The Medical Care Pork Barrel

Congress has recognized the seriousness of the problem, and to meet it two different kinds of bills have been considered. One type extends the Old-Age and Survivors' Insurance coverage of the Social Security Act so that medical benefits can be paid automatically to the aged sick from insurance premiums collected during the working life of the insured. (Obviously, special provision would have to be made to meet the temporary problem of medical care assistance to those not under Social Security and those already retired who did not accumulate medical care benefits during their working lives because the law did not then include these benefits.) Such a law would also prevent illness from bankrupting our older citizens. The other type of bill extends the welfare provisions of the Social Security Act so that medical benefits can be paid from federal and state appropriations to the aged sick if they can prove that they are unable to pay.

The law which was passed by Congress last September (Social Security Amendments of 1960, Title VI) falls into this second category. It provides for payment of certain medical bills, on evidence of need, through individual state plans financed from federal and state appropriations calculated according to a matching formula. The need is determined by a means test. A social worker, or, more likely, a clerk trained as a social investigator, questions the applicant, checks on his assets, and makes recommendations to be approved by the responsible local welfare officer. Exact benefits to any individual will depend on his state of residence. There will be many different plans, since each of the fifty states must submit its own plan based on appropriate enabling legislation. So far only four states and Puerto Rico have submitted plans for federal approval.

Where state legislation has already been passed, the aged, in order to be eligible for financial aid, must have exhausted most of their assets and must have a financial status barely above the welfare level. There are, however, enough loopholes to permit the aged sick, if they have the necessary political influence, to protect their assets and still obtain financial aid for payment of their medical bills. As a result, our self-supporting old people may now find themselves at the mercy of the local political boss when they become sick.

Although the exact details of operation of the present law vary from state to state, certain generalizations can be made. The first and immediate result of the law is to assist the states in paying for those aged already on relief rolls. The state may either substitute federal funds for existing state expenditures or expand its medical care program for the aged sick on the welfare rolls, or it may do both. In neither case does this bring aid to patients who are not already on or eligible for relief.

Insofar as the self-supporting aged are concerned, the intent of the present law is "to furnish medical assistance on behalf of aged individuals...whose income and resources are INSUFFICIENT TO MEET THE COST OF NECESSARY MEDICAL SERVICES." But it is impossible to estimate the cost of the necessary medical services in advance in order to conserve assets, because the physician cannot predict the patient's future. Elderly patients whose heart attacks, cancer, and strokes bring them to the hospital during acute flare-ups can recover in a short time, suffer temporary or permanent disabilities of varying degrees of severity, develop one of many possible complications, or die any time in the course of the disease. In contrast, for welfare patients who have no assets to conserve the lack of predictability is unimportant, since medical costs can be estimated from time to time on a short-term basis and funds can be provided as needed.

Except for the restriction "no lien may be imposed against the property of any individual prior to his death on account of his medical assistance for the aged," the responsibility for determining financial eligibility is placed on the states. Each state may establish the definition of assets to be taken into consideration in the means test, the financial limit above which no assistance will be granted. The state also decides whether other kinds of assets will be excluded from consideration.

For example, in Massachusetts, before financial assistance can be given, all assets other than real property and life insurance have to be expended down to a sum of $2000 to $3000, depending on the sex of the patient and whether or not the spouse is alive. All children of the patient are liable for repayment in full of the financial assistance granted. It is assumed that in enforcing this latter provision, all children will have to submit to a means test.

This new federal law will degrade the self-supporting aged because it does not prevent financial bankruptcy. Instead, after remaining assets are expended almost down to the present welfare level, the applicant must submit himself to the usual series of welfare investigations and procedures. It will come as a shock to those who consider themselves to be self-reliant Americans to find that, through no fault of their own, as a result of illness, they will be treated by society as if they were on relief. Let us see how the law would work in a typical case.

Two weeks ago, Mrs. Caroline Jones, 68 years old, suddenly had a stroke. She was taken to the hospital unconscious, but has improved so that she is now almost completely alert. Her entire left side is paralyzed, although she is regaining control and strength in her fingers. The doctor thinks that if she has no immediate complications, she may leave the hospital in about one or two weeks, provided a bed becomes available in a good nursing home or someone can be found to care for her at home. The doctor has warned the family that the outcome is uncertain. She may make a complete recovery. But there are many possible complications, and even without them she may have any degree of permanent disability, including complete invalidism.

