March 31, 1965
Medicare v. Eldercare -A Big Issue Finally Resolved
As I write this report the House of Representatives is about to resolve an issue that has been stirring passions -- and congressional mail -- for years on end. By the time you read this the vote should have occurred. I am writing you today in order that you may share my thoughts on the eve of a great vote affecting the lives and needs of all of us.
The bill we are about to vote on is "Medicare" -- not a new subject to you or me. In fact, for four years and three campaigns we have been doing a lot of talking about it in Arizona. Many of you will recall that one of my 1962 newsletters discussed the subject in the mistaken belief that I would have a chance to vote on it that year; I didn't.
By the time you read this I predict the bill will have passed the House by a substantial margin and will have gone to the Senate, where a similar measure was approved last year. There seems little doubt that the President will sign the bill before many weeks have passed. What will the bill do? Why have I decided to vote for it? What were the alternatives? These are questions I want to discuss in this report.
If a system of representative democracy works properly (and ours does), no major legislation passes the Congress unless congressmen and senators are convinced that (a) there is a serious problem to be solved, (b) the Federal government is the proper one to solve it, and (c) a majority of the American people want it solved by the particular bill in question. All three of these tests were met in this case.
A REAL PROBLEM EXISTS
Older people -- those over 65 -- are a growing
segment of our population. Nearly one American out of every 10 is in this
age group, and the segment is increasing every year. While medical care
is a serious matter for all Americans, this group has special problems:
In my 1962 newsletter I printed samples of the thousands of cases in which retirement years have been turned into nightmares of debt and disillusionment for people who have led useful lives, only to see major illnesses wipe out their life savings. Others wrote of their shock at having health insurance policies cancelled without warning. Hundreds of such cases have come across my desk. Every reader will know of others.
WHAT SHOULD BE DONE?
No amount of oratory about self-reliance is going to keep our older citizens from getting sick, nor will it put money in savings accounts of retired persons who have exhausted their savings and can't get a job. This great wealthy society has never totally ignored such facts; we have always had some recourse, however painful, for those who needed care. We have provided this care, and we will continue to provide such care, somehow, at some level of government. No matter how we do it, it will cost money.
In all this debate there have been essentially
three different approaches and three different philosophies. Let's see
what they are:
It seems certain a big majority of the House and Senate will choose the solution and philosophy of the Medicare proposal as the best of these alternatives.
SHOULDN'T LOCAL GOVERNMENTS DO THIS JOB?
I believe the Federal government should undertake
to solve problems only when private enterprise and local governments cannot
do the job. It is clear to me that this is a case for Federal action. Let's
look at the state governments first. Kerr-Mills is essentially a
solution to this problem. We've had five years experience with it, and
in my judgment it is a miserable failure:
HOW ABOUT PRIVATE INSURANCE?
Three years ago we heard a great deal about the capacity of the private insurance industry to meet this need. However, these arguments only prompted thousands of aged ex-policy-holders to recite their experiences of cancellations when illness struck. In an attempt to bolster their position various private companies combined their resources to offer special plans for older citizens. How have they done? They have not done well.
Many of these plans, such as "New York 65" and "Connecticut 65", have had to raise their rates substantially after initial periods of operation. The plans vary enormously; the lower the premium, the less you get. The "Golden 65" plan of Continental Casualty Co. is fairly complete
3.but costs a couple over $600 a year -- obviously more than millions of retired persons can afford.
THE AMERICAN MEDICAL ASSOCIATION
In my public career, and in my career as a lawyer, I have had the privilege of meeting and working with a large number of Southern Arizona physicians. With few exceptions I have found them to be sincere, humanitarian, progressive citizens who work hard at an arduous and increasingly complex profession. The vast majority of them give time and service to charity and non-paying cases. I have rarely met a doctor I did not like and respect.
