FINAL REPORT OF THE INSURANCE TASK FORCE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP59-00882R000100260002-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 112
• Document Creation Date: December 15, 2016
• Document Release Date: May 4, 1998
• Sequence Number: 2
• Publication Date: July 1, 1954
• Content Type: REPORT

OGC Has Reviewed
FINAL REPORT
of the
INSURANCE TASK FORCE
1 July 1954
ApproMillgerRimtA-RDP59-00882R000100260002-8
eti 70
cotatt
t ? A954
e al
tor for Perecnnel
Chairman, In wanes Task Force
etribution of Final Report
Ti
CIL es Board held on
complete copie of the Final Report
be platted on file in certain etra-
has been possible to assemble eight
Ilawd. These copies are to be
tive report of the Teak Force how
in these eight copies of the Final
in various thefts and to many
a period of time.,
lligence,
Meoutive
Co PY 4 - n*
00117 5 - Offias of u
Capr 6 Chief, insurpnce
th, Usk FOTOO
Onitr 7 * Chief? Career Service 5
the Ikek Fero.)
Caw 8 Chief, Management Staff
task home)
annel; Chief, Plans and
tan), General Counsel
Task Force)
Brnneh
%vnel
25X1A9A
25X1A9A
ombcr
member 0?5X1A9A
- n of 12?5X1A9A
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5X1A9A
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SECRET
e06/
20 JUL 1954
ME'10FLANDUM FORt Director of Central Intelligence
SUBJECT: Final Report of the Insurance Task Force
FROM: Chairman, Insurance Task Force
At the direction of the CIA Career Service Board there
is forwarded to you for your information copy No. 1 of the
Final Report of the Insurance Task Force. This report was
approved by the GIA Career Service Board at its final meeting
on 30 June. The, contracts with the underwriting companies
which pat this program into effect are now in final stage of
approval, and when completed will be signed by the Deputy Di-
rector (Administration). The two new plans, one for group Life
insurance and one for group Health insurance, will be announced
during the Career Service Conference on 3 August, and this insur-
ance program, greatly improved over that which has been offered
heretofore, will be available to 11 staff employees and staff
agents the next day, Wednesday, 4 August.
25X1A9A
Attachment - as stated
25X1A9A
(19 July 54)
A
Distribution:
Orig & 1 - Addressee,,--
1 - DD/A
1 - AD for Personnel
1 - Insurance Task Force File
1 - signer
Signed
5ECRET
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mr, SECRET Nor
.-caroaT
`.11E
CIA CAREER SERVICE BOAZ
Fitt12.1
al& INSURANCE TASK FORCE
IN R.ESPEC T TO
INDEMNI ITES AND BEDE FT IS
FOLLOWING
DEATH aro DISABILI if
,,4r
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/r
Approved For Release 2003/0326MA-RDP59-00882R0001002600(12-8
Nvir
ME IRMA= TASK ARM 1123IRSItIP
Chairman:
Herber and Sec Qy:
YOliter
MelZber:
Security Advism:
Security Advir301?:
Security Advisor:
Gonsultantv
Consultants
Consultants
25X1A9A
SA DD/P
PROS aDeputy Personnel
14`,SD Parsonalp.1
Gen., Courml
Office of. ;142t-7
Staff C
Chief" Plcus
(All Consultants cleared Ibp?Secret)
25X1A5A1
25X1A5A1
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Ire
Foratmed
10 Staterant of the problem.
2, Assumptions.
?7-1,4
sioNzons
PART I as to death.
Facta
a. Statistics . excerpted from TAB A
b, Existing available protective meaeurea 0 TAB B
Discussion
CODC111310113
56 Rscomnenaations
3.
PART
Facts
a, Statistics . .
b. Exising available
Discussion
Conclusions
o. UR:commendations
11 as to disability.
?olo???ro *0,0 excerpted from 'TAB C
protective meesu..ves, vi TAB D
. ab to death
Statistics . ? . . ?
D ti Available Protective Measures ?. ? . ? . n
T-3 0 Statittics ? . ? . .? ? . as to disability
D Existing Available Protective Measures . ? ? H
E Appendices.
S. VAEPA letter re broadened air.flight acceptance
WAEPA letter re broadened membership eligibility
III. iiimmpA 'Attar re broadenad employee coverage
IV.
V. Definition of "employee groups oy v.1.1 regllation
VI hazardous duty in OTR
TG Ha=ardous duty in /SS
Hazardous duty in operations, pr FE
17. Miscellaneous exoression or insurance iA,terests by-random
--oloction of DD/' officers.
Procsdure and sources in Obtaining CIA ,-,nd other death ani
A9ability figures.
PIszdum change if Gaaha matches GHI surgcel.
t,'13.11 text of Dr. George Baehrte Congressional testimony.
1,-;xcsrpt on health insurance from TODAY'S YOMAN, 1953 (Fawcett
Publications, Ince), written by Jack Har:?if3on Pollack.
25X1X7
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Noy
MIER=
iieCzAtisa of the complexity of this subjects it is deeried best to make
?he presentation in two parts e firsts as to deaths and then disability.
(nearly, ethat the Agency should dos if awnings in these fields/ is
peoperly considered only after review of existing available protective
alaciateao Accordingly, this presentation is so organized.
Warning is given that the statistics following in respect to death
ere eoneehat untrustworthy in the earlier years especially and, overalls
:tery be tco meagre to be 1?11.1y significant. They are:, however indicative
uarlfulo
egeecy procedures and systems in respect to records of death and
disability rhculd be tightened mad so organised that conti.nuingly in the
futeece, this type of Agemy vital statistics is immediately ready for Ley
,:leeiree3( ea:ea:foie by appropriate officers, Ibie in especially important
.r.1 the field of disability (hospitalization) because of the growing
eourebeyewiete: interests information and change in such group plans..
Further, interpretation and application of Pole* 110 in respect to
eieresas illnesses most always be carefully weighed together with the
eeeeloyeete memberehip in a ,gleoup hospitalization plan. Full justice to
the employee includes concern not only for costs to the Government but
glee (e)ncern for the degree of employee 'participations end his premium
eeete, in any group plan offered.
The Task Force finds grievous 'lack of knowledge in the erelloyee
group as to the indiviehialea beneficial rights s especially under that
importhet ate excellent piece of legislation known as the Federal
Eleeloyees. eareeesation Act, This is also trues but now less so, as
to the War Agencies Employees Protective Association life insurance.
It is suggested that if future dieseedenatiene of each nature are
dressed up inedestlya they are less likely to hit the waste basket with
edirg0 Tore importantly in this connections the Task Force
directs explicit criticism to the culpable failure of the Agency and
its Xi or adminietra.tive officers to assure that needful informae
tion reaches all persons concerned.
All of this material should .be made available to its Chiefs Medical
Offices for hisippropriate and proper technical contribution to personnel
;.ztdirdnietration.
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NOW
TO t CIA Carecr Service Board
FROM : Insurauce Task Force
Employee and Family Beneficial Coverage i51 1-tar:peat to Ilath
6ndDibility
FACBLEMs What employee and family indenaty and benefiaal Iws!irnno
coverage ahouIc;L the Agency arrmrge to have OtrOred i4 A-4rder to r3.1T
or alleviate ary petSible existing injustice, to alievigt
and family conr.erns which dilut.e or distract fraa attenton to
mission., to dornsirate community of iraereSt, and to promote tha
.aoncapt of cca,T3r,
7?.. ASSUMPTIONS: r:he Task Force believes1
That trom the point of view of construotiveyarsonnal atlInle-at
the Agency har3 a deep interest, if ndt Obligation, to
3nployees to ::1F3r,Jit lifegs more serious exigencies? mhetho7r 1:,:l
by mlion o&
tit there az, ()gist pnrticulfr securiiV nrebleas Or tha Ag3r1v.7 ,.!1 1
the field Of life and disability insurance.
That the natsre of CIA mission requires a quality ofpsersonal
NhIch is fou ned in a Itiellavanded ana 4owl,opod oarJler calxlept.
t/ a That the Agency? as ei:hers, desires to tfake advaqtage for its
maplepes of eldsting benefits commonly extanded only to gvoupS
as fach - or t'.) creatg.appropriate new ;waits..
o. lhat the Agency adoptl the principle that mar and 4kbove pI
availdbla bait eemployee is responsible for secug
frj-
V
self, with his own rir&ms, the needful life (and dibi3ity) pro's
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PART I
30 Facts In respect to death
a. Excoriated from 04)A are the en&preduct death,statitetios for staff
employees and staff agents for the years obtainable and valid com-
parison with,the Department of State. Bedauee age is obvious be a
factor, some information on this score is aleo shown. A non-valid
cemparisonesith Agriculture is added as a matter or general interest.
(Raldrees there are permitted to keep a reduced life policy.)
Except for Agriculture, the deaths are all in aeevice i.e.,
while employed,- and the ratios are based on average tenthly atrength
for the years shown.
Because the years 51, (52 and 053 are believed to provide the
most trustwerVNe source material, an average for this period is
added,
While theee statistics are legitimate in perhaps all of the
sevenlast-yearb,,there is no surety that every death shees in our
:
records and ineame event the mmegreness of the death =Aerator strong-
, Iy cautions as to attributing pomplete significance.
(1) Depth incidence all causes, all ages ',CIA, Department of State,
Department a Agriculture Beneficial Associatien, and U. S. Pepulatfiem
as, a whole
2 5X 1 Al /VIA( el 1947, .19413 ' 122. 1951 1952
c53
Total7d6a s
Deaths per 1000 .0
(physical given)
Total deethe e
Deaths per 1000 e
. (no physical)
A eiBaA.(el
Total athe -
Deaths per 1000 -
(no Physical)
yes. po lation
Deaths per 1150 . 9.88
' (a) (b) (6) See Appendix 2, Ta E for sources
(d) Contains 5 deaths from single aiemarash.
(e) U.S.Public Health Service
(f) If 5 deaths tra7.1. a single err crash ire s15idnsd the a-JOS-would be as.dhowp
8 C 8
.92 056 1006
.83
17(d)7; 19 4 12 16,
2.29 1.821.82 1.47 10750)
049)-61 A (L54)(f)
162 .234 - 190 217 232 ' 213_
11.3 144$ 11.8 V.5 13.2,
?
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PART I
(2) Deaths by office area for 1952 & 1953
(3)
Place of death, all 7 years (CIA)
72% in UcZ.
15% " Far East
13% " Euro and Near East
(4) Cause of deaths .all 7 years (CIA)
Traf ir 1 -72,70,--
Cause /No. Macy).
(5)
(a)
(b)
(c)
Cancer
Illneespoths
Accident in performance
of duty -
11
12
8
Suicide
6.
Accident not in line
of duty
5
Enemy action
2
Total
69
Performarkce of duty
10
16% 13.7%
17%
12%
.9A 101%.
Jo
3% -
15%
Ages at death all 7 years, in 3 selected Categories(CIA)
Hearts Gener4 progressive distvlbutiaLfzum age 36
Cancer! Tadao Ages
Suicide tYounger Ages
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f
6
?
211----- 1,
J in
hs
Iti
/1 / 7:4-1/4.. ----tniols
to
.4)
14)
;
1 ;
C.
COMPARATIVE AGE STATISTICS
AND STATE DEPARTMENT
/
-
'
4fiTi
/
CumAtiv,5 %o parsonnel by age groups (up to and
;rtck,thric 25 yrs.; up to and including 30 yrs.; etc.)
employees and staff agents as of 3tp QC? .053
. ,
Service? Ah personnel as of January 1954
,/1 ',341 p6(sonnel os of January l954
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THE FIRST FIVE KILLERS
U.S POPULATION
I5-24
25-44
ASE 6ROUPS
*A-ROM
45-64
SUREAU OF vir4L srArt..9rt
11.5 PEDEftAL grown- AG
DECE BER 1153
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P
ExistingaVailab 6 ilratedtive measures in henatiazary cdterai have t
foUo3ir4 aspects or Most importance:
Commercial Ordinary Life policies
The Basle 'Policy (Face Atount) eXcludes coverage if death
.is ocoas-Xoned by an Act of War (al"fa-ied or undeclared)
-.V113.0 thp ulatired 3 in either the military or the civilian
iserviceD_, by air flight in either military or non-etheduled
.planes for purpoSeS of training, testing, military mission
or tritale: acting as a we's member
(b) Double Indemnity_feature excludes (a) above, plus others.
-
(a)
Policy is not obtainable if the applicant is scheduled for
eelni-ha*rdods or hazardous duty, and, once granted, is voided
if the eplusionb eke offended.
. .
National Service raze Insurance (or U. S. Governaint Insurance)
Both these policies are limited to veterans and are incontestable e")
from date of ieste for any cause =apt fraud - i.e no risk
excluaidpe
(3) Federal 'Employees aompsnse.tiori Act
(a) This Act is an exclnsive compensatory retdy far death (and
disabilcty) resulting from injuries suffered in ?mance of
., - _ ... ..
gatr,... or: from diesaSes zantmately caused by erg,
,
1 .
(b) Itss ma-timum benefit woad equal the income on a Capital invest9
rent in :T.I. Sti H Bonds of about $210,000.
.,
(4)
(a) is iily a retire ment a0 tD annuity in nature but it
A bnothatical application in montbly benefits is:
i.
Widow 2 children
2 children only
Civil 6E*41141.08. tirergont Act
Tate ?primax
08.41 Employee
dies 170$g
GS .11 Employee
Atilt 1:tinkfirt
222.75
$g5 050
32846
399.00
239.16
285.00
does Ptddtito 1 ideath (and "disability) benefits trithcrat regard
to perftirMince ?f d7uty. The principal qualification is 5 yeses
eirgian 662+1..0: Then military service may be added.
,71
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AFL T I
CO A hypothetical application in monthly benefits is:
(e)
(7)
GS-11 E);(4)late?
pinor A sm. a ? w 2 .1 E. 2 Z:41.11
GSell Emplayee
Widow only-
$33,42
$55.69
at her age of 50
Widow & 2 children
66.84
111.39
immediately
2 children only
66.84
80,00
imnediately
Public Law 110
Maxim= death benefits are preparation and transportation of the
remains of the employee or meeber of his family who Tee die in
travel status or abroad to appropriate place of interment.
War Agenciee Emploeees Protective Association (WAEPA)
This is excellent term life and accidental death coverage totaling
now 1270000 available without medical examination or delay, for
a premium cost (up to age 41) of $100.00 per year.
There are no exclusions in the term feature and five (5) in the
accidental death category. Most importantly, in respect to air
flight, any flight is fully covered if the insured proceeds
?under orders, directly or indirectly, of the U. S. Government
as a peeeeneer?
The premiums seam out of line with experience.
TAB B shews an cosential summary application of all these instruments
under certain assumed conditiems.
DISCUSSION, as to death
As meted in thiestatistical compilatime? because of the factors of
neagrenees, same untrustworthiness and iecoepleteneve of statistics in
CIA, observations drawn here are sat forth ea indicative rather than
positions taken from lull statistical legitiMagee,
(1) The Foreign Service of State shows a better record than we do. This
might be expected due to the differenoe in activity and their early
retirenent plan.
(2) The Department (heodquartere of State) shoes about tho same record as
we do.
(3)
Unquestionably* present a far better ripk thee that with which the
insurance companies generally contend. Remover, the assertion that
because of our medical eeeminatione (preeemploymeet and owerseas
pree7DY and preeP0S) and security screening we present a far euperior
risk potentials Poems unwarranted.
(4) Whereqpnk
grclup;-1,16
di ?
? .4 44
:4:44
.141;
ii
gARET
Mr! '
Z41 4
i11.r1.13.
tion
(5)
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will shob increaSing maturity.
The potential c,;!'. risk oh 'the DD/P side shows up both in ti-a ratio for
1952 and 151 alci el.:30 in the fact of 8 DIVP deaths out of 10 (fc.c.
years) in the Firforzanos of duty category. rezese figures we wit:h.:Alt
refereneD to ez.,:-.1ths arising from illmss proxirls.toly caused by orrf.acs--
=mt. Six of te sevui suicieac are on Viz DD/13 side (on?-:., was in11:-3)
and in two calms of the totelp it is knan. that Agency activities waY.-is
pmssing fact,
(6) Tho incidence c.f.' death in performace of duty is signi.ficot at 35%.
HoweVer, the Tu3k Force believes that this rolatively lw ratio can
quickly ohoi rt-irp increase due to our widos-proad traTeling End
1SS and operattanal activities. The potential in respect to nal-
scheduled aircraft will be treated verbally as appropriate.
For the record:, the Task Force desires to point up the ever-ccesent
problem hi gt lighted by death - of potenaal nottvity attributton
to .4ze U. S. Covemk.?rat. /his is a ras.ttax of operational secariAsv
responsibility which lies in the 'technical 01? Crost.71..on.sa
The Dask?Forklo As not p.rofessional; bat holds and erapItszizos the
position that to deny a Staff AgentWAEPA coverage if be desirw-i it:
is no =pier. The fact of his rights unitv FEU tahich T:osuot be
denied contzils inherently the attritnation potential Per-
haps our only wAy cut is to refrain fres' using er9loyaeSonseneititro
rasions. l'oda.lr this may be an impracticable ideal - but ther:m is 'duo
problemi For those interostedp the pooltion and answer to this last
problem on thc, part of 1416 is detailed in TA!.3 E Appendizz
From an ana1v.13 of a:dating available protective features,?the
following observations are of moist irrip=tanZe
(1) As to corawreinl Ord_iLift. policies, unquestionably mny of the
hazard=Tibliall substantial rale:ere of our people are exposld (Ops,
ISS) viU icoid the individualls previouSly obtained policy and
1231?it intposrible for an applicant to obtain stich coverage. Tuis
true in respeat to the Face Amountp but most espccialk7 and MOVO
broadly true .c_f the double indemnity and disability features of thea:',
policies.
