2. The provisions that a State medical-care plan should specify, as a minimum, hospital care and the services of physicians and surgeons.

3. The omission of a provision limiting the receipt of medical care services to persons or families below a specified income level.

4. The omission of a provision specifying that transients are eligible to receive medical care services.

5. The combination of health insurance and public medical care.

DISCUSSION

State minimum coverage.-Those who do not accept the principle that a State medical-care plan should be in effect in all political subdivisions of the State believe that the State should be allowed to expend its available funds in those localities where facilities are most lacking, or where special medical needs exist, or if it seemed wiser, to concentrate all efforts upon improving the facilities in a few sections of the State as a demonstration of what could be provided on a State-wide basis with more adequate funds. Those favoring a State law in effect in all political subdivisions of the State believe that at least the minimum medical care services should be assured to all qualified persons. A mandatory provision would force the State to aid poor localities by means of equalizing grants, but would not compel the State to establish expensive facilities in sparsely settled areas where they were not needed. In general more adequate services would continue to be available in metropolitan centers than in rural areas, but the basic necessities would be available in all areas.

Minimum Specifications.-Those who are not in favor of State-wide coverage usually also oppose inclusion in the Federal bill of minimum medical services which the State would need to provide in order to receive Federal aid. They favor a bill which would leave with the Federal administrative agency the power to make individual arrangements with each State and which would allow for different minimum requirements in different States and in different parts of the same State. They visualize a plan which would be approved for a wealthy State under which quite complete care would be provided in metropolitan areas, less complete care in small cities, and very meager care, if any, in sparsely settled areas. They also visualize an approved plan for a less wealthy State which might be restricted to the provision of physicians' services in only part of the State. Those who favor approval of a State plan only if it is in effect in all subdivisions of the State, in general also favor the inclusion of minimum requireinents. Without some specifications as to types of medical care services which must be provided as a minimum, some States may elect to push the hospital program while making no provision for medical care in the home or they may provide for the latter and neglect the former. Neighboring States, each receiving an equal reimbursement from the Federal Government, might be providing quite different types of care and it might result in some of the unfortunate situations which differences in relief budgets in neighboring States brought about under the FERA. A Federal bill specifying hospital care and physicians' and surgeons' services as a minimum might do much to extend the availability of care throughout the Nation and to redistribute medical practitioners.

Limitation to Specified Income Classes. It is believed by some that a public medical-care program or a health-insurance plan should be limited to certain income groups, and that a Federal bill should include an individual or a family Income level above which the State might not receive reimbursement for the medical-care services provided. Such an income limit is not provided in this draft bill because it is believed that the decision on this point should be left to the several States, and that the Federal Government should reimburse the States (according to the formula) regardless of the income ceiling adopted in each State. This is one of the most controversial points in connection with a medicalcare program and difficulties are avoided by omitting it in the Federal bill and putting the responsibility upon the States. The Federal Government is protected against excessive demands for reimbursement by the States by the provision that total expenditures shall not be reimbursed when in any quarter they exceed $5 per person in the entire population at risk.

There is a danger that the minimum coverage (persons receiving public assist-ance and WPA earnings and the dependents of such persons) may tend to become the maximum, but even if this occurs during the first years of a State program: the principle will have been established that the self-supporting and recipients of public assistance shall receive the same type of medical-care services under the State plan.

Transients. The transients represent a group that is now denied public assistance by law and is denied the right to work on WPA jobs by common practic in the majority of States. The proposed draft does not include a provision for supplying this group with medical-care services because it is believed that (1) the transient problem might better be attacked as a whole and not piecemeal, (2) the task of selling health legislation should not be burdened by trying to sell other social legislation at the same time, and (3) inclusion of medical care for two or three hundred thousand transients might jeopardize a medical-care program affecting possibly 40,000,000 persons or more.

The combination of health insurance and public medical care.-The Technical Committee wished to give the States great latitude in the development of their State programs and to leave them free to elect the plan most adaptable to their requirements. It was believed that some States, particularly those primarily agricultural and rural, might find the method of payment through general taxation preferable; other States, more highly industrialized and urbanized, might find the insurance technique more generally applicable. The Federal reimbursement to the State is the same regardless of the plan adopted.