Mrs. Jones has been living in her own home and caring for her 72-year-old husband. He has been short of breath since a coronary attack five years ago. Until his retirement at 65, he was a skilled machinist and "made good money." He had always been a proud man, never wished to be dependent on others, and had accumulated considerable savings and a few thousand dollars' worth of government bonds, owned his own home outright, and had a life insurance program. Following his retirement, he supported himself with odd jobs, but he has been unable to work since his heart attack.

The cost of his long illness and his lack of income, except for Social Security payments of $125 per month, have left him with total assets of about $5000, plus the equity in his $12,000 home, on which he recently had to take a mortgage of $7500. His hospital and medical care insurance, which was a fringe benefit of his employment in a large electrical company, was canceled on his retirement.

The Joneses have two children. The daughter is married to a schoolteacher, George Allen. They live nearby in a small house, with five children--three in high school and two in a local college. The Joneses' son moved to the West Coast, where he works in an airplane factory. He sends his father a small check every month "to help out." Two of his three children have recently married and are beginning families of their own. The third, a daughter, had severe paralytic polio as a child and needs constant attention. He has been very frugal, because he wants to make sure that his daughter will always have the necessary medical care.

Mrs. Jones's son-in-law, George Allen, begins to worry. He has estimated that the hospital and medical bills to date are from $500 to $700. After Mrs. Jones leaves the hospital, her medical care will cost from $75 to $l25 per week for an indefinite period. The expense of this new illness added to Mr. Jones's care could quickly bankrupt the family. Mr. Allen has heard of the new law to provide funds for medical care for people over the age of 65. But when he calls up the local welfare department, he finds that no money can be provided before a means test is performed. This will involve an analysis of the financial status of the patient and her family, and will take time. The guess is that this case can be reached in three to four weeks.

Meantime, Mr. Allen is sent an instruction sheet outlining the conditions under which financial aid can be granted. Among other things, he finds that about half of the Joneses' remaining assets will have to be expended before aid can be requested and that all payments made for medical care may be recovered from his wife and her brother at a later date.

George Allen becomes frightened and wonders whether he can conserve some of the family's assets. He calls his lawyer, who arranges an appointment for him with the councilman from his district. The councilman is very friendly but makes no specific recommendations. He explains the law with particular emphasis on excluded categories of assets. The councilman then suggests, "When you are ready to make an application, send it along to me and I will see that you get a decision without delay."

Mrs. Jones's case is typical. The financial problems would have been the same if she had had a heart attack, cancer, or any other common serious disease of the aged. The delays and uncertainties in obtaining benefits under the present law may also interfere with medical care and may defeat attempts at preventive medicine. When disease needs early treatment and comes on gradually, another serious effect results. In order to avoid impending bankruptcy, patients may postpone calling the doctor in the hope that the disease will cure itself.

However this complicated law may affect the individual, several facts are clear: a large staff of interviewers will be necessary; the cost of administration will be high; and local political patronage will be widespread. Because of the many undefinable medical and economic variables, the regulations implementing the law cannot be specific. The responsible officials in state and local government will, therefore, have much latitude for determining eligibility in individual cases.

The situation is thus tailor-made for political favors when old people want to hang on to what little they have left and when the cost of a particular case cannot be predicted and administration becomes complex and prolonged. The local political boss will be in a key position if, while medical bills are piling up for one of his constituents, he can short-circuit the slow-moving, cumbersome machinery of multiple means tests by having the forms filled out and by arranging for a quick, foolproof decision.

Further leeway is permitted by the federal prohibition of liens on property and by state exclusion of other types of assets. Foresighted old people may have their lawyers arrange their estates not only to avoid taxes but also to maintain their eligibility for medical care funds. Assets may be transferred from such categories as stocks, government bonds, and saving accounts to pay off the mortgage on the home or to add to other excluded categories of assets.