This fact is f5ubjpet, in part, to cover-story modification: av
dictated by. sootasitY.
The probability of difficulty in respect to voiding of Ordinary Life
policies is deemed smallp but one case is a misfortune. In the case
CIA, as to non.hazardous duty are routinely required and this is likely
of employee applications to Acacia and. N. Y. Itife,, assurances from
to .spread. In one case, denial of appliod.fdr insurance as gIen.
(7)
8 -
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3Eats T
PART I
(2) As to National Service or U, S. Government Life Insurance.
M"""?eisl-necieverage in moderate face amount?forreteran
who kept it, This insurance is really cheap with no hazard ex-
clusions, in either death or disability features.
(3) As to FECA. This is excellent coverage for the individual (in dis.
abilitirind for the family in death, arising from injuries suffer
Gd in performance of duty or from diseases proximately caused by
employment. All hazardous or semi-hazardous duty is covered.
A problem may lie in sefficiency of coverage for sone standards
of living (the maximum is 3525000 per ?Month regardless or size
of family). However, it would take an investment of $210?000.00
in U. S. g Bonds to -provide such interest income.
A second problem is security, i.e., attribution to the U. S.
Governnent in sensitive situations e but the indemnity rights
here caplet be denied. This is, however, a procedural matter in
the field of eePurit7 not substantive in respect to dollars.
(4) As to Civil Service Retirement Act. This is a retirement /lets,
but it does pre quite benefits on too limited a
basis, for death arising in line-ofeduty or not inelineeofeduree
where FECA doesnet cover.
The problem here . of insufficiency . must be taken together with
other available protective features which the individual may have.
(5) ?4L. 110 This Act provides 4 very stall assist in burial only.
(6) MEM. This is valuable moderate face amount coverage for none
-017ental death e excellent coverage for accidental death. The
police is valuable because of (a) absence of exclusions in the
term feature and but small limitation in the accidental death
clause; (b) ease of procurement e no physical examination and
immediate availability.
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PART I
The problems hero are (a) its probably somewhat toe high cost .
as thown from our experience; (b) the security (attribution)
-eespects.in event of death in a sensitive situation; (0) insure
ficiency of coverage in certain standards of living.
CONCLUSIGNS, in respect to death.
ae There is need to seek replacement provision for potential voiding of
an individual dinaxy life policy and to counteredenial of such -7
coverage from the commercial market, -
There is no need to seek supplemental benefidial coverage in the
field of performenceeofeduty. .
(1) The MCA is excellent coverage; when supplemented by the optional
coverage of WAEPA? and probable ordinary life (and for a veterans
.MLI) all reasonable A pcy obligation arid concern isfeatisfied.
c. It is desireble to seek, as have others, additional, better, or '
Cheaper life coverage outside the ruld or performance . of e duty.
Our people are young with existing and/ca' potential family respone
sibilities
(1.) The ppoup factor here provides the potential or about 704 saving
in premium cost against comnercial Ordinary Life.
d. There is need to subject our =FA. experience to actuarial scrutiny.
The liberal clauses in META make it an extrerely desirable offer,
ing and one riot to be jeopardized.
There is need to facilitate the individual' procurement of single
trip coverage on scheduled airlines, with arranmomeet for such offer*
ing through-out prooessing. (This facility has been agreed to by
Oman as a convenience for us e if we desire to so place it.)
g. There is need to arrange (probably as Above) for trip coverage on
nbeeseheduled and military aircraft. (It is possible to de this
securely by special arrangement.)
h. Tie 14=0.114,110 remedy" aspect of FGA precludes the expenditure of
appropriated dollars for the ireitviduerc benefit, in either premium
cost dr other substantive benefit in. the life field. (excepting, the
seen benefit in Pr4 no).
e 10 e
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However, because of the nature of Agency mission its high demand
for dweption? its general and overriaing security demands, the Ageney
must 7 prepared to spend appropriate needful adsthaistrative dollars
to backbtop all prpper beneficial coverage measures?
MAEPA shall not be denied a staff employee or staff agent at any time?
Ihe attribution factor contained in FECA is overriding* Choice must
be confined to the =20; for the missiono
j? At the present time, the Teak Force is not looking to legislation
for resolution of our insuranceIprablento
k0 As fulV illustrated from leek of xnewledge among our employees of FECA 9?
almost entirely, and oftTAEPA r less\Ro now, ve must consider new ways
and means to get information over to our employeeeo This is vitally
important first in respect to missicn, then in justice to the employee
and last in respect to the importance of long-time solid career develop.
nentprOgremo
lo Ment abpsets of the foregoing ask for technical insuranee consultation
with actuarial study, to conclude in respect to appropriate existing
supplemental measures or self-insuraneeo
ir 11
Approved For Release 200344121A-RDP59-00882R000100260002-8
App
d For Release 2003/03/25 : CIA-RDP59-00882R0001002604-8
MEM
illit10101121DATICSS, as to death
After conaultation with thel aul based upon 'their
views as to how beat proa?our insurance problem in respect to
death, the Task Force recommends the follovin plans -
a. Offer to an Agency' Staff employees and Staff Agents, the opporp
felinity to secure group term life coverage with convene=
privilege and premina waiver for disability along the following
linear
5X1A5A1
2 X1A5A2
25 1A5A2
Fat
25X1A5A1
_ ,?. ? ..
(1) For salaries under $3,200 annially,-an optional coverage.,
range with a minimum to equal the nearest $1,000 of salary
end a muisava of $6,000,
(2) For salaries aver $3,200 annually, an optional coverage
* range with a minimum to equal the nearest $1,000 of salary
and a =durum of $15,000.
tto, Add $0,000 accidental death coverage to the foregoing in each
Palter*
of Provide in the plan for the sane =elusion leeway as presently
de
00
ft,
* At* .dto a yr, :ii a
a
* * .;
t a a : *
25X1A5A1
25X1A5A1 (and of WAWA, if any) to the
for assessment against self.insurance on the same
timpremiumec ) of self.insorance, but also outline risks to us in so
would then not only point up the cost advantage
undertaking.
Approved For Release 2003/0 IA-RDP59-00882R000100260002-8
Apptiord For Release 2003/03/2?MUIRDP59-0088206%10b726 -8
Bteabilit
30 PACTS as to disability.
a. Statistics.
Ideally an Agency review of what has happened to our people in
injury and illness should contemplate incidence in performance of
duty, in line of duty, and outside duty - inclusive of family
involvements. Such all inclusive information is not available
because:
0., The Chief, Medical Staff maintains no statistics,
The records under FCA are case files, lately in Personnel
and formerly in 000, (Personnel is about to set up an effective
ledger). At any event, these are only performance of duty
accidents or illnesses.
.0 The re-imbursement .program under PL 110, approved in Yay 1953,
still waits a. regulation to disseminate the information and to
govern it, hence it is estimated that there are hundreds of
cases which have not come to our attention unless under an
Agency hospitalization or sureical plan.
Therefore excerpted from TAB C are the most important available
STATISTICS under the two hospitalization end surgical plans offered
to our employees (Mutual Benefit Health and Pceident Association of
Omaha, Neb., and Group Hospitalizetion, Inc., - hereinafter desig-
nated as OMAHA and GRI respectively). OHI will not give Us more
I nformation than shown, - from our own records.
OMAHA
(1) Summary of Omaha Hospitalization and Surgical claims since
inception in August 1918, thru 1953.
(a) Total no. of Claims 1129 (679 incurred in U.S., 450
overseas); total days in hospital, 6665; ratio of claims
to total no0 of policy holders is 1.0 to 4.6 during 1953.
Actual cost paid %
(b) All Claims Benefitli by emploYee Benefit
Total 8115,405 $172,878 67.
Hosp. Em & Bl.. 49,74h 55,580 890
Surge 29,0h4 70,683 h1.
36,617 h6,615 78.
Extrae
25X1A5A1 (c) Total Benefit and total actual cost to employee by
Geographic location:
Approved For Rcicare 2003/03/25 : CIA-RDP59-00882R000100260002-8
1/ All figured ati increased rate as of 1 September 1953.
?
App
d For Release 2003/03/4M-RDP59-00882R00010026W-8
In U. S.
Overseas
anda
$ 77,361!
38,041
Actual cost paidby ployee.
$129,912- '
42,966
enefit
6o%?
66%
(d) The total actual costs paid by the employee in respect
to type of service:
453-421111'
h1.0
26.8
(e)
Hosp. Rm & Bd.
Surgical
Extras
Total
0 55;580
70,683
146,615
$172,878
Omaha Surgical Benefita and Actual Cost
Based on Claims Submitted Through 1953)
tai.114
Ratio of Benefits
.12.444a cost
Surgical Benefits Total
Operations in U. S.It
Operations Outside ho S.
Actual Surgical Costs -- Total
Operations in U. S
Operations Outside U. So
291:
121.4
394
h6.9
7106
$7061;
55533
15150
Of the above, Omaha Surgical Benefits and
Actual Cost 4"or Pregnancy Complications.
Surgical Benefits --
Maternity in U. S.
Maternity Outside U. So
Ratio of Benefits
As.121.La
Total Data
9/135
3530
Actual Surgical Costa -- Total taw
Maternity in U. So 27774
Maternity Outside U. So 65.5
21.4M
.0
5t.2
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App
d For Release 2003/03/25.;c.ltRDP59-00882R000100260(4-8
(f) Total benefi4 and total actual cost experience by type
of illness:(
Benefit
Pregnancy and $40,222
Complications
therefrom
Gastro - $20,783
intestinal
160 cases of $13,125
rim, amen
illnestes
gos, ear, nose $ 9,511
and throat
Genito-urinary $ 8,66h
Total of 1argest$92,305
5 categories
Total of remain-123,100 $ 30,245 71%
ing 8 cate-
gories
(g) Days hospitalized:
Less than 5 days 47%
Less than 10 days 05%
Less than 15 days 95%
(h) Type of claim:
By policy holder only 43%
By spouse only 43A
By daughters and sons only 111%
Actual cost paid
by employee
%
Benefit
$ 72,710
55%
$ 26,140
79%
$ 15,754
04%
$ 14,953
63%
$ 13,076
66%
$142,633
65%
2/ 13 categories of illness groupings were specified by our consulting
actuaries* The first five largest categories are those shown?
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SITRET
Appud For Release 2003/03/25 : CIA-RDP59-00882R0001002604-8
SITRET
(i) BUrgi cal Claims only: DAstribution Range of Actual
Coat to Poll ey Holder
(Based on 683 incidences)
Number Per Cent
"Mr 'TU676-
Cumulative
Patio
Leee than $25
91
13.3
13.3
$25 thru $1I9
101
168
28.1
050 thru $74
99
165
h2.6
$75 thru, $99
72
10.5
53.1
$100 thru $1211
81
11.9
65,p
$125 thru $1L9
33
h .8
69.8
$150 thru $171
82
12.0
81.8
$175 thru p199
29
ho2
86.1
$200 thru $224
h5
6.6
92.7'
$225 thru $2h9
6
0,9
93.6
$250 thru $274
20
2.9
96.5
$275 thru $299
5
0.8
97.2
$390 and Over
192,
2.8
10090
si $300 - 4
"335 1
349 . 1
350 ? 5
375 1
1100 . 3
500 . 2
550 - 1
650 -1 11 -
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8160M
Appwd For Release 2003/03/25v,relft-RDP59-00882R00010026041-8
(j) "Extras Claims only: D1stribution Range of Actual
Cost to Policy Holder.
Extras Incidonce
(Based on 871 Claims)
Cumulative
21:21121 Number Per Cent Ratio
13717- 7=76''
$25 and less
283
32.5
32.5
$26 thru $50
220
25.3
57.8
P51 thru t75
162
18.6
76.11
$76 thru $100
96
11.0
87.1
$101 thru $125
55
6.3
93.7
$126..thru $150
21
2.4
96.1
$151 and over
34t,
309
10000
If $151 thru $175
13
$176 thru $200
5
$201 thru $225
5
$226 thru t25Q
2
1251 thru $275
3
$276 thru $300
2
$301 thru $325
2
$326 thru $350
1
$668
1
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Appvird For Release 2003/03/25: CIA-RDP59-00882R0001002604-8
(k) Comparison of Claims paid and Preniums paid:
(On 1 Sept 53, when approached by the Agency, Omaha
raised its benefits as follows:
golIN $9000 per day from f`,60000
EXtras 9135.00 unallocated, from 00.00 allocated
in only h fixed categories.
Extras in maternity only, to $45.00 from 000000
All previous claims back thru 1948 are figured on
basis of the new (1 Sept 53) rates in order to
evaluate properly the existing Omaha plan. Figures
are therefore calculated not actual.)
Tear
Claims
Premiums
% of Premiums
Returned
1948-50
$18,541067
$40,34h059
46%
.51
18,947.29
33,716.60
56%
.52
24,506061
51,197035
48%
..53
27,903.27,
119,787.60
56%
Total
$89,898084
,
$175,046.14
51%
OBI
(2) Summary of CHI hospitalization and surgical claims accepted
from CHI at incqption (in March 1953) for previous claims -
and thru 195301/ OHI pays directly to the hospital and
withholds dollar costs not shown.
(a) Total no. of claims,.1865, total days in hospital 8651
(8350 days allowed)6( ratio of claims to total no. of
policy holders 100 to 406 during 1953. (sane as Omaha)
When CIA took on GUI, that association turned over to us all previous
records of our employees - whether inside or outside the Agency at the
time of claim. Claims accounted here therefore include those. before
March 19530
1,/ The difference accounted for by: Overstaying on discharge hour, over-
staying on child tonsilectomy (one day allowed) adult (2 days allowed)
or maternity (8 days allowed)*
-.6.
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Appkof For Release 2003/03/26aMeRDP59-00882R0001002604-8
Actual cost paid %
(b) All Claims Benefit by employee Benefit
Total ? .--" ....- --.
Rosp. 7,999 days 351. days over 96%
Surg. 1i9, 779 not known --.
. Ektras t15,665 not known ....
( 0 )
Total benefit and total actual cost to employee by
geographic location:
Unobtainable.
(d) Total actual costs paid by the employee in respect to
type of service:
Unobtainable.
(e)
t
Total benefit and total actual cost experienced by
type of illness. (Information limited to 112121119. tELE
only.)
Benefit
Entu.
Actual
put_
%
Benefit
Pregnancy and compli-
cations therefrom
2,920
3,015
94%
Other (meny small misc.
claims)
997
1,042
96%
Oastre-
intestinal
910
982
93%
Accidents
769
779
99%
Genito-urinary
.676'
697
96%
Days hospitalized:
Less than 5 days
58%
Lass than 10 dap,
91%
Less than 15.days
96%
. 7 ?
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SECRET
Appud For Release 2003/13/25_; CIA-RDP59-00882R00010026V-8
(g)
Type of claim:
By policy holder only
27%
By spouse only
43%
By daughters and sons only
30%
Surgical claims only: Distribution Range of Actual
Cost to policy holder:
Unobtainable.
Extras claims only: Distribution Range of Actual
Cost to policy holder:
Unobtainable.
UHT choice of coverage by the individual as of 31 March
1954 shows the following:
GHI Hospitalization only
Nos.
Single 182
HUsband and wife 139
Family 2.-31
Total 622
GI Hospitalization and Surgical
Single - 1440
Husband and wife - 619
Family
Total 3373
Grand Total 3995
SECRET
- 8 -
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Approved For Release 2003/03/25 : CIA-RDP59-00882R000100260002-8
=BET
Financial status of GRI as sham in their last two annual reports to the D.C. Insurance Dept.
(OHI operates under an Act of Congress is not supervised by the District Insurance Dept. or
District Commissioners, butinakee one annual. report to these offices at "any time" during the year
following annual audit.)
The Wyatt Co. was asked to try to get the last report and got a "runaround" from GRI. Socaml--
ing4, representatives of the Task Force visited the District offices, viewed the audited statements
for '52 and '53 made by
25X1A5A1
(a) Audited* Balance Sheet and Operh_ltmlatItmEnzfladatedL2?AEF12.51JEIMiltlittft_li _
For Year 1952 For Year 1953
Balance Sheet:
Total Assets
Total Liabilities
Employee Pension Reserve
Unallocated Reserve and
Surplus
Excess of Income over
Expenses
$4,734,841.28
Operating Statement
Total Income
Total Expenses
Excess of Income**
% Excess to Total Income
25X1A5A1
$60603,207.74
$2,791,720.61
8,490.00
1,009,912.36
(as of 1 Jan. '52)
924,718.31
(as of 31 Dec. '52)
$4,734,811.1.00
$7,8390987.42
6,915,269.11
924,718.31
11.e$
Approved For Release
Mims
$2,840,415.15
7,940.00
1,934,630.67
(as of 1.1alei. 53)
1,8801560.14
(as of 31 Dec. '53)
60,338.00 DepreciatOn
$6,603,207.00 7:
004830876.07
6,603,315.93
108801560.14
22.2%
** Transferred to Unallocated Reserve
200NER CIA-RDP59-00882R000100260002-8
Y -
For Release 2003/03/VIIA-RDF'59-00882R00091M
Existing available protective measures as to disability - excerpted from
TAB D
(1) Against permanent and total disability there are these four measures:
(a) Individual's awn commercial Ordinary Life policy in which
'disebIlity_coverage may be secured for small additional
oz' i straight commercial disability policy,'
-
1? Commonly these disatdlity features cost in the neighbor-
boed of $109900 ennuellY for a benefit of1400400.33,r _
months have "white collar" risk restrictions exclusion
for mdlitary service in time of war and air,fli ht in ,
nbm.ischeduled service?