MEMORANDUM

OCTOBER 28, 1938.

To: I. S. Falk, Cliief, Division of Health Study

From: Marjorie Shearon

Subject: The draft bill for medical care and the covering memorandum

Now that the draft bill for provision of medical care has taken definite shape and a covering memorandum has been prepared to point out what the bill is intended to do, wherein it falls short of its purpose, and what are the principles underlying this type of legislation, it becomes necessary for me to go on record in protest against both the bill and the memorandum.

The bill represents an earnest effort on the part of Miss Klem and myself to draft Federal legislation combining recommendations III and IV. What has been produced is a hybrid draft which attempts to please everyone and will probably end by pleasing no one. Weakened by vain compromises, it emerges in such form as to be wide open to attack both by its friends-if it finds any-and by its enemies. I believe the bill should be dissected mercilessly now, before it goes any further, and should be consigned to oblivion unless, perchance, it is to be presented as a horrible example of the sort of legislation that should never see the light of day.

The technical committee implied two fundamental principles as basic for a general medical-care program, namely,

1. Eligibility for medical care should not be determined by a means test. 2. Medical care for public dependents should not be separated from that for self-supporting persons. (Reaffirmed by Mr. Altmeyer.)

I am convinced that it is impossible to draft a single Federal bill for general medical care that will combine recommendations III and IV and will at the same time rest firmly on these two principles.

There are several places where irreconcilable provisions are demanded. First, under recommendation III it is necessary to provide for public dependents and for self-dependent persons with low incomes-two groups of approximately the same size (20 million each). In defining persons who are qualified for medical care and we cannot sidestep definitions in order to escape dilemmas-we must specify the public dependents who are eligible and must also specify which self-supporting persons are to be eligible. How shall we specify them? If we say "all persons in families having incomes under $800 a year" or "all persons having incomes under $400 (or $500) a year," we immediately precipitate new questions and problems not the least of which is the question who, or what agency, is to determine the income of the individual or of the family?" Such income determination would almost of a certainty involve a social investigation and I think there is little doubt that this investigation would be made by the local welfare agency, that is, by a poor-relief official or some other welfare agent. This being the case, we have permitted, or have left the way open for, a means test to creep into the legislation and in so doing have contravened the first principle enunciated above.

It is to be noted that the draft bill as it now stands dodges this issue by failing to include in minimum coverage the 20 million self-supporting persons referred to in recommendation III. Such omission makes it possible to avoid the means

test. Unfortunately, it also makes it possible for a State plan to provide medical care for public dependents only. And can we doubt that most States would follow just that course? Is it anything more than wishful thinking to assume that selfsupporting persons in low-income groups will exert any pressure to secure for themselves such public medical care as may be provided to public dependents? Experience has shown that the poor who do not apply for public charity are not inclined to clamor for public services; indeed, they avoid with greatest care anything that bears the taint of public charity. Nay, more. There is slight hope that persons in this poorest self-dependent group will suddenly become vocal. They are too resigned to their fate to protest against unfair treatment. We who are engaged in drafting legislation and who see the weaknesses in what we are doing, have the duty, it seems to me, not only of pointing out the defects in our draft bills but also of championing the cause of those who are unlikely to show any solidarity in urging social legislation in their own behalf. If the bill is left as it is, the federally specified minimum coverage, applying to public dependents only, is almost certain to be the maximum coverage in the majority of States passing public medical-care legislation. And if by any chance a State should elect to provide such care for self-supporting persons with low incomes, there would surely be a means test to determine eligibility unless Federal legislation specifically excluded such a test from an acceptable State plan.

The real difficulty lies in the fact that public medical care, if it is really public, must be available to anyone seeking it. We do not furnish public education merely to children in families dependent on public support or in families having incomes below $800; we do not furnish public police protection or fire protection to relief and nonrelief families with incomes below $800. Yet we talk about "public medical care" that shall be given to at least a minimum group consisting of public dependents and we envisage a time when possibly self-dependent persons with incomes under $800 will enjoy such "public medical care" (presumably after signing a pauper's oath), and ultimately the time may come when the entire population will be able to have this care. The whole sequence does not make sense. Medical care supported wholly by general taxation is either "public," that is, free to all, or it is limited to certain needy groups in which case it must be regarded as "medical assistance" comparable to other forms of public assistance.

