...

...No service performed by a private physician at either home, office or in the hospital, and no fee he charges for such services would be involved, covered or affected...

...Programs relying upon a means test as a primary criterion for eligibility cannot effectively meet this need...

...Among those 75 or older, almost every third person is confined to the house or needs help getting around outside...

...The health picture grows worse with increasing age...

...Data from the Bureau of the Census, for example, show 55 per cent of the aged with less than $1,000 income in 1959...

...This program would be financed by an increase in Social Security tax contributions of one-quarter of 1 per cent each on employers and employes, and three-eighths of 1 per cent on the self-employed, plus an increase in the maximum earnings subject to the tax from $4,800 to $5,000...

...It also leaves out most of the cost of care in nursing homes, mental, or tuberculosis hospitals and other institutions, which are usually publicly financed...

...Moreover, most of the savings of the aged are in the form of homes or life insurance and are not readily available to meet the costs of medical care...

...Just as in the area of income maintenance — old-age, dependency and disability — public assistance is a resource when other means have failed...

...Aged people go to the hospital more often and stay longer than those at younger ages...