) National Service Life Insurance to whichji veterAniney add some
. .
'disability coverage for an additional premium? (Example: it$0.010
per month benefit for a yearly prenium of' ]i10on a $10,000
-life 1,6114)*
(c) Federal Employees Compensation Act
MS Act provides compensation for disability (and full
medica care) resulting,from injuries suffered in,ppr-
romance of duty or from diseases proilmately caused by
employment for as lonsasthedisability continues?
Tbe.taldi'mum.montay benefit provides two-thirdn ok the
dOpIoyee's salary up to and including OS-13, 58% of a
0S-11), and 53% for a GS450
(d) The Civil Service Retirement Act
o Mita Act provides disability benefitieor life Without
regard to performance of duty, provided the employee has
kminimum of 5 years civilian service and le tolallx
disabled?
The benefit e are based on salary and length Of Service? A
0.9 with 8 years service (including military) would receive
e$0000 per month? A 05-13 with 11* years service would re-
ceive $1116?00 per month?
(2) Against temporary disability, there are these four measures*
(a) Federal Employees Compensation Act
(see 1?(1)(c) above)
For Release 2003/03/25 :38P7RDP59-00882R000100260002-8
SECTIZte
Apprwl For Release 2003/03/25F(NMDP59-00882R000100260002-8
(b) Public Law 110
10 This Act provides benefits to employees (only) assigned
to permanent duty stations outside the Continental U0 So,
its territories, and possessions for illness or injury
requiring hospitalization and which occur in line of duty?
20 The benefits are payment of travel expenses to and from
an appropriate hospital or clinic and payment of cost of
treatment?
A group hospitalization and slIreical benefit plan administered
under Govern-lent Employees Health Association (CIA), underwritten
by Mutual Benefit Health and Accident Association of Omaha,
Nebraska?
( )
(d) 4 group hospitalization and surgical benefit plan administered
Under Government Fmployees Health Association (CIA), undel%.
written by Group Hospitalization, Ince
(e) These general observations are pertinent here in respect to
these two. plans?
1.
20 Both plans confine eligibility to Staff Empleyees and Staff
Agents? .
20 Omaha is superior on the whole as it stands, for the over
seas employee who has his dependents with him.
h. OHI is superior on the whole for the employee resident in
the U. S. but, because of the nature of the GNI hosnitalic.
sation plan, a dollar value is impossible to obtain, in
the domestic cases.
10, Omaha is cheaper than OHI even if the surgical benefits
were Matched. (per Omaha's firm offer to match ? see
P? e 16)
6. Neither plan pays of if FEZA doeso
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25X1
Appr v
IQ
For Release 2003/0Riet1A-RDP59-00882R0001002600,0-40/8
Neither plan meets the criterion set by Or. George Baehr,
Medical )i.rector of the Health and Insurance Plan of
Greater New York ? HIP. (See TAB E, Appendix XI for his
Congressional testimony and Appendix XI; for Aescription
Of HIP.). i.e. benefits are almost. entirely confined to
hospital and surgical costs. Dr. Baehr holds that 90%
of the costs of illnesses arise outside a hospital 7 in
the doctor's office and in the home. This view suegests
remedying our unsatisfactory situation as to a hosptalic.
zation and surgical plan as such and then dealing- with
outside hospital costs separately.
Neither plan offers catastrophe insurance which, , written
on a "deductible" basis (the same principle as. in auto.,
mobile collision insurance), is a relative/7 cheap addition.
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14131.11
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SECRET
fe)
Detailed camparisoo of Omaha and OBI
1.
OVERSEAS
Hospitalization
1. Hosp. Board& Roam: $9 per day. for 31 days
with no limit on frequency, plus
$135 for hospital extras.
2. Plus surgical as shown below.
3. Plus out-patient emergency up to
within 24 hours of accident
4. Effective date. let of the next meth.
5. Waiting period. Maternity only. 9 mouths
but coverage extends 9 months beyond
termination of contract.
6. Maternity. $9 per day for 14 days
plus up to $45 total for &sp. extras.
7. TB., mental and nervous disorders and
quarantinable diseases - same as No. 1.
above.
$ 135
SECRET
OVERSEAS
CIII Hospitalization
I. Hosp. Board&Rocau $10 per day for
21 days with 90 day interval on
frequency, plus
$64 for hospital extras.
2. Plus surgical as shown below.
3. Plus out-patient emergency up to... $ 10
within 2 hours of accident
4. Effective date. 1st of the next month.
5. Waiting period. None if participation is
75, of OEHA and no extension beyond terming,-
tion of contract for pregnancy.
6. Maternity. $9 per day for 8 days
except Caesarean, termination of ectopic
pregnancy and miscarriage, for which
hospitalization benefits are 1. above
7. TB., mental and nervous disorders and
quarantinsble diseases 7 10 day limit in
any 12 month period for No. 1. above.
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Approved For Release 2003/03/25 : CIA-RDP59-00882R000100260002-8
BMW
2.
COMA
WASHilleNtH
Hospitalization
1.
Hosp. Board & Roan: $9 per day
for 31 days with no limit an frequency
1.
Plus $135 Malt for hospital extras
2.
Plus surgical as shown below
P11?41?011.
2.
3.
Plus out-patient emergenoy up to
within 24 hours of accident
$135
3.
4. Examples (Hospitalization only):
M. & Roan
Jamel
$ 90
zro
appendectomy
comp. fracture
126
Plus a IllaXiMUM of $135
bilat. hernia
90
to cover all hospital
unilat. hernia
126
extras
hysterectomy
90
hemorrhoidectomy
27
tonsiLlectany
WASHIN01011
Hospitalization
Hosp. Complete Service for 21 days (sesd-private.
part4o. hospital) with 90 day interval on
frequency $10 per day if in private roan.
Plus $5 per day for additional 180 days
Plus surgical as shown below
Plus out-patient emergency up to
within 2 hours of accid,ent
4. Examples (Hospitalization only):
Bd. & Roma (diff.)
10 -days
$ 135
30 "
405
14
189
10
135
ft
14
189
10
135
ft
3
4o
Net
113. -
1
/14.5
/135
/63
/44.5'
/63
/14.5
/ 13
$10
Plus the hospital extras,
(3.6 listed) which range
from $50 for the simplest,
uncomplicated appendectomy
to very substantial
amounts for the serious
or complicated case.
50$ greater on Board & Roan then MARA.
Basic costs of Board & Room 0 $13.50 per day
(typical presently) is absorbed by MI completely.
5.
Same as overseas
5.
Same as overseas
6.
Same BES overseas
6.
Same as overseas
7.
Same as overseas
7.
Same as overseas
SET
- 14 -
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Approved For Release 2003/03/25 : CIA-RDP59-00882R000100260002-8
SMUT
This is 60 of CHI
Overseas and Domestic
(ftample)
$ 50...Hernia log. util $ 100
75...Hernia log. bilat 140
100....Appendectomy 100
100.. .Radical NestectoMY 175
50...Fracture of spine 125
35....Hipdislcceii,'JF,L,??.,., 75
150....Frostatectomy .200
50...Jlormal delivery 80
100....Caesarean 150
150...Zemoval of Kidney 175
50....Remova1 of Cataract 150
100....Castrectomy 250
250...Tonsillectomy 55
25....Adenoidectomy 55
25....Hemorrhoidectomy 60
150...Hysterectomy 165
$1235
$2055
(The above, of course, disregards frequency of
occurrence - is set forth as a quick loft.)
SECRET
-15-
Surgical
$
25 $ 128
2
XX. The surgical fees scheduled
are accepted by the surgeon
as full payment for a single
participant if his tome
does not exceed $3000.00
and, for a tally partici-
pant, if the family income
does not exceed $5500.00.
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Approved For Release 2003/03/25 : CIA-RDP59-00882R000100260002-8
SECRET
4. OMAHA Premium (monthly)
Romp. Surgical Total
Media WWMP
WOOD IMPOI
OW." %MOP
GI Premiums .(montilly1
Hosp. Surgical. Total Diff.
$1.60 individual contract $1.70 $1.00 $2.70 i 1.10
4.75 individual & spouse contract 3.70 3.20 6.90 i 2.15
6.00 indiv. 84 spouse & children 3.70 3.20 6.90 i .90
If MARA should match MI on
surgical, monthly total premium
would be:
Total
Total
$1.60
/ .16
$2.70
4.75
/ .89 =
5.64
6.90
6.00
/ .8o =
6.80
6.90
SECRET
-16
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Riff.
Appr
For Release 2003/03/-RDP59-00882R00010026090 8
(g) Summary comparison of these two plans:
!wets general hoszltalization
OMAHA is far superior to One
2. Ove (sap maternity hospitalisation
is substantially superior to OHT in normal pregnancy.
In the cases involving Caesarean, termination of ectopic
pregnancy and miscarriage (ay. 10%, per Dr. Tietjen), OH/
is substantially superior.
2?
Overseas surgical,
OAIDA is only 60 as good as GH10
I, Domestic general hospitalization
Oftt is eUbstantially IVERIOR to OHI in either a normal
or abnormal case,
Domestic imgpfil*T1191E2
aipes su s aniay superior o
OH/ in normal pregnancy.
In 10% of the cases involving Caesarean, termination of
ectopic pregnancy and miscarriage, OHT is substantially
superior.
6. Domestic surgical
(AHA is only 60% as good as GH/0
7. Fees are the same in each plan as between overseas and
domestic. However, OMAHA's fees are all lower than OHI.
For individual contract OMAHA charges 60% of OM; for
individual and spouse OMAHA chargee 70% of GUT; for in-
dividual, spouse and, children OMAHA charges 88% of GUT,
but OHT doesnet offer just an individnal and spout.) con-
tract at a lower rate than one inclusive of children.
8. Net on the above" cp if CMAHA's surgical could meet 051, it
is & better plan than On for overseas if the dependents
are with the employee. Even if OMAHAls surgical meets OUT,
it is not as good a buy for domestic assignment.
20 As to hospitalization, the two plans are strictly comparable
in respect to an overseas location of the individual with
family, but impossible of comparison in the dementia situ-
ation. This is because the Oa hospitalizationbenefit is
buried under the comletely untrEnsltable wfnll aervice
benefits" with participating hospitali. While the non-
complicated case calls for a minimal few hospital extras,
the complicated case under OHI gets 16 of them free and as
many times as necessary. These variables cannot be assessed
dollar-wise for purpose of comparison with OMAHA.
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SPrinr
SECRET
Apprvil For Release 2003/03/20 . L,I1A-RDP59-00882R0001002600Q8
Even though it is true that the seriously complicated
case is statistically in the low frequency category, the
great dollar benefits undor GRI are nevertheless there
for the individual who wants to insure against precisely
such a risk.
It may be held that benefits in a serious case ride on
the backs of the non-complicated majority in respect to
fees, and also that throwing in "the works" for every
member is misleading pPrsuasiono However, the minority
who do get caught in heavy extras caret pay with statistics.
The simpleet and blandest appendectomy calls for about
$50000 in hospitalization extras. From there it could go
.anywhere in cost while the patient still lives.
/. Pregnancy hospitalization contains the same problem
but not as seriously so. In 90% of pregnancy cases
the normal ones . OMAHA is a better buy, but not so
if one Wishes to insure against costs arising out of
the minority of cases (toe. Caesarean section, terminaT
tion of ectopic pregnancy or miscarriFge)0 Here GRI
is superior.
b. Again in the domestic hospitalization field GHT adds
a fillip for the unusual case and offers $5.00 per day
for 180 days on top of the 21 "full" service benefit
days. (Room and board plus 16 namei extras) Strictly
from the point of view of frequency statistics, this
might be labeled a "come-en".
Co Also, in the Gill brochure is seen the same hand as
immediately above, i.e., the illustrated cases are
not the usual ones. They are in the relatively
Mrequent category, but because there are but three
of them, the coloration seem to be present. These
cases are cancer ($11049015 benefits), fractured
vertebrae ($337005 benefits) and gall atones ($518090
benefits)o
do 0HI requires a 90 days interval between discharge and
re.-entry to a hospital. OMAHA requires one day. Here
OHI is inconsistent with the preceding tactics as to
minority occurrences.
e? OMARPs fee schedule is superior both in dollars.
f. GM, being so firmly -enmeshed in legislrtion and se
integrated with the large and necessarily unwieldy
Blue Cross, presents practically no possibility of
rodification in. plan to suit us, whereas CPAHA is
completely flexible - even to a tailored plan.
Approved For Release 2003/03/25 : CIA-RDP59-00882R000100260002-8
ApprQvJ For Release 2003/03/2F5tRAI-RDP59-00882R000100260048
25X1A9A
25X1A9A
OMAHA's service to us in the settlement of claims
) is "vastly bAter" than GM? Mre
characterizes GUI as a "bickering, negotiating
outfit"0
he "Fine Print".
Comparison of these two plans in some small items is
important also because of the effect in irritation and
dollars?
Ambulance.
OHI won't pay to and from a hospital; Omaha wine
.1' X.-Rays.
OH/ won't pay unless the X.Ray'is in connection with
surgery performed within three days" time. Omaha will
pay with no surgery nor time restriction if the X-Ray
is taken in a hospital or clinic.
'it.. Hospital Extras,
OHI will pay on sixteen specific hospital extras
without limit, Omaha pays on all extras up to
their established maxistum of $1350000
.... Type of Hospital.
GHI's reimbursement is dependent upon type of
hospital, as follows:
?
Participating hospital - full benefit; member
hospital of another hospital service plan gets the
prevailing service of that plan; non-participating
hospital gets only up to $10.00 per day for 21 days,
plus $6600 for hospital extras (the same as the
OHI overseas rate). Omaha on the other hand reim-
burses the same all over the world in any hospital
of the individual's own choice.
tim Room and Board*,
The "full service benefit days" under GHT pertains
to a semi-private room, but if the individual chooses
or really needs a private room, OH/ allocates only
$10.00 per day. Omaha on the other hand pays the
contract guarantee for any accommodation?
Dependent Children,
Under OHI, they are added when 90 days old, and
carried to the 10th birthday. Under Omaha, they are
added when lh days old and carried to the lpth
birthday. Thia may well be important in connection
with congenital anomalies?
Approved For Release 2003/03/25.: iltA,RDP59-00882R000100260002-8
Apprvd For Release 2003/03/25: CIA-RDP59-00882R000100260048
SiLaa
-- Tuberculosis and Mental or Nervous Disorders.
Under C2111 these are covered for only 10 days during
any 12-month period. Under Omahal they are covered
for the same number of days and same frequency (one
day break only) aa all other accidents or illnesses.
-- Congenital Anomalies. (viz: cleft palate, congenital
hernia)
Under GNI, not covered at all. Under Omahal full
coverage at any age, after 14 days from birth.
-- Outpatient Emergency First Aid,.
GNI requires reporting within two hours of accident,
else they won't pay. Omzha allows 24 hours.
SECRET
- 20 -
Approved For Release 2003/03/25 : CIA-RDP59-00882R000100260002-8
For ReJease, 2003/03/25 : CIA-RDP59-00882R00010026048
PART
dtehiT _
Disability(
DISCUSUI-
1,1
. !Toting: that there exists in. the commereial market beneficial
covertge for perMenent and total 'disability, as well as various
' and semary plans for indinriduca purchase in temporary disability;
that /WA is excelleet coverage for either permanent or temporary
disablaity, gegen:in& in performance of duty; that CSRA is
*CoverOge fer an Venni' the Personnel of which is young, outside
of performance of duty; - the Agency is properly concerned to offer
its employees the benefit of group rates for temporary disability that
inc1e4es family protection. This coverage is found in e. hospitaliza-
tion qz4 surgical plan.
? ;t is possible to bey practically anything in this field at a
price. The problem is - what coverage features should we offer and
haw fax should they go.
? (1) The latter brings to mind the importance of the principle of
co-insurance, as to catastrophic or low-incidence excessive
dosts Where-in given features are cevered np to a normal or
efrernSe-cireVmstanees extent and from that pointon the
surer COrr$00 the larger burden with ehejndiVidVal Oaring
, _ .
apart or it. The philosophy is roughly that of automobile
collision insurance with a $50.00 or $100.00 deductible clause-
c. The Agencies offer of two largely non-comparable hospital and
surgical plenseto_its employees is failure to meet its groper
persentiel respensibility. It is rolling with whatever an outsider
has tceoffer. It fails to utilize Agency strength to get e one
best plan which defers to operational and security circumeterafe
and to the facts of illnesses.
d. Omaha se original grievously inedevete plan - in effect until
1 Sept. '53 - and improved somewhat then, is a sad reflection on
us. Their improved plan is some better, but net nearly enough so.
(1) Then te offer GHIe - by and. large poorer than Omaha overseas -
to this heavily ceerseas business is to compceed our error.
This is particularly so in light of Opaha's_flexibility i.e.
c lete willingness to tailor a plan, and its 100% security.
Omaha will accept Agency certification of circumstance and.
p4y to anyone to whom ana hew we designate.) The Agency also
got iha-ihis rigid association. ORI prevents us from
Wee the advantage of our own experience (presumably
tter); hence in our premium rates we carry poorer risks
han we and deprive ourselves of downward adjustment es
deserved.
