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Census Bureau figures show that of the 15 million Americans aged 65 and over, 55% have cash incomes of less than $1,000, whereas 23% have $1,000 to $2,000, and 22% have $2,000 or more. The figures include social security payments but do not indicate how many oldsters are taking cash handouts from their children. HEW also finds that the over-65s use 2½ times as much hospital service as the U.S. average. Recognizing that old people indeed have a serious problem, the A.M.A. backs a law that Congress passed last year in the heat of the presidential campaign.
Under the Kerr-Mills program, the Federal Government matches state funds —a little more than 3 to 1—for hospital, nursing and some doctors' care for those oldsters willing to declare themselves "medically indigent"—that is, possessed of enough resources to live, but not enough for stiff medical bills. There is wide variation among the states' requirements: some set limits on cash reserves as low as $300, can require the liquidation of other assets such as cars, can require homeowners to mortgage their houses to the state, the title to change after the death of both spouses. Kerr-Mills critics find the means test demeaning, and the lien unjust, but A.M.A.'s Larson maintains that "there's nothing wrong with taking it after they're dead."
To get the system working, each state must pass enabling legislation and vote its share of the money. Eight have done so: Kentucky, Massachusetts, Michigan, Oklahoma. Washington, West Virginia, Maryland and New York, plus the Virgin Islands and Puerto Rico. Kerr-Mills back ers say the law will eventually cover 2,500,000 old persons, cost the Federal Government $200 million a year.
The King-Anderson bill, which is basically the same bill that Kennedy sponsored last year as a Senator, would cost $1.5 billion a year, to come from a ¼% increase in social security contributions by both employee and employer (currently, contributions are 3% of salary, up to $4,800, from each). Beginning Oct. 1, 1962, it would cover 14 million aged people drawing social security or railroad retirement benefits—and skip 2,000,000 not so covered. As the A.M.A. points out, King-Anderson would help some people who might not need help, and would not cover others whom Kerr-Mills helps. King-Anderson proponents reply, rather weakly, that they, too, rely on Kerr-Mills to plug some gaps. (About 2,500,000 are drawing old-age assistance and getting medical care "on the county." In addition, most states give some medical aid to non-indigent aged. Many of these are being switched to Kerr-Mills plans so the states can get the federal funds.)