Medical Care through Social Security: What Lies Ahead?
CHARLES M. SCHOTTLAND
One of the most significant changes in American life in the past 25 years bearing on the social security of its people is the expansion in need and demand for medical care. Developments in medicine, shifts in age group ratios in the population and greater understanding of health needs by the people have all contributed to a situation quite different from that of 1935. How to meet this developing problem is one of the vital questions of today and the future.
In 1960, the Silver Anniversary of the Social Security Act, the problems of health and medical care have become political "hit themes." Presidential candidates are taking public positions for and against the use of the Social Security mechanism as a means of financing medical care for the aged; the Forand Bill, H.R. 4700, is being debated extensively with the American Medical Association, insurance companies, and the Administration being opposed to the bill, while organized labor, officials of both public and private social agencies and others favor it. Popular interest is being evidenced by mass meetings in many parts of the country, by an unprecedented flood of Congressional mail and by numerous newspaper articles and editorials. In the meantime, the Administration has suggested a plan of grants-in-aid to states to enable them to provide medical care through private insurance carriers with a sliding scale of payments by the aged based on income--a plan which has drawn the opposition of many opponents and proponents of the Forand Bill alike.
Prophecies, particularly when concerned with action in the political arena, are frequently the sheerest guesswork. Nevertheless, the pressing need for a sensible approach to the problem of financing medical care impels me to predict that during the decade of the 1960's, measures will be enacted dealing with this problem. Since the mechanism of social security is such a logical and simple mechanism to use in meeting the need, I venture to predict that medical care, financed through the mechanism of social security, will be enacted in the next few years--at least, as it pertains to medical care for the aged.
The next few years will, I believe, be ones in which the current controversies around medical care financing will continue. Increased longevity, advances in medical science, new drugs, increased use of hospitals, nursing homes and other facilities--all these and many other factors have tended to highlight this problem. The problem is particularly acute for the public welfare agencies. Take public assistance, for example. This year approximately a half billion dollars will be spent for medical care by public assistance agencies.
There is a well-accepted comment in the United States to the effect that the very rich and the very poor get good medical care, and the middle class do not, since they cannot afford to buy the best and their assets make them ineligible for public assistance medical care. Like all generalizations, this one is true only in selected areas. By and large the poor have in the past received poor medical care and, prior to two or three years ago, in some states they received none outside of the large cities. During the past four years, the program has expanded and today about three-fourths of the states have some type of medical care program for public assistance recipients.
Just consider the extent of the problem. Old Age Assistance now has about 2 million cases. Probably more than half may be considered actual or potential medical care problems. Remember that the average age of these 2 million is 75 and that a majority are women. With the growth of OASI, the newcomer on the Old Age Assistance rolls will become eligible increasingly because of extra medical care needs.
Or consider the Aid to Dependent Children program. Twenty-two percent are on the rolls because of incapacity of the wage earner. Add to this the 330,000 on Aid to Partially and Totally Disabled and 109,000 on Aid to the Blind, and you have several million persons who require immediate medical care or are potential patients. These figures are in addition to those cases needing medical care in general assistance. Furthermore, it is expensive care. Old people may require long term care in hospitals and nursing homes. Today, about half of all of the patients in nursing homes in the United States are public assistance recipients.
From the standpoint of planning for the future, the lack of comprehensive medical care programs on a national scale means that our public assistance rolls are going to continue to receive "medical care cases" only--that is, they would not be eligible for public assistance but for the medical care program. I wonder how many people consider it sound public policy to make a person a public assistance recipient merely because he cannot afford medical care?
Let us analyze the figures a little further. In 1958, vendor medical care payments were one-forth of all expenditures for general assistance, one-twelfth of the expenditures for Old Age Assistance, one-seventh of the expenditures for APTD. We must remember also that these figures are exclusive of the many millions spent through county hospitals, free public clinics, well-baby clinics, and a variety of medical services. Without laboring the problem, medical care has become one of the most significant and expensive features of public assistance.
The problem is particularly acute in connection with the aged. A 1953-54 survey of nursing homes found that 90 percent of the patients in proprietary nursing homes were aged 65 or over. Two-thirds of the aged patients were women. Only one-half could walk alone and one-fifth were completely bedfast. Public assistance financed, in whole or in part, the cost of care of one-half of all patients in proprietary nursing homes. Stated another way: The proprietary nursing homes of the United States are almost exclusively geared to caring for old people and to a great extent to old people on public-assistance.
A recent (1957) study of medical costs of OASI beneficiaries sheds interesting light on the problem. Here is a group of oldsters with very little income outside of OASI and with 60 percent of them having incomes of less than $1,000 per year. Almost half of the married couples spent $200 or more per year out of their own funds for medical care, a sum entirely too great for persons with such limited income.
These are among the reasons that medical care for the aged through social security is such a hot issue nationally today in spite of the rapid growth of voluntary insurance covering older persons. In 1952, only 25 per cent of persons over 65 had any form of health insurance. Today about 48 percent have some type of voluntary health insurance.
Nevertheless there are tremendous gaps in coverage. As far as medical costs are concerned, the aged are a high-risk, high-cost group. Voluntary insurance must, of necessity, have exclusions and be geared to a level where private carriers can make a fair and reasonable profit. With such a high-risk group the problem of providing adequate medical services without unreasonable premiums is almost insurmountable.
To many persons the answer is quite clear. Medical care for the aged can best be approached through the social insurance route. Nine out of ten persons reaching 65 today are eligible for OASI benefits. They have paid for these benefits through a tax system which has been proved workable and financially sound. Our experience to date, plus the experience in other countries, indicates clearly the feasibility of a social insurance program of medical care for the aged. Because of the present interest in the problem, I venture to predict that either in 1960, or shortly thereafter, Congress will provide some type of medical care coverage for OASI beneficiaries and particularly for the aged. If this is done, a great step forward will have been taken in making available medical and hospital services to the aged in the United States.