I believe it would be impossible to draft a Federal bill even for recommendation III alone without compromising on the means test. When, however, an attempt is made to combine recommendations III and IV in a single bill, the result is a hodge-podge of heterogeneous provisions that compromise not only on the means test but also on other fundamental social principles and make no contribution to legislation for a national health program. The hybrid bill is legally vulnerable, administratively impossible, and socially undesirable.

In the attempt to produce a bill within the framework of certain specifications there has been drafted what appears to me to be an indefensible document. Grants-in-aid are to be made to tates wishing to develop medical-care programs. The States may elect to develop insurance schemes or "public medical care" programs or combinations of both. In any event the Federal grant will be the same to any given State. This arrangement fails to take account of the fact that a real public medical-care program will call for a larger Federal subsidy than will an insurance scheme where the contribution by Government will be greatly reduced by reason of employer and employee premium payments.

Provision for coverage cannot logically have the same minimum under an insurance plan and under a public medical-care program. One can hardly conceive of a State setting up an insurance plan to provide medical care for relief and nonrelief persons with incomes under $800-the poorest third of the population. Consequently, any State desiring to provide medical care for the under-$800 group will provide what amounts to a medical assistance program presumably with a means test.

What this hybrid bill really attempts is a reconciliation of two irreconcilable concepts in a single document, namely, medical assistance for the needy, including relief and nonrelief low-income groups, and health insurance for employed persons with earnings above the subsistence level. Of course, this is not openly stated in the bill. But by failing to make positive provision that medical care under an approved plan shall not be limited to public dependents, by failing to exclude the means test as an administrative procedure, in other words, by a series of omissions, we have created a bill full of convenient loopholes for those who wish to circumvent social legislation.

Insofar as the covering memorandum is concerned, I am convinced that th true situation should be presented to Mr. Altmeyer and to Mr. Tate in plain straightforward statements not vitiated by softening and obscuring adverbs As a keen observer remarked in another connection, the nouns give and th adjectives take away. Speaking for myself alone, I must say that neither th bill nor the memorandum represents my best thinking on the subject. All the way through, the attempt was made to be on both sides of the fence at once an to avoid facing issues. I shall refer to only one or two sample items in th present memorandum.

Originally I wrote that a fundamental principle underlying Federal legisla tion for medical care was that "Provision of minimum medical-care services t all individuals who cannot meet the cost of such services is a duty of Govern ment." The meaning is completely changed if this statement is altered to reac that provision of such care is "a responsibility of society." I have elsewhere published at length a discussion of the break-down of society's efforts to provid for individual needs. Provisions made by the family and by friends, by ein ployers, private charity, and voluntary insurance schemes have all proved inade quate. It is because society has failed to make adequate provision for the sick the permanently disabled, the aged, and other persons unable to provide for their own needs that the aid of government has been invoked. It was because I wished to reaffirm this principle of the duty of government to take over the tasks that society cannot, or does not, assume that I stated the first principle in the memorandum as I did. To soft-pedal the issue by throwing the responsibility for anedical care back into the laps of those whose voluntary efforts have already proved inadequate is to deny a principle I thought had been accepted by the socially minded.

In viewing the present draft, the one thing that impresses me most strongly is the way in which we have capitulated to the pressures of minority groups with vested interests. It is my opinion that we should recognize and formulate certain principles as fundamental in the provision of medical care and that we should be prepared to fight for them. Should there not be a line of last defense beyond which we will not retreat and for which we are willing to fight? I know you have done plenty of fighting, but in this particular bill and memorandum as now presented there is no sign of fight, only ignominous capitulation. Nowhere in the memorandum is there to be found a clear and fearless statement concerning the real issues at stake. Dare we not voice them?

Is it too late to draft a genuine public medical-care bill? With 90 percent of the families in this country receiving less than $2,800 a year income, is it fantastic to suggest a Federal bill for public medical care supported from general taxation? If you believe that such a bill would have no backers, is it, then, too late to draft a national health insurance bill calling for compulsory insurance? This is the legislation demanded and favored by labor. It would avoid means tests and would enable Government to provide for relief and nonrelief persons living at or near the subsistence level by paying premiums on their behalf. National compulsory health insurance would furnish the only method— short of a nation-wide public medical-care program, which I think is sounderof guaranteeing against stratification of the population into groups which would inevitably receive varying kinds and qualities of medical care according to their economic status.

