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Respectfully submitted.

Secretary of Labor (Chairman)
Secretary of the Treasury
Attorney General
Secretary of Agriculture
Federal Emergency Relief Administrator

SUMMARY

1. A national program of economic security would be inadequate unless it made adequate provision against insecurity arising out of illness.

2. The risks which arise out of illness are:
(a) Loss of efficiency and health, and thus loss of the capacity to be employed
(b) Loss of earning when the wage-earner is disabled
(c) Costs of medical care for wage-earners and their families

3. The proposals involve four kinds of measures:
(a) Prevention of illness and promotion of health through public health procedures of proven merit
(b) Provision of certain medical facilities and services financed from tax funds
(c) Insurance against wage-loss due to sickness. This is Temporary-Disability Insurance
(d) Insurance against the costs of medical care. This is Health Insurance

4. Public health measures. The specific recommendations are already covered in Title VIII of the economic security bill now before the Congress providing for increased appropriations to Federal public health agencies and financial and technical assistance to States and localities.

5. Tax-supported medical facilities and services: The specific recommendations include:
(a) The medical needs of the population for which the Federal government accepts other responsibilities. This embraces Federal expenditures for a share of the cost of medical care for such persons and for their dependents, for a share of the cost of hospital care, and for temporary provision for the unemployables and their families. The total cost during the next twelve months would be about $60,000,000. (b) The development of small hospitals and medical center buildings in about 600 rural areas under a public works program. This would cost about $60,000,000 over a period of 4 to 6 years.
(c) Federal grants-in-aid for the maintenance of some of these new buildings in their first 3 years, and aid to States in furnishing physicians to certain rural areas now unsupplied.
(d) Development of mental and tuberculosis hospitals under a public works program

6. Temporary-Disability Insurance:
(a) Linked to unemployment compensation
(b) 1 per cent tax on payrolls with an offset up to 0.7 per cent for employers who make contributions to approved State systems
(c) 0.3 per cent to be held in a Federal pool to safeguard the solvency of State systems and for other measures to reduce the occurrence or severity of illness
(d) Benefits in State systems left to the States (but may be 50 per cent of wages for as much as 26 weeks, and maternity benefits without higher taxation)

7. Health Insurance:
(a) Federal subsidies to assist States which choose to establish State systems meeting Federal safeguards
(b) Federal safeguards including especially protection of the professions, the quality of medical services, the independence of the private practitioner in his role of an insurance practitioner, adequate remuneration to physician, dentist, hospital, nurse, etc.
c) Definition of population, scope of benefits, costs, etc. in the State systems to be left to the States
(d) Federal subsidy divided between "flat-rate" and "need" subsidies, so defined as to set upper limits and so that the total cost to the Federal government will not exceed $60,000,000 a year
(e) Subsidy may apply in respect to persons on relief and for whom the public accepts other responsibilities if these are given medical care through the facilities of the health insurance system, so that a single system of care will cover contributing and non-contributing groups, and the Federal government have a well-established channel to discharge its responsibilities toward the dependent classes.

FINAL REPORT OF THE COMMITTEE ON ECONOMIC SECURITY ON RISKS TO ECONOMIC SECURITY ARISING OUT OF ILL HEALTH

A. NATURE AND MAGNITUDE OF THE RISKS

No national program of economic security can be regarded in any sense as complete or effective without adequate provision for meeting the risks to security which arise out of ill health. Sickness, the loss of earnings because of the disability of the wage earner, the costs of medical care -- these are spectres which haunt the lives of the great majority of the American people. Economic insecurity from illness is not the consequence of a depression; it threatens people of small means even in good times. The problem is not created -- it is only exaggerated and made more severe -- in bad times.

Every careful study of the economic experience of wage-earning families has revealed the inadequacy of individual savings to afford full protection against the costs of ill health. This explains why tens of millions of families live in dread of sickness, why millions of families -- who are independent and self-sustaining in respect to the ordinary, routine needs of life -- sacrifice other essentials of decent living in order to pay for medical service, go without needed medical care, carry the burden of medical debts, rely upon the charity of doctors and hospitals, or receive their services from tax-supported and philanthropic agencies.