=ROT
Approved For Release 2003/03/25 ? CIA-RDP59-00882R000100260002-8
Apprtyl For Release 2003/K2154,CIA-RDP59-00882R00010026048
It is suggested that the Omaha experience is statistically suffi-
_
cien'4 to provide a critical basis for assessing our coverage needs.
Accordingly these general conditions seem indicative.
(1) The incidence of actual cost hits heaviest in the surgical
field (41%), Hospital board and rope is next (32%) and hospi-
tal extras are seen not to occupy as great importance as often
thought (27%).
(2) Pregnancy and complications therefrom, stand out with heavy
Incidence. 42% of the employees' total actual costs are in
tlqii5 one field.
Hospitalization coverage beyond 15 days is for the last 5% of
Incidence, but the insurance company knows its premium rate
carries no teal burden when coverage extends from 15 to 31 days.
(Experience identical under OHI).
The same observations - as in (3) above Obtains in respect to
surgery. Total actual costs are almost entirely below $300. -
(97%). One can cover the unusual, even beyond actual incidence
for no real premium burden.
Equally so - as in (3) and (4) above, the picture of total
hospital Extras cost conforms. 96% are covered in a plan
embracing up to $150.
(6) :ndeminification return of premiums paid at 50% under the pre-
sent Omaha plan is woefully insufficient. Omaha admits it.
Indemiaification return of actual costs to the employee at 67%
is not Jew
(8) Omaha admits that its surgical coverage with 41% indemnifi-
cation on actual costs is poor.
2 5X1A 9A
f. Gill's attitude is that of doing us a favor. When
(Task force member and Chief, Insurance and Claims Branch, Em-
ployee Services Division, Office of Personnel), approached. them
for SQVie modest statistics concerning our ewn experience the
respo4se was: "If you require this kind of information, it might
be better for you to take your business elsewhere." Also they
refused us and Wyatt a balance sheet.
g- Ggi's balance sheet and Operating Statement reveal a reserve ac-
cuirol7at1on that might be warrantable in a catastrophic-coverage
situation - which they don't have. Liabilities under their plan
are predictable, by and large; the premium rates, producing a 12%
SECRET
Approved For Re)ease 2003/ft3in CIA-RDP59-00882R000100260002-8
ApprVil For Release 200MVSS: CIA-RDP59-00882R0001002600Q8
gross profit in 1952, and a ratio of assets to liabilities of
nearly 2 to 1 seem out-of-line with true risk assumed.
Under the GUI plan, if an employee cannot reveal Agency affiliation,
indemnification is at the poor overseas rate - poorer than the
existing Omaha inadequate rate. The employee cannot get the "full-
service benefit" day as in an overt domestic situation.
GHI's plan means that we will never know where we stand - experience
versus premiums and never get the benefit of our experience if it
proves better than others. 0maha offers to do this.
GUI's inter-plan feature (wide-spread Blue-Cross tie-in) is countered
by Omaha's willingness to continue coverage for the terminated
individual at a non-group rate without medical examination or
Statement of health, - as long as he wishes - or until he acquires
membership in a new group plan. (The non-group premium is 2)%
higher.)
k. With the differing benefits of Omaha and 011I, overseas versus
domestic, the employee is pulled about in his attempt to secure
adequate coverage. This is highly unsatisfactory.
1. The 3 types of contract offered by Omaha' show these premium. dif-
ferentials -
(1)
Individual contract premium
$1.60 (monthly)
(2)
Individual and spouse contract
premium
$4.75 (monthly)
(3)
Individual, spouse and children
contract premium
$6.00 (monthly)
GNI combines the and and 3rd groups above into a single premium
rate which means that 758 #2t are carrying part of the cost for
1615 #3s. Perhaps the #1 rate contains a cut of this burden also.
The youth of our Agency (2/3 under 35 years of age) suggests that
-
the single individual plus individual and spouse help carry, in
premium rates, some of the family contract burden.
SECRET
Approved For Release 2003/03/25 : CIA-RDP59-00882R000100260002-8
- 23 -
Appriol For Release 2003/03k*.fp
a?
SION
Bo the Omaha and MI plans are entirely unsatisfactory.
(1) Neither plan offers enough.
(2) Neither plan offers opportunity to relate premiums to our
experience.
Neither plan takes advantage of actual previous experience in
Its coverage features.
(4) Neither plan takes advantage of the co-insurance_philopophy
to base premium rates in the higher incidence circumstances
sha still protect the minority substantially.
(5) Security-wise only Omaha offers - or can offer a completely
Oatisfactory situation for the employee who cannot admit
Agency affiliation.
(6) The Agency must offer one best plan.
(7) Adding the tangibles and intangibles in the forgoing eqmparisons,
bmaha offers excellent and the only potential for improvement.
-RDP59-00882R0001
- - I
(3)
Approved For Release 2003/03/25getheDP59-00882R000100260002-8
ApprVI For Release 2003/03/25 : CIA-RDP59-00882R00010026000 8
SECRET PART II
Disability
RECOMMENDATION
The Agency accept and offer to its staff employees and staff
agents, the new Omaha plan (next hereto) proposed by the Task
Force and worked out with the local Omaha office together with
W. A. W. Randall; head of the Omaha Compaay's Group Insurance
Department, and*. Gale Davis, Omaha's No. 1 vice-president.
That the DD/A and General Counsel proceed from here on to embody
this plan in a contract.
e. That AD Personnel take over responsibility for appropriate Agency
publicity on the plan and continue the study of any possible amend-
ment for coverage of home and doctor's office costs.
d. That the Task Force go out of business in respect to disability
insurance.
UMW
Approved For Release 2003/0/25 :.CIA-RDP59-00882R000100260002-8
OMAHA
Present Omaha Contract
OVERSEAS
Hospitalization
Approved For Release 2003/03/25 : IA-RDP59-00882R000100260002-8
1. Hosp. Room & Board: $9.00 per day for 31 days
with no limit on frequency, (1 day break)
plus $135.00 for hospital extras except
maternity - see #5 below.
2. Plus out-patient emergency up to
within 24 hours of accident
3. Effective date of Contract - 1st of next month
4. Waiting period. Maternity only. 9 mos., but
coverage extends 9 mos. beyond termination of
membership
5. Maternity - $9.00 per day Room & Board for 14
days plus up to $45.00 total for Hosp. extras
6. TB, mental disorders, nervous disorders and
quarantinable diseases - same as #1 above
7. Ambulance - pays
8. X-ray - pays - no restriction if in hospital
or clinic
9. Dependent - added after 14th dsy to 19th .
Children birthday
10. Congenital - full coverage at any age after
Anomalies the 14th day following birth
11. Pre-existing conditions - covered
12. Laboratory tests - all covered
$135
Present MT Contract
OVERSEAS
Hospitalization
1. Hosp. Room & Board: $1(1,00 per day for 21
with 90 day interval on frequency, plus
$64.00 for hospital extras (16) except
maternity see #5 below.
risvg
2. Plus out-patient emergency up to $ 10
within 2 hours of accident
3. Effective date of Contract - 1st of next month
4. Waiting period. None for the applicant who
joined initially in March 1953 or for the EOD
since then. Otherwise 10 months for maternity,
tonsillectomy, adenoidectomy and 1 year for all
pre-existing conditions.
5. Maternity - $9.00 per day Room & Board for 8
days except Caesarean, termination of ectopic
pregnancy and miscarriage, for which hos-
pitalization benefits are 1. above
6. TB, mental disorders, nervous disorders and
quarantinable diseases - 10 day limit during
any 12 month period for #1 above
7. Ambulance - doesn't pay
8. X-ray - pays only if connected with surgery
within 3 days and in a hospital
9. Dependent - added after 90th day to
Children birthday
10. Congenital - not covered
Anomalies
g. NEW OMAHA
The New Omaha Plan
OVERSEAS
Hospitalization
1. Hfl.p. Room & $9.00 per day for 90 days
with no limit on frequency (1 day break)
plus Hosp. Extras: $135.00 unallocated,
except maternity - see #5 below.
2. Plus out-patient emergency up to $135
within 24 hours of accident
3. Effective date of Contract - 1st of next month
L. Waiting period. None if participation of
members is 75f of GEHA, and none on transfer
from GHI, except for maternity wherein in all
cases waiting period is 9 months, but coverage
extends 9 months beyond termination of mem-
bership.
5. Maternity - $9.00 per day Room .4 Board for 8
days, except Caesarean, termination of ectopic
pregnancy and miscarriage, for which hos-
pitalization is #1 above (Omaha's National
average for normal delivery is 6.6 days)
6. Same-as-Preeent-emaha-Gentraet-
42.7 2ze. /
7. Ambulance - pays
8. X-ray - pays - no restriction if in hospital
TTinic
18th 9. Dependent -.added after lith day to 19th
Children birthday
10. Congenital - full coverage at any age after
Anomalies the 14th day following birth
U. not covered if membership falls below 75%
12. only initial test - urinalysis and blood count only
11. covered
12. all covered
Approved For Release 2003/03/25 : CIA-RDP59-00882R000100260002-8
14. Diagnosis - covered
Service connected disability - covered
16. Physical therapy - covered
17. Specify members of family for coverage
18. Private nurses - not covered
19. Premium based on experience - Yes
20. Rest cures - covered
21. Plastic surgery - covered
22. Dental sargery
14. not covered
Approved For'Relleage12iO3/03/25
16. not covered
111. covered
1. covered
: CIA-RDP59-00882R00010036029e2J
- No 17. Yes - Name and date of birth must be sent in,
otherwise not covered
18. not covered
19. No
20. not covered - a named exclusion
21. not covered unless the injury is received
after individual is a subscriber
22. if hospitalized will pay only if performed
by an M. D.
SECRE);
17. No specification
18. not covered
19. Yes, yearly modification possible
20. covered #1 above
21. covered regardless of when injury was received
22. if hospitalized will pay if performed by a
dentist, a dental surgeon or an ME. D.
Approved For Release 2003/03/25: CIA-RDP59-00882R000100260002-8
III MMMMM=M 1111111111111.11.1MMIIIMEMINIMMIIIINIMIMINIIIIIINVINITRIVIMIIIIMPIMITIMW ? '
Approved For Release 2003/03/25 CIA-RDP59-00882R000100260002-8
WASHINGTON
Hospitalization
1. Hosp. Room & Board: $9.00 per day for 31 days
with no limit on frequency (1 day break)
plus $135.00 max. for hospital extras
2. Plua out-_,patient emergency up to $135
within 24 hours of accident
3 thru fit Same as Overseas
Same as Washington
CHI
1.
WASHINGTON
Hospitalization
Hosp. Room & Board plus 16 named extras for 21
days (Semi-pH. - Partic. Hospital) with 90
day interval on frequency plus $5.00 per day
for additional 180 days. If private room,
$10.00 per day only for Room & Board.
2. Plus out-patient emergency up to
within 2 hours of accident
3 thru IQ.- Same as Overseas
DOMESTIC U.S. OUTSIDE WASHINGTON AND CANADA
- If in participating hospital, the benefits
are those of local Blue Cross in the area
- If in non-participating hospital, the
benefits are the same as the overseas
rates
WASHINGTON
Na OMAHA Hospitalization
1. Hosp. Room & Board: $13.50 per day for 93
days with no limit on frequency (1 day break)
plus hosp. extras of $202.50 unallocated
plus 75% of the next $5,000.00 of hosp.
extras
$ 10 2. Plus out-patient emergency up to $202.5
within 24 hours of accident
3, h, 6 thru 10. Same as Overseas
5. Maternity - $9.00 per day for 8 days except
for Caesarean, termination of ectopic preg-
nancy or miscarriage for which hospitaliza-
tion is the Washington fl above
Same as Washington
Approved For Release 2003/03/25 : CIA-RDP59-00882R000100260002-8
$ 0 Hernia Ing'. uitil $100. ---11-00.
75 " " bilat 140. 140.
100 Appendectorny...,,,,,M
Approgkid FtallaeleS5eti?fOLWIV.44 : CIA-RDM%00882R000100260002-8
50 Fracture of spine 125. 93.75
35 Hip dislocation 75. 43.75
150 Prostatectomy 200. 187.50
50 Normal delivery 80. 80.00
100 Caesarean 150. 150.
150 Removal of kidney 175. 250.
50 " " cAteract 150. 187.50
100 Gastrectomy? 250. 250.
25 Tonsillectomy 55. 55.
25 Adenoidectomy 55. 55.
25 Hemorrhoidectomy 60. 62.50
150 Hysterectomy 165. 165.
50 Amputation-arm, foot 85. 125.
50 Skn11 fracture -compound.200. 250.
50 Fracture of base of
spine 35. 62.50
35 Branchoscopy 25. 50.
25 Varicocele removal 50. 62.50
75 Thyroid removal 200. 187.50
) 75 Mastoidectomy, Simple.. .150. 125.
100 " ' , radical..200. 187.50
TIE95. 42920. $3158.56
Average $71. Average $122. Average $132.
58% of CHI
OMAHACHI NEW OMAHA
Premium (monthly) Premium (monthly)
Premium (monthly)
liosp. Surgical Total ,
Romp. Surgical Total 1 Total Diff.
---- ---- 1W7..1ndividua1 contrlact 1 70 1.00 7:76-
- - - - ____ ---- 2.70
4.75...ind1v. dc spouse contract 3 70 3.20 6.90
- - - - ---- 7.98 +1.08
6.00...indiv. & spouse & children....3.70 3.20 6.90 ---- ---- 7.98 +1.08
;
EtRET
Approved For Release 2003/03/25 : CIA-RDP59-00882R000100260002-8
Aelved For Release 209: CIA-RDP59-00882R000100"002-8
TAB A
DEATH STATISTICS
STAW MapIMEES AND STAFF AGENTS _FOR CIA
AND STAFF E11PT1DYEES FOR STATE AND AGRICULTURE
10 A Comparison of death incidence *with the Foreign Service and, Depertmental
. Department of State; and'ulth Department of Agriculture Benvficial Association;
and with U. 5, mortalitv tables. ?
Average
10.17 au 22112.= 1211 2.4)2Agi 112.252
CI"'
Tatal in service deaths
Ay& Monthly Strength
Deaths per 1000
(physical given)
hyi Foreign Serv,
in Service deaths
Av0, Monthly Strength
Deaths per 1000
(physical given)
State . Departmental
in Serviee deaths
Ar. monthly strength
Deaths per 1000
(no physical exam
A lture Den, Assn,-
ge75475T-
Total deaths incl.-oepld
Strngth of Assyn.
Deaths per 1000
(no physical exam)
Mo.
/0 15? a 5 8 7
5373 7898 8692 8993 7562 8h16
1.86 1.90 .92 056 1006 083
.41P
. 7 0
? 10630 7870
p66 2,29
17i/19
9316 10046
1,824/1.82
12
8166
1.47
182 234
. 1612216193
0, 1103 14.5
16
9176
1. 7 5 dif
(1.54)
190
217
232
2/3
16161
16045
16080
16095
1108
1305
14.4
13.2
y44. poln9Ation as a whole(eaths per 1000)
(1) Estimate fat! 1951 by the world Almanac 0 0 .4 ? 907
(2) U.S. Public Health Service for 1952 . ? * 6 ? 906
-ends*.
and . see Ti E for sources, .
Contains 5 deaths from singlepaane crash If not.includedtho ratio is sham in
e Not separated from service, )?abovo.
11
25X9A2
SECRPT
Approved For Release 2003/03/25 : CIA-RDP59-00882R000100260002-8
Applaveyd For Release 2003/WHFCIA-RDP59-00882R000100260C1-8 TIE A
CoMariam b7 Office Om) (37 Total for years G52 and v53 only)
_Dpa M DD/A C011-10 Ce-
1952
1953
Total
AvRaga
Average Mlathly Strangth
Deaths per 1000
*StatistloaUy Ttloignifioant
10
6
2
0
1
-6
3
COMM%
ea,
16
9
.116,411.
7
8
4.5
365
25X9A2
3. Comparloon by Offica (69 Tbtal all yews)
aDiz 1;214 D.)24.1 05)1
26 22 2)4 3 3
Place of doa.th (CIA) (69 Total - all yoars)
2
25X1A6A
Approved For Release 2003/ffir (bIA-RDP59-00882R000100260002-8
Approvil For Release 2003/03/?Pan-RDP59-00882R00010026001ja TAB A
(CIA):
Heart
Canoed,
Suicide kti
Ulcers: tbstruction: Peritoni+is
Polio (3) Diphtheria (l)
Complications following operation
Accident not in line of duty
25
11
6
6
2
5
(35%)
(16%)
( 9%)
(
JJ,S. pa.il
32.5%
.
13 I)1.%
By fire while ysting
1
By air crash on LWOP
1
By umntain climbing
1
By auto collisions
2
Accident in performance of duty
By explosion of gasoline 1
By air crash (Schad.) 3
By air crash (Nen.Sched.) 1
By boom of crane 1
By ship sinking
By shooting (2n1 part') 1
By enemy action
TOTAL
(P
or
8 (12%)
69
VINCE OF DUE TOTALS 10 (14.7%)
U. S. Public Health Service 1948 Vital Statistics for U. S. Population
as to death from "selected causean (most). Rates per 1000 al =id.
year population.
All Causes..
Heart
Cancer
Suicide
Ages
All Causes
1.79-77
Heart
.085
.208
Cancer
.056
.168
&Acids
.047
.090
!La
9*(140
.654 2,918
,598 1.718
0147 .208
9.085
3:227
1.349
.112
5.5:?4 6
19;35g ))
7.259
17.908
3.789
7:347
:255
.288
tf U. S. Public Health Service 1948
d,
. 5*suioides DDip
Performance of Duty in DWI)
-a 3 -
Approved For Release 2003/0MP bIA-RDP59-00882R000100260002-8
Apprvl For Release 200 CIA-RDP59-00882R0001002600
7 CIA ages at death for all cases (49) in th 'years 1951, 1952D 1953
' ae
Under
25
n
30
ti
35
IT
40
ill
45
a
50
a
55
0
60
a
65
"
70.