Once illness has begun, legal advice will no longer be helpful, since no lawyer can ethically advise transfer of assets in order to defraud the government. So, if assets are to be transferred at the first sign of illness, local political influence may be helpful in protecting the patients against a too-searching means test. Also, children with assets likely to be attached will use whatever political influence they can muster to protect their own personal interests.

A most serious defect of the new law is the creation of an ethical climate similar to that of the Prohibition era. Self-respecting aged citizens facing bankruptcy due to illness will be open to any influence which might protect them from destitution. Otherwise upstanding citizens will not hesitate to defraud the government or to give their votes in return for political influence to help pay for their medical bills. This practice would not be new in our society. In the early part of this century it was not unusual for the needy to give their votes in exchange for the necessities of life. These practices fostered the power of the local political boss, particularly in urban areas.

The decline of the power of the political boss in the United States was hastened by the passage and implementation of the Social Security Act. Favors in the form of handouts to be exchanged for votes could no longer compete with benefits which the citizen had earned and received as a matter of right under law. This was Edwin O'Connor's conclusion in his analysis of the decline of the political boss in The Last Hurrah. This opinion was supported most dramatically by James Michael Curley, former Massachusetts political boss, in a television broadcast at the time of the publication of his book I'd Do It Again.

Local political bosses and ward heelers would welcome a pork barrel comparable to the one they controlled before the passage of the Social Security Act in 1935. The present law is exactly what they have been looking for. Large sums of money are involved. Congress has estimated that the additional cost of the present program in all of the states for those people not already on relief will amount to $325 million in state and federal funds each year, but it is already clear that the cost will be many times this sum and that no exact estimate can be made now. In exchange for votes, local political bosses may be able to help their constituents become eligible for medical care payments. In addition, they will control patronage through the many jobs required for the administration of the new law. This is particularly so where state law provides for appointment by local government and where merit systems are loosely enforced.

This new law will inevitably lead to indirect political control over the patient's ability to pay his physicians' fees. It is, therefore, surprising that the American Medical Association has publicly announced its support of the present law, in spite of its frequently expressed fear of political control of medical practice. Self-interest alone ought to make the association overcome its blind opposition and favor putting medical care benefits for the elderly into the insurance provisions of the Social Security Act, under which patients would have their claims paid as if from an insurance company. It is incredible that the American Medical Association fails to see that a law based on the insurance principle would be free from the political domination over individual physicians, which is a major feature of the present law.

Dissatisfaction with the present federal law has caused some states to postpone the enactment of enabling legislation. Others consider it an interim solution, in part because they wish to take immediate advantage of available additional federal funds for the aged sick already on relief. For example, Governor Nelson Rockefeller of New York, in his annual message to the legislature at the opening of the 1961 session, said, "To take advantage of federal funds made available by 1960 legislation, I propose adoption of a new $40 million program of additional medical assistance for the needy aged in New York state.....It is my conviction, as I have previously stated, that far more comprehensive federal legislation is required to help our senior citizens meet their medical needs. I believe that the only fiscally sound approach to the financing of such a federal program is through the proven contributory system of Social Security."

The new federal law was a major political issue during the presidential campaign. Vice President Richard Nixon indicated his satisfaction with the law as passed by the special session of the Congress. This was somewhat surprising, because the Eisenhower Administration has favored the concept that the individual, insofar as possible, be responsible for his own support. The present law actually encourages certain patients to become destitute or to refuse jobs if remaining assets or additional income would make them ineligible for major benefits. On the other hand, Senator John F. Kennedy was dissatisfied with the law and promised that, if elected, he would press for the enactment of a law based on the insurance principle of the Social Security Act. Indeed, such a law has been given early priority in his legislative proposals to the 87th Congress.

Congress has clearly recognized that voluntary health insurance cannot meet the need, and financial assistance by the government for payment of medical bills for some of the aged is now a reality. But the present law also does not meet the need, and furthermore fosters direct local political control over the aged sick. Passage of a law under the Social Security Act would protect the aged against bankruptcy due to illness. It would also, in one fell swoop, do away with political control, debasing means tests, and complex, expensive administration, and would be self-supporting. Let us hope that Congress acts promptly.