I cannot do less than make my own position clear by this declaration of faith in the things in which I believe.

MEMORANDUM

MARJORIE SHEARON.

NOVEMBER 2, 1938.

To: I. S. Falk, Chief, Health Studies Division.

From: Marjorie Shearon.

Subject: Comments on Draft Bill Covering Recommendations III and IV of the Technical Committee for Medical Care.

Although my protests have thus far been in vain, I shall make this final statement as the draft is about to leave this Division.

I repudiate the bill as asocial and the covering memorandum as inadequate. When Mr. Altmeyer, at Kansas City, laid down as a fundamental principle the undesirability of separating medical care for public dependents from that

for self-supporting persons, did he intend to drag 110,000,000 persons down to the relief level or, did he intend to raise 20,000,000 persons on relief to the level of self-supporting persons insofar as their receipt of medical care was concerned? Would the public conclude from Mr. Altmeyer's liberal statement that what he really contemplated, as a prerequisite for the receipt of tax-supported medical care, was an extension of means tests for virtually the entire self-supporting population? Has such a means test proposal ever been made anywhere before? Such legislation, if enacted, would call for invasion by a social worker, of the home of every person seeking so-called public medical care and would lead to such an inquisition of self-supporting persons as would be unthinkable in a relatively free democratic country like this.

We are not justified in calling the program we have outlined a public medical-care program; instead, we should call it by its true name-a medical-assistance program. The memorandum should point out far more clearly than it does the shortcomings of the bill and the places where tricky wording vitiates decent principles of social legislation.

I think it would be only fair to me to let Mr. Altmeyer and Mr. Tate know that I repudiate the bill and the memorandum. Whatever else I have accomplished since coming to the Board, I have built up a reputation for intellectual honesty and for social mindedness. This is the first time my name has ap peared on a document that was intellectually dishonest and socially undesirable. MARJORIE SHEARON.

MEMORANDUM

NOVEMBER 2, 1938.

To: I. S. Falk, Chief, Division of Health Studies.
From: Marjorie Shearon.

Subject: Compulsory National Health Insurance.

At our meeting yesterday you expressed surprise at my advocating compulsory national health insurance for medical care. I had in mind the Treadway bill introduced in the House of Representatives on March 14, 1938. That has always seemed to me a most desirable bill and I have wondered why it appears to have gone to sleep in the Committee on Interstate and Foreign Commerce.

This bill calls for health insurance "for every employee who is resident in the United States of America and whose rate of remuneration is not greater than $1,800 per annum." Dependents are included and the only exclusions are agricultural employees, employees exempted because of religious beliefs, and employees covered by industrial medical service plans. It is further provided that the income level may be raised to $3,000 if that seems desirable.

This is the sort of plan that not so long ago we were speaking of with admiration. It is almost a copy of the plan for British Columbia which was highly praised by Alan Peebles.

I cannot see that a few minor objections to a compulsory national health insurance bill should outweigh the great advantages of such legislation. We did not hesitate to force what was virtually national unemployment compensation simply because there were a few agricultural laborers who were temporarily excluded from coverage. I shall take up the agricultural bugaboo in another memorandum in which I shall discuss the various minor groups that might be excluded at the beginning from compulsory national health legislation.

It has been objected that Congress would oppose a bill calling for the establishment of any other Federal fund as a depository for contributions from employers and employees. In the case of medical care there is no possibility that a fund of any great size would accumulate because it would be drawn upon steadily for current expenditures.

What other valid objections are there to a compulsory national health insurance bill that would, more surely than any other legislation, bring about for the entire Nation the kind of medical care we say is desirable?

MARJORIE SHEARON.

MEMORANDUM

To: I. S. Falk, Chief, Division of Health Studies.
From: Marjorie Shearon.

NOVEMBER 7, 1938.

Subject: Medical Assistance for the Medically Needy Under the Poor Relief Laws. Recommendation III of the Technical Committee does not provide taxsupported medical care for persons who cannot now receive such care but