#
75
Cumulative Percent of
Totals Grand Total
4 casas e
14 28
19 38
23 46
29 58
33 66
40 80
44 88
47 94
47 94
40 ' loo
8, CIA ages related to total deaths for the same age groups (Cumulative
% to total in both oases) ,.
Ago Death
Dietzbibution il Distribution W
Cukor 25 16% 8%
? 30 42% 28%
ft 35 64% 38%
? ho 72% 46%
45 89% 58%
? 50 95% 66%
.? 55 97% 80%
? 60 99% 88%
arA104.111?111.111101
As of 30 June 1953 (no significant change as of jam, '54)
3./year totals - 19512 19522 1953.
- 4 -
SECRE T
Approved For Release 2003/03/25 : CIA-RDP59-00882R000100260002-8
Approvig For Release 2003/03411PM-RDP59-00882R0001002600W
9. Ages at death in 3 categories (Total
Notes Total of 42 in these 3 Heart
categories is 62% of grand total)
24
25
26
27
28
29
30 1
33.
32
Agency 5.E. ee 5.11.'47-'53s
Cancer Suicide
-
TA.B A
incl.)
(Location)
25X9A2
1
r6r-
1
1
35
36
37
38
1
39
13.
40
1
13.
41
au us
42
1
43
1
FE US
44
1
3.
45
3.
46
11
147
48
49
1
1
50
1
in51
$2
53
1
514
1
55
56
57
1
58
1
59
13.
60
63.
1
62
63
614
65
66
67
68
69
70
71.
1
72
Approved For Release 2003/0sE3F25: CIA-RDP59-00882R000100260002-8
Apprud For Release 2003/MettIA-RDP59-00882R0001002615-8 TAB A
AGES OP EMPLOYEES STAFF EDIPLCtEEES AND S TAIT AGENTS ONLY)
No.
aka 115.222 ar.51 0_7?2 CARir 6
tate
oreign Svc.
396
1225
1294
1017
598
/.138
287
208
92
kr 29
GUM No. '
1621
2915
3932
4530
4968
5255
5463
5555
Own o %
74
29.
52
70
82.
89
94
98
99
partmantal
337
710
Z2
866
713
515
358
257
130
56
Gum. No.
1047
1999
2865
3578
4093
4451
4708
4838
Cum, ?,,',
619
21.4
41.
58,5
73
83.2
91.
96.
99
Cum, No,
Cum. %
1..ert
CTA FigUre3 are as of
31 Dec. 1953 from llescarch Branch, Plans, Research
& Dove1opMent Staff Offios of Personnel.
6
Approved For Release 2003I0,i/J.
oratia
25X9A1
25X9A2
Approved For Release 2003/03/25 : CIA-RDP59-00882R000100260002-8
(4) TAB
1. Facts in respect to death - as to existing available protective features
berzficiary coverage. These are:
a. ComvP.,r:cial Ordiznam Life poliies
ft*
(1) Most importentll.y for us is the matter of exclrsions from cover,?
- age . and here .the poliales vary considerably. However# some
aspects which are generally cowmen are ,thea
The incortestibilLtypsTiod for all features of the policy
is 2 years (all of those lit-ad except Wpw 'York Life!)
which is I year).
Tho Basic (Face amount) Policy comtaiLs air flight exclu-
sion as follows:
Am' flight operated forrdliterzmmos91.1 or where the
insured individual acts as a wrev=#*,,, has dutia
aboard, parachutes or cites in
testillg experimental or trainimpurponss
Nan-Scheduled Airlines are not dealt Rith
as such ex,tept by Prudential which vonet cover am-
such flight.
Invariably, all flights as a passenger in commercial
scheduled airlines of aw country are eovered risks
todg70 *a
(d) The Basic (Face ammnt) Policy contaiar3 war exclusions
(declared or undeclared war) as felms
Death arising from an act of war while :in either mili-
tary or civilian service outside the Hoas Areas or
witbin 6 months aftor return to HOM5 iROase 1141*
akamiratioa -uas racla of sample policies from Acazlap John Hemlocks
M. Y. tafe, Of.laM tin. Ben, Liros, Guardians Prudeutials Zravelorso
Linzoin Natal.p P3M1 Mutual.
Radaldulcd Airlinas" are commonly defined as follgaz nAircraft operated
op schedule for comoratal purposes by an incorporated and govarnmentally
c6rtAXIod Sohldulod Commercial Air Carrier over an established route
between specified airports."
The HOE0 Areas are commonly defined as the U40, Genadas Panama, D. C.0
Puerto Rico and Virgin Islands.
SECRET
Approved For Release 2003/03/25 : CIA-RDP59-00882R000100260002-8
Abed For Release 2003ffigiCIA-RDP59-00882R00010026tM B
(a)
The Double Indemnity (twice the Face Amount) accidental
death feetere contains. all the foregoing exclusions eles
selfeinflicted cause, illnesp or disease* geb.oe feeep.,
assault or felopy, war, insurrectioee riot,eilitary ser-
vice during time.of war, and air flight in noneeeeeduled
airlines.
(2) The risks of Agency hazardous and semi-hazardous duty not
covered by Ordinary Life policies aret
(a)
In respect to the Basic (Face Amount) policy:
16 Air flight in military or non-scheduled plaaas
for the purpose of tesang or training (1SS and
TRS), for military purposes .(OPS), acting as a
crew member or with duties aboard, parachuting
and in SOM3 oases as a passenger in nee-
seheds (TRS,'ISS, OPS).
2, Eeposure to an act of war (deelered or not), mili-
tary or civilians while ceeteide home areas c(.. dur-
ing six months after return.
(b) In respect to the Double In4enity Accidental Death
feature:
1. All of the above plus pepoeure to disease, illnees,
gas or fumes, assault, felagf, riot* insurrection,
military service, and air flight in noneecheds 2S
ar passenger..
(
(3) It ie to be noted that in addition to the above listed risk,
there are 16 hazardous duty reeks which, if revealed in the
candidatete application for insurance or ferreted oet by tha
agent, would probably either exclude acceptance or provide
coveratee in seme cases, at an excessive pre:dere However,
given acceptance of the candidate on a non-hazardous ocaupae
titan description, the policy is ipzecure for two years (the
conteatibilitY Paric4), The insurance comparaes are already
suspicious of us.
b. National Service ire Insurance or U. S. Government Life Insurance
.(1) Both of these policies are GI - the latter available in
World Wer Ts and since, to .that veteran if in active service, and
NSLI dueleg and since World Wer'IIwithout previous cerice. The
only difference is that U. S. Government Life has e double
ability feature for a small additional premium.* NSLI does 11.0Vo:
Approved For Release 2003/03125 :`?CIA-RDP59-00882R000100260002-8
Appcord For Release 2003/03/25 : CIA-RDP59-00882R0001002610W-8
Tor TAB B
(2) Both of these policies are incontestible from date of issue
for ax y oleos exnept fraud, in both deaticw-larantir--
feateree. i.e., Niexclusions.
co
(1) This act provides compensation for disability, death and medical
care (includipehoppitalisatio0 resulting from injuries suffered
in P61'10=411.00 of duties or from diseases imatelycaused by
epp ".01usione from coverage are isabilities or death
resulting frommillftl mistendect, self-inflicted action, or
intoxication*
(2) MCA . as to death benefits *
(a)- Purls/ expenses up to 340040 plus transportation of
remains to home.
(b) Widow no other de ndents. 45% of pay ** not to exceed
?0 monthly until her death or remarriage.
? (e) Widow with 2 unmarried children under 18 ars of 0
pay w ow p us for eac o o a ) not
to exceed (75% or ealY in any case) $525000 total per month
until death or remarriage of widow and until children marry,
? die, or reach 18 years of'age as to their part.
(d) Na widow 2 unmarried children under 18 are of 4fil.
357 of pay for or 7r., or e oi ar no .0 exceed
(75% of pay in any case)total of $525.00 per month until
children parry' die, or reach 18 years of age.
(3) In summary, doritinuing death benefits to beneficiaries Arising
? from injuriee suffered in performance of duty or from disease
praximatelZ caused by emplorment are these . for the situations
i t
ihe statement of benefits below, is translated leer here with chosen examples*
.1he pay or salary rate for this purpose includes all apeunts withheld for tax
and retiremeht purposes elus value of eut're., quarters and other consider-
ations as part of pay.
Approved For Release 2003/03/25 ? CIA-RDP59-00882R000100260002-8
SECRET;
ApPr
For Release 2003/03/25 : CIA-RDP59-00882R000100260002-8
SECRE'
G841
EnPleyee
B?snaficiarz dies inV S
GS.11
Employee dies
in Frankfurt*
TAB B
(a)
Widow only
0222.75
025450
(34041114)
(b)
Widow and 2 children
328.16
399.00
(menth4)
(c)
2 children only
239.16
285000
(ment14)
(4) This act is an exclusive romo43r0 but does not prevent the beneficiary
from electing to receive the Zenefite of the Civil ServiCe Rstirema4t
Act if dho so desiree, but she cannot recaive gre.,:q1 i)enefite coneur.
ently with those under FECA.
(5) All hazardous duty or rx-rd.41.,azamlous duty rieke 2.1u.bry Agenay emplo -8
are covered by EWA urAer the conditions of perfcrm=ce ef duty dr
prazimate cause rotting in employment.
atvil Send** RoUrs.mut Act
(1)
Vile Act provides death and diecbility bor11t s uaployees of the
U4 $. Goverment with and without ? forkaace o 1 e of outy
fication prauided o amp oyee ,as acq, -63 nvutu eug. igi1t7-4577
TE.75.1?di'five years of civilian service ** intlttent or otherwise*
As noted in the previous analyels of MCI, no coming benefit unasr
this Act can ran conourrenqy w h VEGA benefits. he individual
concerned (emp/oye or beneficiary) rAy Ca0008.
(2) Exclusions from coverage are conn With YICAD i41,9 willful miscon,
duct, vicious habits and intemperance, lh reart.a.e. to disability
only.
3) The continuing Le-nef.3_te are araanity? in nature, cavated as a per
of the highest fyeer aVerago base sEi.z..3* moth'f:Led by the
ye QrS of creditable service. ML4.itart service c2.:_t Le added to ti.:e
civilian years fca this cputation. No additicoJ :;:or overseas allow.
aos are permitted e..5 in the case of MCA.
'q=le includes the addition 9f 900.00 quarters alayance annually.
11114er 5 yogm; of service, or more then 5 years no widow GT
dependent children, the Act provides for a lump em of amount
paid.in, plus Interest.
ai
SEC=-T
Approved For Release 2003/03/25 : CIA-RDP59-00882R000100260002-8
Appoed For Release 200aER : CIA-RDP59-00882R00010026VC
(4) As to death benefits:
(a) Widow . no other dependents,
50 % of employee's then annuity benefit, attainable when
widow reaches age 50, and terminable when she dies or
remarries,
(b) Widow and 2 childrent Immediately payale*
50% of euployee's then annuity benefit, plus to each child
.10% of the widow's annuity, not to exceed $900000 annually,
. divided by the number of children, or 060.00 annually,
whichever is lesser . terminable to each child on death
or marriage or attainment of age 18, except that if such
child is incapable of self.eupport, terminable on death,
or marriage or recovery* Upon death of widow, recompute
as in (c) below*
No widow, 2 children only. ImmediatelY payable
543% of employee's than annuiey benefit to each child not to
exceed $1200.00 annually divided by the naMF of children or
$480000 annually, Whichever is lesser . terminable as above
in (b) and, in case of termination to one child, recompute
as if that child had not survived the annuitant, loe" a
case of one child only.
(d) In summary, as to continuing benefits to dependents*:
(e)
Employee Employee
G8-11 G5.11
getegory. 2.718? 'mat
Widow only $33 42
Widow plus 2 children 66,84
2 children only 66,84
The stater:ant of benefite below is translated later
here with chosen examples*
- 5 .
SECRET
Adry.20.Lea.LIVO
$55,69 monthly (at
age 50)
111,39 monthly.
(immediately)
80.00 mbnthly M8X9
(immediately)
Approved For Release 2003/03/25 : CIA-RDP59-00882R000100260002-8
Apprvil For Release 2003/MarmplA-RDP59-00882R000100260V8
e, Public Law 110 as to death . on PCS abroad
(1) Pay the cost of preparing and transporting the remains
of an employee, or member of his family, who may die in
travel status or abroad to appropriate place of
interment
f. War Agencies Employees Protective Association (WAEPA)
(1) This is a non.profit association independent of the U. Se
Government, which provides death benefits only, in two (2)
cetegories - term life insurance and accidental death, and
only to civilian employees of the U. S. Government.
This insurance is effective only when the ledividual is actively
employed, not including terminal leave. Eligibility extends to
age 60 and membership in the Association terminates at age 65
or upon entry into the Armed Forces of any county. Membership
is open to any employee of this Agency "Who may go overseas at
some future time." (see Appendix II) and without a medical
exesination, it he applies within do days "after becoming
eligible." If application i; later than these 60 day; a "state-
ment of heath" is required. Eligibility extends to any indivi-
dual paid from appropriated fends of this Goverment (ewe
Appendix III). On termination of government service the term
life-featare may be converted into one of the Underwriters
standard ordinary life policies, without medical examination.
(3) The policy is effective on the date of application if the appli-
cation is acceptable to the Associatien, There is 75 cosbestible
period as in Ordinary Life policies and, in respect to the term
insurance part af the policy, no exclesiOns of a4y. kind. The
accidental death feature has these five (5) exclusions:
(a) Bacterial infections (except pyogenic infection arising
from accidental wound).
(b) Any kind of disease.
(c) Wedical treatment (except from accidental injuries).
(d) Suicide
-(2)
TAB B
(a)
Air flight in non-scheduled flight, unless under orders of
the U. S. GoVernment, and in anY flight as a crew member of
the plane (see WAEPA letter 15 January 19532 Appendix I
herewith).
Approved For Release 2003/03WEFIA-RDP59-00882R000100260002-8
Apuved For Release 2003/%576CIA-RDP59-00882R0001002 0'141001
00 Death benefits now are:
?-4/001 Term Life ins. Accidental Death
3200 or over 12,000 /5,000
(5) Costs are:
(6)
Total
27,000
Age up to 41
Age 41 to 51
Age 51 to 65
$8033 per month
10.142 per month
12.50 per month
25.00 Quartaay
ft
31.25
37,50 ri
100.00 Annually
3.25000 ft
150.00 "
The underwriters are:
(a) Equitable Life Assurance Society of the U. S. as to the term
feature.
(b) American Casualty Company of Reading,
. death benefit.
(7) Our experience witb. MEM is as follows:
Pa, ae to the accidental
(a)
Total Premiums Paid
Total
Total Benefits Paid
Total
1947
7,915.25
0
1948
14630.00
0
1949
14,615.50
0
3.950
20,299.43
0
3.951
55,400.82
270000.00 1 death
1952
117,437.29
121000.00 1 death
1953
156,547.46
18,103.00_2 deaths
,
383,845.75
57,103.00
(b)
Total Premiums Paid
Number of Persons
Ave Eer month
Insured
1947
791000
79
1948
969.00
216
1949
10218.00
1146
2950
1,691.00
203
1951
14,63.6.00
554
3.952
9,766,00
1,174
1953
13,0145.00
1,565
This salary is about GS-4; for salaries below this figure ($3200), the
benefits and costs are approximately one-half of the amounts shown
above. See rates in Brochure.
7
SECRET
Approved For Release 2003/03/25: CIA-RDP59-00882R000100260002-8
(8)
Ap1:11:7d For Release 2003/0325 :,CIA-RDP59-00882R0001002644-8
atlp koul..LA
(c) Length of tiTe contracts in force 1947-1953 inclusive.
Cancelled Contracts
.4.
Up to 3 moo. 56 (10%)
n
11 11 7 si
n "13 n
"19 n' 169 (301
119 (2;%
70 (13%
n
r 25 n 60(11%
n "37 r .20(3.6%)
U n 43 " 7
11 "19 u 1
0
o 11 61 ft 3
" 157 o 2
nn 73 II 1 5
n " 79 n 0 1
n n 85 n 0 1
Total 553 1461
TAB B
Existing contracts in
force as of 1 Jan. 1954
113
201 (13.7%)
197 (13.5%)
259 (17,7%)
258 (17.71)
201 (13.7%)
127 ( 8.7%)
73 ( 5.01)
9
4
5
7
(4) Kodifying factors in the above are:
10 in 1950 WAEPA added $2000 to the term coverage
20 in 1951 " added $15,000 accidental death coverage
20 in 1953 TAWEPA added eligibility liberalization to reads
"00. available to anyone (in CIA) mho my go overseas at
some future time." Previcus1y, oversees orders had to
be out.
Ili Bad Agency publicity.
DDI reports no interest in risk coverage on the part of his people
but a good interest in group life (term) coverage. They feel that
with 99% of them, not going overseas at any time, th,Tr would be
straining the truth to appIyfor %MIA.
(a) He also reports that they don't know the exclusions in their
00 L. policies. Nor do they know anything about F.E.C.A.
Recapitulation as to continuing benefits 'after death.
(1) In order to assess practically the asset values to the beneficiary
in existing available protective measures, certain assumptions as
to asset (or proceeds) disposition.methods are utilized as follows:
. 8 .