In the judgment of this congressman the medical profession has been badly advised and poorly led by its national organization, the American Medical Association. Too often the AMA has taken the path of obstruction when a progressive and humanitarian course would have been better for the profession and the country. Dominated by an obsessive fear of "socialized medicine" (which I oppose, and which nearly all Members of Congress oppose), the AMA has played a largely negative role through the years.
In the 1930s the AMA denounced Social Security itself as a "compulsory socialistic tax" which would lead to totalitarianism. Later the AMA opposed extension of Social Security benefits to the permanently and totally disabled at age 50, calling it "a serious threat to American medicine." It tried to stop Federal grants for maternal and child welfare programs, charging that this program to reduce the death rate among mothers and children tended "to promote communism." And, finally, the AMA fought long and hard against adoption of Blue Cross-type voluntary health insurance programs, the very thing they now praise most highly.
"It is a sad fact," the Journal of the American Hospital Association wrote in 1949, "that through the 1930s and early 1940s the AMA did not believe in voluntary sickness insurance, did almost everything possible to prevent its development."
The AMA's zig-zag course reached a climax of some
kind in late 1964 when the election results made it clear that Medicare
would probably pass. The association hastily constructed a proposal called
Eldercare and embarked upon a multi-million-dollar advertising program
to sell it to the Congress and the country as a substitute for Medicare.
The Eldercare ads, many of which appeared in Arizona, took two strange
In the words of one Eldercare ad in an Arizona newspaper: "Eldercare would offer better care than Medicare. . . Eldercare would provide for physicians' services -- Medicare would not. Eldercare would provide for surgical costs -- Medicare would not."
It seemed to me that the AMA proposal was both
inconsistent and illogical. In effect, the AMA officials were saying:
WOULD ELDERCARE REALLY DO MORE?
In a sense, Eldercare would do more than
the King-Anderson Medicare program. But here are some "ifs":
On the basis of official government reports on the Kerr-Mills program I estimate that Eldercare legislation in all 50 states would enable a maximum of 3 million people to qualify for benefits, about 1/2 million actually receiving care in any given year. The remaining 15 million older people would get nothing.
OTHER SHORTCOMINGS OF ELDERCARE
Eldercare had other shortcomings. Here are two:
NOT ALL DOCTORS WENT ALONG
While I am critical of the AMA, I don't want to leave the impression that all Arizona physicians concurred in the AMA position. On the contrary, I have had letters from a surprising number of leading physicians supporting Medicare and opposing the AMA program. Here is what one outstanding Arizona physician wrote me: "We have been watching with marked interest the progress the Medicare bill has been making in Congress, and contrary to the beliefs of many doctors in this area, I am firmly behind the principle of this bill." Wrote another: "...the recent reactionary practices are not part of the foundation and original structure of the AMA."
THE NEW LAW -- WHAT BENEFITS WILL IT PROVIDE?
Since it is likely that the House bill will soon
become law, perhaps with minor Senate changes, let's see what benefits
it will provide and how it will work:
Financing of the Basic Plan will be through an additional Social Security tax applying equally to employees, employers and self-employed persons. Initially the increase will amount to 35/100 of 1 per cent of a worker's wages, up to a new base of $5,600 (compared with present base of $4,800). By 1987 the Medicare tax will be 80/100 of 1 per cent; the earnings base will be $6,600 after 1971.
WHAT THE PUBLIC WANTS
In a democracy the public eventually gets what
it wants by way of legislation. I have received many letters demanding
to know why I favor Medicare "when the people of my state and the country
are opposed." The answer is that all the information I can obtain indicates
that a majority of my constituents and of the American people favor passage
of this legislation:
DEMOCRACY AT WORK
Thus I believe that in a very real sense the final decision was made, not by those of us in Congress, but by the people of this country who have in various ways made their wishes known. This is an example of the workings of a representative democracy. While there may be delays and protracted debate, in the long run legislation is based on popular support. I have read all your letters and studied each of these proposals, and it is my conviction that we are doing the right thing. Within a few years, in my judgment, many of those who bitterly and sincerely opposed this law will wonder why we waited until 1965 to meet this serious need.
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