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Hospital and medical services in America are among the best in the world,
but the cost of a serious and extended illness can quickly wipe out a
family's lifetime savings. Increasing health costs are of deep concern to
all and a powerful force pushing up the cost of living. The burden of
catastrophic illness can be borne by very few in our society. We must
eliminate this fear from every family.
I propose catastrophic health insurance for everybody covered by Medicare.
To finance this added protection, fees for short-term care will go up
somewhat, but nobody after reaching age 65 will have to pay more than $500
a year for covered hospital or nursing home care, nor more than $250 for 1
year's doctor bills.
We cannot realistically afford federally dictated national health insurance
providing full coverage for all 215 million Americans. The experience of
other countries raises questions about the quality as well as the cost of
such plans. But I do envision the day when we may use the private health
insurance system to offer more middle-income families high quality health
services at prices they can afford and shield them also from their
catastrophic illnesses.
Using resources now available, I propose improving the Medicare and other
Federal health programs to help those who really need protection--older
people and the poor. To help States and local governments give better
health care to the poor, I propose that we combine 16 existing Federal
programs, including Medicaid, into a single $10 billion Federal grant.
Funds would be divided among States under a new formula which provides a
larger share of Federal money to those States that have a larger share of
low-income families.
I will take further steps to improve the quality of medical and hospital
care for those who have served in our Armed Forces.
Now let me speak about social security. Our Federal social security system
for people who have worked and contributed to it for all their lives is a
vital part of our economic system. Its value is no longer debatable. In my
budget for fiscal year 1977, I am recommending that the full cost-of-living
increases in the social security benefits be paid during the coming year.
But I am concerned about the integrity of our Social Security Trust Fund
that enables people--those retired and those still working who will
retire--to count on this source of retirement income. Younger workers watch
their deductions rise and wonder if they will be adequately protected in
the future. We must meet this challenge head on. Simple arithmetic warns
all of us that the Social Security Trust Fund is headed for trouble. Unless
we act soon to make sure the fund takes in as much as it pays out, there
will be no security for old or for young.
I must, therefore, recommend a three-tenths of 1 percent increase in both
employer and employee social security taxes effective January 1, 1977. This
will cost each covered employee less than 1 extra dollar a week and will
ensure the integrity of the trust fund.
As we rebuild our economy, we have a continuing responsibility to provide a
temporary cushion to the unemployed. At my request, the Congress enacted
two extensions and two expansions in unemployment insurance which helped
those who were jobless during 1975. These programs will continue in 1976.
In my fiscal year 1977 budget, I am also requesting funds to continue
proven job training and employment opportunity programs for millions of
other Americans.
Compassion and a sense of community--two of America's greatest strengths
throughout our history--tell us we must take care of our neighbors who
cannot take care of themselves. The host of Federal programs in this field
reflect our generosity as a people.
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State of the Union Address
January 15, 1975
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