Approved For Release 2003/042401211A-RDP59-00882R000100260002-8
ApprNed For Release 2003/03/25 ? CIA-RDP59-00882R0001002600424AB
SECHE1 b
(a)
The widow!s age is assueed at 30 years (because of the
generatraith of the Agency employees) in both examples
to follow, i.e., widow is the only beneficiary in the
first case, and widow and 2 children in the ascend .
aiM 5 and 6 years.
(b) As to Ordinarr Life Insurance. There is assumed a policy
of $10000rface IONh double indemalAy for accidental. death.
The widow chooses to receive the proceeds immediately in
the form of a monthly lite income (20 years certain) in
both examples, Disposal of these proceeds is illustrated
by utilising option 4, under an Ordinary Life policy
written by United Benefit Life Insurance Co. of Omaha,
Nebraska. The benefit is $30.50 per month for the face
of policy, or $61.00 per month with the Double indemnity
feature,
(C)
1, The proceeds of this policy are not taxable as ince=
unless lett with the compote at intereat. Such interest
is taxable.
As to FEU, in the outtearr. tonere:1re here* the examples
shoal in the analysis heretofore are used.
1. The benefito here are not taxable as income.
(4) As to oak, it is seen that its value is small ? is of
Co coneideration in the case of death in performance of
duty, and is applicable under line.of.duty or not, te a
widoe alone only When she reaches.; SO years? To a widow
With children benefits are applicable immediately but
are snall.
(e)
Tae benefits here are taxable as ineome under the
annuity rule. (1%. of total salary deduction until tax
eqOals deduction, then all taxable.)
As to NAEPA in the term feature, it is assumed that the
employee chose proceeds disposal on the basis of monthly
installments payable irmadietely on his death far the 15-
year period. This pais $6.53 per month per $1,000 of
policy face ($122000 now), i.e., a total of $78036.
1. The proceeds here are not taxable as ineomeginthe
same wayedas Ordinary Life,
(f) As to WASPA, in the accidental death feature, which met
be paid in a lump sum ($15,000 now), it is stemmed that
the single beneficiary (wife only, age 30) is better
mewed by her purchase of a single premium Difezwed,
Approved For Release 2003/03/25_,? CIA-RDP59-00882R000100260002-8
SECRET
Applxvild For Release 2003/03/25 : CIA-RDP59-00882R000100260930-8
SECRET TAD B
Refunding Life Annuity payable in 20 years at her then
age of 50 years (or earlier for less amount if she
ch000es or needs). On this basis, Guardian Life of
N.T.C. will, in 20 years, accumulate a cash value
far her of $24,135 and then key her $94,13 monthly
for life and also refund the unused balance to her
specified beneficiaries.
However, under this feature* in respedt to the second
example (the employee's beneficiaries are wife and 2
children, ages 5 and 6) it is deemed the part of wise
dam. for her to use the ;rincipal as she :hoopoe under
a Trutt Fund arrangement, for a minimum of 12 years
(until the children are 18 years old). The trusts
now pay about 4% average on the investment and charge
5% an the fund earnings. This will net the beneficiary
additional earnings over 12 years of &poet 33,000 total*
or an average earning of about $250 par year. She takes
out 1125,00 per month average for 12 years and uses up
the princi
1. The proceeds under WAEPA accidental death feature
-arn not taxable as income* except as to interest
or aarnings,
(g) As to CSR (Civil Service Retirement Act) benefits,
even though the beneficiary can choose as between CSRA
? and FECA, there is really no competition between the
two. Each was designed for a different purpose.
Remover outside of performance of duty death* the sole
beneficiary (wider' oar) waits until she is 50 years of
age to benefit in a smell way under asm, The widow
with 2 children securer, somewhat larger, though :vise
tively mall, benefits inuediately following death,
under CSRA, Here again there's no ccopetitionwith FEU,
hence the great impartanee of interpretation as to *pore
forma= of duty." The two cases used in the analysis
proper are again utilited in the following summary,
1. The proceeds are taxable as income under the annuity
rule.
In respect to National 3ervice Life Insurance (veteran),
the 15eyear installment method of paying proceeds is
choosen m $6.11 monthly per $1000 of policy face. This
is $61.16 menth2y1
le Tnese preceeds are not taxable ev .,eacoms.
Approved For Release 2003/08/29:?1A-RDP59-00882R000100260002-8
SECRET
I I,
SECRE
Approved For Release 2003/03/25: CIA-RDP59-00882R00010Q26,000278..
SUMMAR EXIS70C AVA;A.A8LE PROvEC;VE ASSES iERMS OF NE PROFEOS - 01sPuuk, PJINS CI4OSEN
AMITHLT PAYNEWS)
IC IA RI
ASSET
ORwpowt HFE IftuRANCE IFACE)
?(9.1A.
FE CA
CSRA
(FRANKFURT)
PERFORMANCE OF DuiY
ORCiNARY,;.IFE tic8041 ORNAJAV 'Off.
30.50
30.50
,!4f OF. Wit
OR.
30_50
30.50
1, 14m-
?p4
NOT
W: moor ORD.
1:FC
222.75
WAFPA 16.1tm! 18.S6
WIFE " (ADEN1'AL DEATH)
OW.1 "OTAt. 362.11
CFRAroxfuRt)
TOTAL
PEI t
(FRANKFURT)
ORDAART LIFE !NSURANCE tFACE)
(0.6)
FFCA
(FRANKrunT)
Wt.FE AND CSRA
TWO ONMOREN VAEPA (Ttam)
" (ACCIDENTAL DEATH)
TOTAL
(FRANKFURT) -
HSU
TOTAL
(FRANKFURT)
Mit DEATH OUTSIDE OF ERFORMANCE OF DUTY
61.10
423.21
30.50
30.50
328.16
78.36
125.00
592.52
61.1.0
653,62
34.00}
34.001
(+ 34.00)
(4, 71.00)
(+ 71.00)
C. 71.00)
SiCRET
222.5
(+ 34.00)
78.36
301.11
(4 3i.00)
139.36
61.10
362.21
(f. 24.00)
61.10
200.46
30_50
30.50
328.16
(+ 71.00)
78.36
125.00
531,52
61.10
592.62
(* 71.00)
66,84
78.36
125.00
331.20
71.00)
392.30.
/8.36
.1v
ASSuMP ONSz
DEArti OF A CS-11 woT
5 von SERV$CE
BEtIFoSIART - Act 30
+ 33.42 AT AGE 50
94,43 AT Att 50
78.36 .127.55 AT *GE 50
61.10
139.46
66.84
78.36
125.00
270.20
331.30
+127,55 AT AGE 50
ImMEDIATELY AT DEATH
TRUST FM
Approved For Release 2003/03/
: CIA-RDP59- 0882R0001002
0002-8
4 Approved For Release 2003/03/25 : CIA-RDP59-00882R000100260002-8
Summary Analysis of Coded Omaha and
OHI Hospital and Surgical Claims
I* General
A. Cover e: The survey included 1129 Omaha claims and 1865 au
claims covering illnesses uhich commenced prior to 1954.
B. Illnesses: Types of illnesses for which claims had been submitted
have been categorized into thirteen (13) groupings, Codes and
definitions are included as Attachment 1*
C, Ratio of Claims to Poli Holders (193:. Comparing the claims for
nesses commencing in wi. t policies in force as of
31 May 1953, the following has been determined:
Insuror
Omaha
OHI
Omaha Claims
Calendar Yr 1953
Number of
Claims
Policies in Ratio of Claims
Z2E22-Y-21112 i22.211.27.191ta
239 1100 1 to 4.6
822 3800 1 to 4.6
A. Cover e: A total of 1129 Claims had been submitted through 1953,
restIting in 6665 days of hospitalization. Of the 1129 claims, 679
were for illnesses incurred in the United States and 450 claims
were for illnesses incurred outside the United States,
B. Actualeensed to Indennat: The actual expense to Omaha
ll-affeosaPiii?vached 113 more than the indemnity; pregnancy
claims cost the policy holder about 44.7 per cent more than the in-
demnity, while the indemnity for TB claims was about 10,9 per cent
more than the actual cost. (See page /0)
C, D a Hospitalized: Approximately 84.6 per cent of the Omaha claim-
an,s mere ospitalized leas than 10 days, with about 47.1 per cent
hospitalized less than 5 days, and 15.4 per cent were hospitalized
10 days or more. (See page 19)
D. e and Sex: Of the 1129 Omaha claims, 489 (or 43.3 per cent) were
or illnesses incurred by the policy holder, wives accounted for
485 (4300 per cent) of the claims, and daughters, sons and husbands
accounted for 155 claims or 13.7 per cent.
About 52 per cent of the claims were for illnesses incurred by females,
and 4709 per cent of the illnesses were for male personnel and 0,1 per
cent of the claims were of an undetermined see.
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A
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E. Acival Surgical Cost to Policy Holder: Of the 683 claims involving
sureCil costa to the policy holder, 91 policy holders (or 13.3 %)
paid less than $25,00? 192 policy holders (or 28,a%) paid less than
00.00, but 206 (or 30.2%) paid $150.00 or more.
F. Etxa Cost: Of the 871 policy holders paying "extra', 283 policy
o rs or 32.5%) paid $25.00. or less, 503 (or 57.8%) paid $50.00
or less and 34 policy holders (or 3.9%) Paid $151" or more.
III. GUI Claims
A. Coverage:A total of 1865 GRI claims had been submitted through
or 8651 hospitalized days, of which 8350 days (or 96.5%) were
cove;ed by benefits. The difference is accounted for by: overstaying
discharge hour (not allowed), overstaying Child's tonsilectomy (1 day
allowed), adult (2 days), overstaying naternity (8 days allowed).
B. Aetlal Expense Compared to 6plefity: DUA to insufficient OH1 data,
IT is impreaical to present any actual expense information compared
to benefits..
C.. Claims by Year of Illnesses: Of the 1865 CHI claims, 632 (33.9%) M-
r:Mutes commenced prior fo-1952, 431 (22.0%) illnesses commenced in
1952, and 822 (44.1%) illnesses commenced in 1953.
D. T e and Sex of Claimant: Of the 1865 claims, 505 claims or about
were byti policy holder, 747 claims or 40.1% were for the wife
of the policy- holder and 613 claims or 32.8% were for sons, daughters
and husbands.
Male claimants accounted for 729 claims (39,1%) of the illnesses, the
women Accounted for 1091 (58.5%) of the claims, and 45 (2.4%) were un-
determined,
E. Days Hospitalized: Of the 1865 claimants* 1705 or 91.4 per cent were
oapitalizecf less than 10 days and about 6.6 per cent (16)) were In
the hospital 10 days or more. (See section 1)
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Benefits:
(OMAHA)
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Glossary of Terms Used in Attached Analysis of Omaha and GRI
Hospital and Surgical Claims
Monies paid to policyholder members at the rate of 39,00 per day
for room and board regardless of room and board cost, and reimbur-
sements paid for dependency room and board. Reimbursements is the
term used for monies paid for dependency room and board at the
actual cost rate, if less than -;i9.00 per day; the maximum is 0.00
per day. This rate of :9.00 per day changed from ,4.00 per day
as of 1 September 1953.
Extra benefits changed as of 1 September 1953 from ,30.00
Gated) to a35.00 (unallocated)*
Claims
RETEacia: Table headings reading "Illnesses Commencing", means that the ill-
ness commenced prior to 1952, in 1952 or in 1953 as the case may be.
Surgical Cost:
(0......EE)_ Means the gross amount of money expended by the policy holder
to satisfy the surgical bill.
Percent of
Claim Covered
by Benefits:
..c2tsisa_. The ratio of benefits to the actual expenses.
-3-
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Apprc1 For Release 2003/03/25 : CIA-RDP59-00882R000100260008
Hospital and Surgical Codes
Zg2 Patinit JO!
ear, nose, and throat.
02 Genital and urinary?
Heart and cirvulatory.
Pragmuxqand couplications therafrom.
Cancer (including tumors etc.).
Tuberculosis and teats traerefor?
Accidents.
Other (including childhood diseases, bone
and muscular, hernia, surgery, etc.).
Digestive, from stomach on out.
Respiratory (including colds, pluerisys etc.).
Dermatology (including cysts, etc.).
Mental, nervous, brain, etc.
%defined.
=MN Et-ei
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App ov d For Release 2003/03/25 : CIA-RDP59-00882R00010026V1-8
OMANA CLAii Section
Summary of Claims by Type of Illness A
Illness qouencn Priqr. to 1952 Al
Illness qziencj in 1952 A2
Illness Commencing in 1953 A3
Per cent of Difference between Benefits and
Actual Cost
as 4mmencing Prior to 1952 B1
09mmencing in 1952 B2
Illness Commencing in 1953 B3
Geogiaphic Origin of Illness
-
Actual,$urgiCel Costs
Tble
Graph
-
Actual Extra Costs
Table
Graph
El.
Nteber of-Days Hospitalised
Table
Graph Ti
?
Type of Sex of'Claimant
GHI CLAD
Summary of Claims by Type of Illness
Illness Commencing Prior to 1952 Hi
Illness Commencing in 1952 H2
Illness Commencing in 1953 H3
Nye Hospitalized
Table
Graph Il
Type and Sex of Claimant
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Apprwl For Release 2003/03/25 : CIA-RDP59-00882R00010O260cl8
Actual Surgical Cost to Omaha Polcy Holders
(Based on 683 Incidences)
Selected Groupings
Lail=r Cent
Total
Less than $25
$25 Vara $49
683
91
101
100.0
13?3
14., 8
13,3
21,1
$50 thru $74
99
14,5
$75 thru $99
72
10.5
Si 1
$100 thru $124
81
11-9
65 0
$125 thru $149
33
4.8
69 8
$150 thru $174
02
12,0
81 8
$175 thru $199
29
4-2
86_1
$200 thru $224
45
6,6
92,7
$225 thru $249
6
0,9
03.6
$250 thru $274
20
29
96,
$275 thru $299
8
?7,2
$300 and Over
19 (a)
2,8
100.,0
(a) Distribution:
$300-4
$335----1
$349----1
$350----5
$375----1
$400----3
$500-2
$550-1.
$650---z1
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Apprvil For Release 2003/03/25 : CIA-RDP59-00882R00010026048
ACTUAL SURGICAL COST TO 014ABA POLICY HoaaRs
(Based on 683 Incidences)
Selected Groupings
Lass than $25
p.
'
/ ?
$25 thru $49
$50 thru $74
yi
mplamonsmoornmad
$75 tbru $99
$100 thra$1211
$125 thru $149
$150 and Over
10 15 20 25 30 35
PERCENT
45
55 60
4150 and Over
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HOSPITAL EXTRAS PAID
UNDER OMAHA CONTRACT
Extras Incidence
(Based on 871
2r222_. fiNAIME
BY POLIO! HOLDER
Claims)
r2E-21.d.
100.0
Cumulative
Ratio
Total
-1471
$25 and less
283
32.5
32.5
$26 thru $50
220
25.3
57.8
$51 thru $75
162
18.6
76.4
$76 thru $100
96
11.0
87.4
$101 thru $125
55
6.3
93.7
$126 thru $150
21
2.4
96.1
$151 and over
34 (a)
3.9
100.0
(a) Distributions
$151 thru $175
13
$176 thru 4200
5
$201 thru $225
5
$226 thru $250
2
$251 thru $275
3
$276 thru $300
2
$301 thru 025
2
1326 thru $350
1
$668 only
1
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HOSPITAL EXTRAS
PAID BY OMAHA POLICY HOLDERS
(Based on P71 Extra Incidences)
(Selected Groupings)
$25 and Less
$26 thru $50
$51 thru $75
$76 thru $100
$101 thru $125
$126 thru $150
0
4151 and Over
5
10
20
Policy Holders paying
$100 or less for
Extras -
30 35
PERCEKT
45 50 55 60
Approved For Release 200
Policy Holders paying
-RD1359-0-018/16i01)602110600f-o8r Extras
Apprpd For Release 2003/03/25 : CIA-RDP59-00882R000100260a-8
Number of Days Omaha Claimants NOspitalized
per Cent
Cumulative
Ratio
Total
2.222
;00.0
XXII
Less than 5
532
47.1
47.1
5 - 9
423
37.5
84.6
10 - 14
116
10.3
94.9
15 - 19
21
1.9
96.8
20 - 24
7
0.6
97.4
25 - 29
8
0.7
98.1
30 apLliy_er22L2
100.0
Ave. no of days
7.5
XXX
XXXI
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OMAHA CLAIMANTS
NUMBER OF HOSPITALIZED DAYS
(Selected Groupings)
7:07/77,,F,37,7
- 29
30 and Over
- 114
5 10 iS 20 25 30
PERCENT
Hospitalised less than
. .
10 days
er.a.
35
5 9
140 145
55 60
Approved For Release 200
Int RAP)
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Summary of Omaha Hospital and Surgical Claims
Through 1953
By Type of Claimant
TOTAL
1122
loo_o%
Policy Holder
hAL
ALI
Others
41112
.10.&2,
Wife
485
43.0
Daughter
52
4.6
Son
102
9.0
Husband
3.
0.1
By Sex of Claimant
Total 112.2_ =LA
Adults
Male
489
43.3
Female
485
43.0
Children
11,6
Male
52
Female
102
9.0
Undetermined
0 1
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GUI CLAIMANTS
MEM OF HOSPITALIZED DAYS
(Selected Groupings)
/ /137#
///7/////
10 -lii
- 19
20 - 214
- 29
30 and Over
0
10
15
'Hospitalized less than
10 days -
m arm
20 25 30
PERCENT
/Less/than
Days
5 - 9
35 140 45 50 55 60
- Hospitalized 10 days
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Apia loved For Release 2003/03/25 : CIA-RDP59-00882R000100260002-8
10 Existint available protective measures as to disability,'
a* A ainst Permanent and Total-DitaLSE:
(1) -Individualvs own commercial Ordinary Life policy which may hays
a disability feature contained for an extra premium. or a
. straight commercial disability
(2) National Service Life Insurance or U. S. Government Life Insur.
anco which may have a disability feature added for an extra
preminm.
(3) Federal Employees Compensation Act.
(4) Civil Service Retirement Act,
b. Each of the above measures or instramats is analyzed herewith:
(1) individialos own commercial policies
(a)
A typical Ordinary Life policy with dinability-.(and
premium waiver) inclusion is that of Guardian Life of
New Yorks No Yo
1. For an annual promiut of 0.63 at ago 35, Guardian.
will pay 010.00 per month per 014000 of policy face.
amount.
2. Exrlusions are self-inflicted injury's military service
in time of war and air flight except on ccomercia/
scheduled air lines,
1b A typical cora-awe/al straight disability policy is that
-written by latual Benefit Health and Acoidaut Association
of Omahas Nebraska,
1. The benefit from an aocident:
$100.00 per month for life
(40.00 " " " partial disability for 3 acs,)
Tho benefit frail sickness:
$100.00 per month for life
(50000 " ." partial disability for 3 mos.)
The premiumA: 00.00 per year to a preferred white
collar risk0.
TAB D
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$40000 if benefits start on the 8th day
35.0o r* n 0 0 016th n
32.50 " n II n " 31St n
3040 " ? n " " " 63.St n
27050 n ." " " " 91st "
Ito The above benefits can be purchased in multiples
of $50.00 with proportionate difference in pre-
miums?
The policy is issued annually so that the Company
May refuse renewal if initial benefit-days
provision is abused*
6. Until 6 months ego, air flight in nondieoheduled
service was excluded. Now it is irianded for an
additional annual premium of $3.00 per $100.00
benefit.
(2) National Service Life Insurance or U? So Government Life
Ineuranee
(a)
(b)
This legislation permits the World War II GoIo, on
return to inactive duty; to purchase life insurance in
one of seven different policies to which he may add
dipability coverage for an extra praPinm. Exmaplet
Term life policy of $10,000 face-amount at age 35
can add a. disability feature paying benefit of $50.00
per month for an annual additional premium of $314.400
U. S. Government Life Insurance before World War I/
permitted a veteran to keep a policy containing dis-
ability provisions and add more if he chose for
additional premium. Sudh a policy is no longer
available.
(3) FederalbTloyees Compensation Act.
(a) The Federal Employees Compensation Act provides cOmpensa
tion for disability (and full medical care) resulting from
injuries suffered in performance of duty or from diseases
proximately caused by emiloyment, for as long as the
disabilneetinuo
lo This Act -is an exclusive remedy, but does not pre-
vent the beneficiary from electing to receive the
benefits of the Civil Service Retirement Act if
he so desires but he cannot receive such benefits
' concurrently .with theee under FAO
012=
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2. All hazardous or semi-hazardous duty risks are
covered.
Sxclusions are disabilities resulting from will-
ful misconduct* self-inflicted action, or intoxica.
time
4. The monthly schedule of benefits aret
a. To individual with no dependents: 66-2/3% of
salary* loss not to exceed $525.00 monthly
This maximum benefit of 025.00 provides a
benefit of 66-2/3% up to the maximum salary of
GS.13? 58% of maximum salary of 0S.14 and 53%
of maximum salary of GS-.15.
b. To individual with one or more dependentss
75% of salary* loss on salary up to $5010
annually) 66.2/3% of salary* loss on salary
above $5000 The total benefit not to exceed
$525600 per month (this maximum is an annual
salary rate of $6300 - about the middle of the
03.11 scale).
c. In either case above, plus varying specific
?weber of weeks of compensation 470 66.2/3% of
the salary rate, for permanent anatomical
losses.
d. In either case above, plus $75.00 per month,
if an attendant is required, plus $50000 per
month for rehabilitation training if needed.
5. Clear4, this is excellent coverage in the performance
of duty area.
Civil Service Retirement Act
( a )
The Civil Service Retirement Act provides disability benefits
to employees of the U. S. Government with and without perfor-
mance or, line of dtty qualification, provided the employee
has acquired minimum eligibility of 5 years of civilian
* Salary rate includes ameunts withheld for tax and retirement purposes
plus value of subsistence quarters, etc.
m3.
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25 1 C4E
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service,* Fuld iS totally disablecL
le Exclusions are npries or disease due to Iricioue
habits, willful misconduct or intemperance*
The benefit is based on base salary and length of
service* This latter factor, of coarse, automatically
describes the nature of the plan and hence, for an
agency made up so heavily of youth, we find but small
compensatory contribution. This is illustrated as
fellows:
Righest ay. 5 yr. salary
Civilian creditable service
Military service
Min,
8360.00
12 years
2 years
8360000
421:4951,
x -14
3i55.60 manually
146030 month3,y
os-9
$5060.00
5 loam
3 years
5060000
X 105%
75090
6
6O7 20
50,60
ainst, nporary Disability
(1) Federal Employees Compensation Lot
(2) Public ism no
(3) The group hospitalization and surgical. an administered under
Government Employees Health Association"' CIA), underwritten by
Mutual Benefit Health and Accident Association of Creab.a$ Nebraska
(hereinafter designated OMAHA)*
(4)
The gronp hospitalization and surgical plan S. ch7.nistared under
Government Employees Health Association" (CIA), underwritten
by Oroup Bospitalization Inc., (hereinafter designated GH1)*
* Under 5 years of civilian service .or more than 5 years with no widow
? or dependent 'children, the Act provideS for a lump sum of the mount
paid in, plus interest*
** Government Employees Health Association* This is an incorporated associa-
tion, within CIA, with officers elected annually by its Board of Directors,
organized in August 1946 for the turpose of administering a hospitalization
?mh euraical benefit plan underwri?tten by Mutual Benefit Health and Accident
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.4, TAB D
Apprcol For Release 2003/03/25 : CIA-RDP59-00882R000100260002 8
d. Each of the above measurea is analyzed herewith:
(1) Federal Empleyees Compensation Act (see b. (3) above)
(2)
Public Law 110
(a) This act provides substantial disability benefits to
employees of the Agency assigned to permanentdutir
stations outside the Continental U. 8,* its territories,
and possessions; for injuries or illness requiring
hospitalization and which occur in line of dutb
Exclusions are injuries or illness resulting from
vicious habits* misconduct* or intemperance,
a. Also, as shown above* Tni (refer to recommendaticas
of the Legislative Task Force).
The benefits are:
a. Payment of travel expenses to and from ma appro.
priate hospital or clinic (including an attendant*
if necessary),
b. Payment of the cost of treatment.
(3) and (4) OMAHA and OBI hospitalization and Surgical plans
(a)
There are two hospitalization and surgical plant available
to Staff Employees and Staff Agent:: (only) under procedures
which are designed to protect security, Both plans pay sub.
'Untie' benefits to help meet hospital and surgical expenses
arising out of injuries and illness,
(b) The first plan made available to employees ( in August 1948)
is OMAHA.' It presents a straight indemnification arrange.
ment* i.e.* explicit cash reimbursement,
(c) The 2nd plan* made available in Mama: 1953, is GHI. This
plan is one of 80 Blue Cross plans in the U..S, and Canada*
which hnve Inter.PInn service (reciprocal) Benefit Agree-
ments with 4500 participating hospitals. If the admitting
hospital is accredited but not participating in the Inter-
Plan Agreement* cash allowances are provided. CHI is
pertiaily a benefit and partially an indemnificaticn
arrangement.
(d) Omaha coMbines in one contract specific surgical benefits
within the Hospital Service Plan, Gftl.separates the
D
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Appr For Release 2003/03/25 : CIA-RDP59-00882R000100260043
Hospital Service Plan from the Surgical Sw...vico Plans,
and for separate, fees the individual buys one or both.
Both.CivIAHA and Gal provide coverage for the family for
differing fees. The same benefits are extended to the
family as to the individual contracting if so con-
tracted..
Both =HA and CZ exclude coverage for injuries or
illness arising out of or in the course of employments
i. so, where FECA coverage obtains.
) Each plan is analyzed and cmapared herewith, separately
as to overseas and domestic situation.
TAB D
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Approved For Release 2003/03/25 : CIA-RDP59-00882R000100260002-8
1
? MARA
OVERSEAS
Hospitalization
1. Hosp. Hoard& Rooms $9 per day for 31 days
with no limit on frequency, plus
$135 for hospital extras
20 Plus surgical.as shown below.
3* Plus outpatient emergency up to ..... ,.$135
40 Effective date3 let of the next month
5. Waiting period. Maternity only (see below).
6. Materni . Waiting period 9 months and coverage
e ed 9 months beyond term of contract.
(a) $9.00 per day for 14 days
plus up to $45 total for Hosp. extras.
MOUS
Hospitalization
1* Hosp. Board& Rooms $10 per day for 21
days with 90 day interval on frequency,
plus
$64 for hospital extras
2. Plus surgical as shown below.
3. Plus out-patient emergency up to 00.0$ 10
4.0 Effective date. 1st of the next month.
S. Waiting period. See *1 below.
6. Maternity*el Whiting period - none**1 No
extension beyond term of contract.
(a) $9.00 per day for 8 days
except Caesarean, termination of
Isotopic pregnancy and miscarriage,
for which hospitalization benefits
are 1. above
*1 As of 5 Feb 1954 011X eliminated all waiting
periods for members cumently insured and
for E0Dts who accept CHI Within the let
60 days of employment. These waiting per
iods were: Pre.exiSting conditions - 1 yr.
Maternity, tonsillectomy, adenoidectomy
10 months,
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TAB D
Approved For Release 2003/03/25 : CIA-RDP59-00882R000100260002-8
CAA
(Example)
$ 500.00Hernia Ing. uni1.0.0000$ 100
75.... " " Mint.... 140
100...Appendectow ? ? .000.00 ? . 100
1000...Radical Mastectomy.0.00 175
500...Fracture of spine.o...0 125
GB' Surgical
31235 $ 77
"1r
$2055
c $ 128
35.00.Hip dislocation..,...
75
This is 60% of 0HI
150....Prostatectomy... ...... 0
200
50....Normal delivery...0060.
80
100.000Csesarean0.0..0 .......
150
1500.00Removal of Kidney....,.
175
11.130 Below the 5th step
50.... " " Cataract.-...
150
increase of a G8-9
100...00astrictagy,
250
and including the
250.00Tonsil1ectomy
55
minimum of 0S-10,
25....Adenoidectomy
55
the surgical fees
25,..Hemorrhaidectomy......0
60
scheduled are ao-
150....Rysterectomj.... ......
165
cepted by the par-
M15 0055-
ticipating surgeon
as fail payment.
(The above, of course, disregards frequency of
0100
0000
040.10 110001
occurrence - is set forth as a quick look.)
$1.60 Individual contract.00000000,...0.
4.75 Individual & Spouse contract...,,
6000 Indiv. & spouse D.: children....00.0
.8..
Costs (monthly)
gRgE0 Surgical Total
107D. la00 2.70
3070 3.20 6.90
3.70 3.20 6.90
TAB D
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Approved For Release 2003/03/25 : CIA-RDP59-00882R000100260002-8
WASHINGTON
plAHA gasattltEt151-
1 Hosp. Board& Rooms. $9000 Per dei
for 31 daya-with no limit on frequency
Vius$33511eX. for hospital extras
2. Plus surgical as shown above
30 Plus cutpatient emergency up to
Examples (Hospitalization only):
Bd & Rom
$ 90
270
126 (Plus a maxima of $135
90 (to clover al3. hospital
126 (extras
90
27
_$135
WASHINGTON
HagatlAES9.21
LG Hosp. Complete Service for 21 days (semi-pri-
vate, partio. hospital) with 90 days Interval
on frequency. $10.00 per day if in private
room.
Plus $5 per day for additional 180 days
(See below)
2. Plus surgical as shown above
30 This out-patient emergency up to
40 Examples (Hospitalization only):
Normal
appendeotagr 20 days
comp. fracture 30 "
bilat. hernia 14 "
unilat. " 10 n
braterectany114
hemorrhoidectagr 10
tonsillectomy 3
Bd. & Room *1 (diff.)
$ 135 GI 45)
405 (/135)
189 GI 63)
135 (/ 45)
189 (I 63)
135 (1 45)
40 (/ 13)
Plus the hospital extras,
(16 listed) which range
from $50 for the simplest,
uncomplicated appendectomy
to very substantial
amounts for the serious
or complicated case.
Net 50% greater on Board& Roan than OMAHA
*1 - Basic coats of Board. & Roam @ $13.50 per day
(typical - presently) is absorbed by GHI
completely.
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? (f) Summary comparison of these two plans:
1. Overseas general hospitalization
(MARA is far superior toIft
ho
Overseas materni hos italization
s us aysu or ? OHI in normal preg-
nancy. In thecases involving Caesarean, termination
of ectopic pregnancy and miscarriage (ay. 10%, per
I. Tietjen), OBI is substantially superior.
Overseas surgical.
NAHA is only 60% as good as GHI.**
12.91.aituesticl.eriera14.!Oica
GtABIL to OHI in either a normal
or it:normal case.
Domestic maternity hospitalization
*AIM is sUbstaniially superior L?H' in normal preg-
nancy. In 10% of the cases involving Caes;;E:teraina-
tion of ectopic pregnancy and miscarriage, GH/ is
substantially superior.
Domestic surgical
WA is only 60X as good as Mao**
Fees are the same in each plan as between overseas and
domestic. However, OMAHAts fees are all lower than OHIO'
For individua3?contract ONAHA:charges_60% of CHI; for
individual and spouse OMAHA charges 70% of OHI; for - -
individual, sparse and children OMAHA char-gait SS% of OHIs
but OHI &menet offer just an -individual and spouse con-
tract at a lower rate than one inclusive of children.
Net on the above - if OMAHAts surgical could meet dal
it is better than CHI for overseas if the dependents
are with the employee. Even if OMAHAts surgical meets
OKI, it is not as -good a buy for domestic assignment.
** OKAHA has offered to match OHI surgical benefits with small increase
in premium an followsr single contracts phis $.161 individual and
spouse, plus $.89; family, plus $0800 See Appendix XI.
TABD
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As to hospitalization, the two plans are strictly comparable
in respect to an overseas location of the individual with
fetidly, but impossible of comparison in the domestic
situation. This is because the GM hospitalization bene-
fit is buried under the completely untranslatable "full
Berrie? benefits" with participating hospitals.
While the nan.complicated case call for a minimal few
hospital extras, the complicated case undkir MI gets
16 of them free and as many times as necessnry. These
variables cannot be assessed dollar-wise for purpose of
comparison with MARL
Even though it is true that the seriously complicated
case is statistically in the low frequency category, the
great dollar benefits under CHI are nevertheless there
for the individual who wants to insure against precisely
such a risk.
It may be held that benefits in a serious case ride on
the backs of the nen..complicated majority in respect to
fees, and also that throwing in "the worka" for every
member is misleading persuasion. However, the minority
who do get caught in heavy extras can't pay with
statistics,
The simplest and blandest appendectomy calls for about
$50.00 in hospitalization extras. From there it could
.go anywhere in cost while the patient still lives.
Ito Pregnancy hospitalization contains- the.. ears prOblem
but not as seriously so, In 90% of pregnancy eases -
the normal. ones a. OMAHA is a better buy, but not so
if one wishes to insure against costs arising out (if
the minority of cases (i.e. Caesarean section, ter-
mination of ectopic pregnancy or miscarriage). Here
MI is superior.
Again in the domestic hospitalization field GM
adds a fillip for the unusual ease and offers $5.00
per day for 180 days on top of the 21 bell- service
benefit' days. Strictly from the point of view of
frequency Statistics, this 'might be labeled a
"come-on".
c. Also, in the cal brochure is seen 'UV) same hand as
immediately above, i.e., the illustrated cases are not
the usuel. ones. They are in the real tiiuly infrequet-7
category, but because there are burlaretrof them, the
coloration seems to be present. Theze cases are cancer
BD
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25X1A9A
(1449.15 benefits), fractured vertebrae (337.'5
benefits) and gall stones (518.90 benefits).
OHI requires a 90 day internal between dischargo.
and re-entry to a hospital. OMAHA requires one day.
Hera an it inconsistant with the.:preceding tactic&
as to minority occurrences,
OMAHAvs fee schedule is superior both in form and
in dollars.
OHX, being so firmly enmeshed in legislatien and to
integrated with the large and necessarily unwieldy
Blue Cross presents practically no possibility of
modification in plan to suit u8; whereas OMAHA is
completely flexible . even to a tailored plan?
CMAHAvs service to us in the settlement of Claims
is 'vastly better" than CHI,
Mr.r-----lcharacterizet OH! asa "bickering,.
negotiating outfit,"
10; "Fine Print"
Comparison of these two plans is important alSo because
of the effect of small items in irritation and dollars.
Ambulance
OHI wont pay to and from a hospital; Cmaha
XeRays
CHI won't pay unless the X-Ray is in connection with
eurgery performed within three daysv time. (aha will
pay with no surgery nor time restriction,
Hospital Extras
OHI will pay on certain specific hospital extras
'without limit, Omaha pays On all eXtrE12 up to their
established maxiMum of $135,00
Type of Hospital
IIs reimbursement is dependent t? type of
hospital, as follows:
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?0
Participating hospital - full benefit; Med:her,
hospital of another hospital service plan seta the
prevailing service of that plan; non-partieipating
hospital gee only up to $10.00. per day for 21 days,
plus $64000 for hospital extras (the same as the OH1
eVersees rate). Omaha on the othet_hapd,reiMOursee
the same all over the world In any hospital of the
individdiles own choice.
Room and Board
The "full service benefit days" under OBI pertains
to a semi-private rooms but if the individual choopep
or really needs a private room, GNI allocates only
$10.00 per day. Omaha on the other hand pays the
contract guarantee for any acoommodetiono
Dependent Children
Under CHI, they are added when 90 days old, and carried
to the 18th birthday.. Under Omahas they are added
when 14 days old and carried to the 19th birthdayp
This may well be important in connectien with con-
genital anomalies.
Tuberculosis and Mental or Nervous Disorders
Under. GRI, these are covered for only 10 ,days during
any 127month period.; Under Omaha, they are covered
for the flame number of days and sena frequency (one
day break only) as all other accidents or illnesses.
Congenitel Anomalies.
Under GHI, not covered at all. Under Omaha, full
coverage at any age after 14 days from births
Outpatient Emergency First Aid
OH/ requires reporting within two hours of accident,
else they won't pay. Omaha allows 24 hoUrse
TAB D
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AY,i$
A PPE= MS
SECRE T
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APPENDIX *III
WAR AGEMCIES EMPIAltES
PROTECTIVE ASSOCIAITON
? Rem 101:0401:3 Washington
15th & New York Ave.,
Washington 5, D. Cr
S5 .4artat
November 29, 190
The Central Intelligence Agency
Gentlemen:
Yee have inquired about the definition a
bility relating to the term ?employee.? The questica is
raised, we believe, because there are certain personae'
connected with ycur agency ?idlich do not ()leer throw% the
normal procedures of Government ezvloyment, I am tharefore
quoting an excerpt .fro m an amendment to War Agencies
EmPloyeest Protective Aseociation contract No. 7671, dated
July 210 1949, as follows:
'The term templates, as used herein shall mean
an individual whose compensation or expenses are derited
in whole or in part directly from the United States
Goverment for aerrioas performed directly far the Maited
States Government in any eapeoity."
We believe this definition ie broad enough to
cover all of the questions which you have posed to us.
Very truly yours,
STACEY Ki BEE
General Manager
8KB/es
0
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SECOT
APPENDIX 1V
The attribution factor to the U. & Government with death in a
sensitive mission
(1) Regardless of W.AZ.P.A.Ansurance. the individual's rights
as =employee of the D. S. Government cannot be denied and contri-
bute direct attribution to his employer. (fECA)
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LZZ
alarm: '4'
DE2IIIM2I: By 0/A regulation (CFAs) Section 14) the following tour
categoriee of employment ere a lpgea of the U. S. Governmenk, end no
employee rights as epecified n.ejiThticn can be donied them,
1. Staff Exployees
2. Staff Agents
30 Career Agente
4. Contract Ekoloyeee
The Contract Agent ia not an employee unlace control of his
activittes is alose and c.ntinons in which case be mit be
able to prove qualificatiou
In respect to Career Agen4..s CA 14.7 deductions from salary
are made tar Civil Servict Retirement Act and ...the Career
Acent 0....nwill automatically come under the coverage of
OEM and PL 110# BenetitE, of the Ilseing Fersons Act mgy
also be granted, and where compatible with security and
opmmationa% standard% oceer agents may subscribe) if eligi-
ble) to hospitalisation and life immense plans which are
available to Agency employss.* * 3.
In resrect te thr, Contrae, Employees:OFR ILA - no deduetione
will be srade from amIcIrlawlvr the Civil Service Retirement
Act.aghowevera Psuah periods at Service would bib available as
creditable sot-vies :or teirement purposes on deposit by
the individual of a sum ?canning the deductions baSed upon.
ealary paid during that pvriod,n Alto).(tbz Contract Employ-
ee) "will be entitled to ',he benefits of 1CA and PL 110,i
and hie contract shall so state Benefit& af the Aliseing Per-
sona Act rAr also be grantal&-sralp Where campatible with security
and operational otandarde the Contract Employce may subscribe)
it eligible to hospitalization and life insurance plans which
are airailable to Agency e7ployeesm API
*1 Per COPS 0. DB/PJanuary (54) all toar.catogeries eligible for life
insurance; only Staff Employatta A.v1 Staff Agotta eligible for Avner
hospitalization.
St;Cith T
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25X1X1
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C
25X1A9A
Deputy Chioi?
41 2
SSMET
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25X1A9A
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Aid
APP1DIZIX
October' 1953
Miscellaneous Expressions of Interest in Insurance from Random
Selection of DD/P Officers
1. Good hospital and surgieal benefits plans for owereeae
dependents - this inclusive of proprietary companies. '
25X1A9A
'AEPA basic limits of group insurance coverage.
to cover transportation risks_zer se . all kinds.
insurance geoup operated by Agency similar
to that of Army and Navy ? would be best as farl
go re I
5. inveetigate Blue Cross, believes offers mare coverage over
seas than compaey we now subscribe to.
6. Something to coverhasardous duty. (Ha never heard of FECA)
7* Protection fer injury or death in line of duty which would
provide living expense for family in the states.
8. Something similar to Trip Insurance obtainable at Airport -
at reasonable rate; would be beeefit to have included in regular.
processing routine, sometime forget to pick up at Airport . method
to be as simple as possible.
9. Accidental death and injury in line of duty.
10. Health, physical, mentae and injury coverage overseas other
than in line of duty ? CIA unlike the State Department does not
cover employees for illness or inNry incurred other than in line of
duty.
11. Travel insurance, short term.
12. Transportation insurance e employees should not have to
afford this*
130 Re TaErPA . Tao high for
Poilou-up on return, for possible
also cover pr sl who do not
marir forms be' . filled out.
25X1C4A
short period; too long minimum period.
interest in keeping WASPA. Have WAEPA
aticipate travel. MAEPA requires too
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AP2E-Aa.
PROCEDURE AND SOW:111.4 IN OBTAINING
OV. AND OTHER DEATH AND DISABILIT1 FIGUeee
,
The method of areiviag at the GIA figures is noted 'or the record
as follows:
With respect to death, a clerecal task force (lee to 4 people)
supervised fulletime ley a borrower. intelligence offecer from PP
5X A9A I I examined every card in tee Inactive Servios Record Gard file,
to spot postings of "termination LI' death". The naila of each person
so terminated was noted on an inveetory sheet (dampo, attached) to.
gather with other personal data sheen as called for by the ievemborv
sheet. (Data called for Was specieledbyl 25k1A5A1-
Cause and place of death . not shceing here, was eeeeet in the indivie
dual's personnel folder (where for the most part it didn't show either).
Search then. went to the offices eel division, The inventory sheets
were all completecl.
In respect to the statistics en death, in one Lawn case the
personnel file (the card file of personnel actions) seowed no card at
all for the emplcame. (This was t 1953 death). In another instance,
the card showed "resignation". Tithe, of course, raiees the question
of other possible missing or mis.leading cards, most appecially far
the earlier years. In another case the clerical taxic torce missed
the record entirely because the noation of terminetioa by death Ahmed
on A Second attached card underneaeh the first, in tpito of planer of
posting room remaining.. an the uppee card. Of cource tee task force
could have missed for other reason e too.
As to disability, the same taek force and supeeviece examined
all records of hcepitalisation and magical instanees as shown in
the Omaha and GUI files of the Inenrance Branch of that Persomel
Oates.- , Desired information as ca led for on a dietellity inventory
sheet was posted Opecificaeions oe this sheet obtained from Nr.
e each case to a separate sheet. (Sample eteached) Then
these shoots uero coded for ISM.
5X1 A5A1
25X1 A9A
All of this disability work wee under the ganeral supervision
of I IChief? Research Beench, Plans, Revearch Development
Staff, Personnel Office.
With respect to Staff Agents, the records were oot ep propeller
in February 1953. Previous to thae? for a little ties at least, on
the occasion of death, al is9 supposed to
have'beennwee and sent to the Inaotive Service Receed file. Of four
knoWn Staff Agent deaths, oney one such card was found. Then, at
another eime, the Service Record Gerd held by the Peeeoenel Office
responsible for its original createon? wan sent with the individual's
personnel folder to archives, hence is buried with thousands ef others,
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who are inactiv%1 Inv ctaues,
For the years desired, 1947-1
dependenoellad to be placed on -mem
sUbstantiatsC Th c; Agency, Sastatt,
of DD/P were ciraulcrited. and h-
In adation, the action tile ,
mission, was checked. This procs
sonnelte Inactive Service file but
:53 inclusive
Four mean.
Cffice, rediGcl
.::ought forward
x Fiscal, to th:
produoed tan
iucluied two
? In addition, ?ersonntl$s Inac-Uve Service file
chocked through again. Sixty-zeve;. rzlcords of tiLaI
against the original sixty-two, bu this included (g
sines the first efgart. One new n;Ame was turned
moss missed four names caught orin:Lnally!) This
5X1A9A vized perso1a237 by
'The employees? persoLmel fol&rs are in gener0
filled vdth dupli=te papers, some%-aet inconsisten
material, and incomplete as to-cauae and place of (lc
the information az to cause and pl.w3 of death had 1
individual memories or records witin the operatini;
memries were accepted because in Gatia case an inr.41
who Could assert with complete con4dence of acoura
of cryptopyms in those taw cases vLare neceteary,
1.#7 the *termination by death!' rec%ixd on FarmO C_:
and place. (This has been info 1y agreed to by
Section).
-2.
pct to death),
ilas from COO were
aice and Dions
113W 1'1=88 0
livil Service Com-
names than Per*,
;lass.
Als thoroughly
valso
turned Up
rsd*
;but tis pro-
41ck wes super-
-AT poor shape,
arrangement of
In many cases
obtained frau
.:.:w4hsts. Such
tau fouud
?. With duo use
is no reason
t show =WO
.v.sonnal Relations
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Sources of Figures for CIA, Dept. of Agriculture
and Department of State
CIA Average Monthly strengthite the year. This method was specified
30 DeceMber 1953. Ihe figures
25X1A5A1 ears rrom =search. Branch, Plans; Research and Development Staff,
Personnel Office.
In respect to the CIA strength reports, one can take the years
1951, 1952 and 1953, as solid and correct. For tho earlier yearn shown,
there is unquestionably seme..prebably seall--variation as to that is
included and what not and when. All figures owe from official reports.
21111 . Theme figures are fron Howard.EWce Chief of the Placement
and Germ. Development Branch, Personnel Operations Divisions Office
of Personnel, Doperthent of State.
. The population or steeneTUI figures for the Foreign Service are
averaged for the year /4e= monthly figures except for 1949 e which year
:ie 4 "budget average." The Departeental yearly averages are also
get averages" except 1953 which is averaged from mostielypostings,
Aricult . These figures are from Mr. J. M. Keepers Secretary
asurer of the Department of Aericulture Beneficial Association,
The "strength" is total membership as of 15 September of each year.
("Deaths" include 10-12 cases of permanent and total disability which
Kemper estimates is correct for the total in these 5 years and also
include methership and deaths of retirees who kept their policies.)
T. Roy "bid, Personnel Director of the papartasento estimptos that
Agriculture has about 56,000 employees . thus making Kempervs member.
Ship 29% of the total eligible groep.Thie fact, plus inclusion of ree
times, plus the unchanging yearly level of meeberehipseleadseto the
suspicion, that the age level of this _membership is high. (Kemper was
uncooperative when asked if he could supply age data,)
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Re Deaths (Staff Employees)
NamSex
Data of Employment
Last Office ntle
Last Assignment (nature)
When so assigned How many others so assigned
Date of birth
Date of death
Place of death (country)
.11?14111101110?SYMMI1001.0.1?011100
Cause or death
ot001.4101611*
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POLICY NO.
CMi NO.
VaraM NO.
Het HospitaLi.sati,m tit Surgical (Staff 1o7eer & S.A.os)
Name
Assigtuont (affica)
Date of Birth
Nature of Moss
gonswerer
Sex
Place of Illness
Period of Muses
Benefits Paid By
Hospital
Surgical
Maras
ounia7)
WRA1.01.-SIESiaro
?91.111.111WWW22.111.1101,111111.1.614.1111116.1a.aaarimpriv
New
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SEGRST
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Appendix XI
Jarilary 1954
MENORAND AMR: Mv.a:bers of the Inslance Task FCWDO
25X1A9A
SUBJECT t.Explaratary disoussion pith represents:time from ONATIA on
114 January 19#14 by
14 In, regard to dMARA's matching GUI surgical bensilts, the
metier,' stated thet their-premium rates mtuld Change as follogs:
VSS.
Single Contract
;$1.60
31.76
6.16
Individual and Sponse
4.75
5064
.B9
Fami3y
6,00
MO
BO
to Please note that the increase in the family rate is less than
that for an irdividual and spouse. This is due to the fact that previous
rates were incorrect, and the actuary wiped out the inconsistenoy in pro.
pawing us the it rates.
3. In regard to CUAllAts complete matching of GM, they reed cer-
taind*pe .-..t flaures for overseas, now in process of preparation by
lesearch Br-,.., PDS. This information will be given in percentages
only (apprmmi by the Director of Secwitypersonany.)
25X1A9A
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Approved EcepattE9SM/M3Mc
Dr. George Baehr, Medical Director of the
Health Insurance Plan of Greater New
York, Testifies Before the House Inter-
state and Foreign Conunerce Committee
EXTENSION OF REMARKS
OP
HON. CHARLES A. WOLVERTON
OF NEW JERSEY
IN THE HOUSE OF REPRESENTATIVES
Thursday, January 14, 1954
Mr. WOLVERTON. Mr. Speaker, the
testimony of Dr. George Baehr before the
Committee on Interstate and Foreign
Commerce at its hearing to develop a
health program is very important. Dr.
Baehr was chief of medical service and
director of clinical research at Mt. Sinai
Hospital in New York City. He was
chairman of the technical advisory com-
mittee, Department of Health, New York
City, 1933-41, and consultant, Depart-
ment of Hospitals, New York City, 1933-
45. He has been a member of the pub-
lic health council of the State of New
York since 1935 and is past president of
the New York Academy of Medicine.
Dr. Baehr made the following state-
ment on prepaid medical care plans and
the health-insurance plan of Greater
New York:
TEST/MONY PRESENTED BEFORE ROUSE COM-
MITTEE ON INTERSTATE AND FOREIGN COM-
MERCE ON JANUARY 14, 1954, BY GEORGE
BAEHER, M. D., PRESIDENT AND MEDICAL DI-
RECTOR, HEALTH INSURANCE PLAN OF
GREATER NEW YORE
In all considerations of health insurance,
the basic and interrelated issues are (1)
the method of providing medical services to
the insured, (2) the scope and quality of the
services, and (3) the method of payment to
physicians.
LIMITED COVERAGE BY MEDICAL EXPENSE
INDEMNITY INSURANCE
MediCal expense indemnity plans pay indi-
vidual physicians on a fee-for-service basis,
For this reason, they must limit the scope
of their benefit coverage for the most part
to diseases requiring admission to a hospital,
the frequency of which is Predictable within
reasonable limits. Benefits outside of a hos-
pital are generally excluded because the
number of professional and laboratory serv-
ices which physicians may choose to render
outside of a hospital is unpredictable when
physicians are paid a fee for each service by
a third party. Even when some medical
benefits outside of a hospital are included
under medical expense indemnity contracts,
they are sharply limited in amount and
leave the insured families widely exposed to
additional nfedical bills. Comprehensive
benefit coverage is impossible under these
indemnity, fee-for-service plans because it
inevitably results in a rapid increase in
I medical bills and the progressive pyramiding
of costs to the insurance company.
The inadequacy of in-hospital medical coy-
1 erage as a means of protecting the family
c" budget is revealed by the experience of such
comprehensive programs of medical care as
the health-insurance plan of Greater New
York, which find that only 10.7 percent of
all Professional services are rendered to such
iinsured persons in hospitals and 89 percent
in their homes and doctor's offices. With
fees for home and office visits and for X-rays,
( technical laboratory work, and other diag-
i nostic and therapeutic procedures now ris-
ing to the point that care even for ambula-
tory patients may cost a week's wages, there
Pisprowtoel =For fReleetsee2003108126
ulatory as well as hospital care. Extra-
daltbRDP59./M32R0001 00260002-8
Nol
(hospital medical care is continually being
needed by all families; hospital care is often
not required for 20 or 30 years.
COMPREHENSIVE MEDICAL CARE THROUGH PREPAID
GROUP PRACTICE
During the past 25 years, local plans for
providing comprehensive medical care on a
prepaid basis have been established in van-
out parts of the country under the sponsor-
ship of medical groups, industrial organiza-
tions, labor unions, farm cooperatives, and
other local agencies. These independent
plans are able to provide medical care of
comprehensive scope in return for the col-
lective per capita premium income only be-
cause the services are rendered to the in-
sured by physicians engaged in organized
group practice, who together comprise all
the required professional, laboratory, X-ray,
and other specialty branches of medicine and
surgery. Under this system of completely
prepaid group practice, financial barriers to
prompt utilization of the needed medical,
laboratory, and X-ray services can be elimi-
nated and the insured families are able to
enjoy all the major benefits of modern medi-
cine, including prevention and early disease
detection. In our aging population, disease
prevention and early disease detection as
well as medical care during chronic illness
must be included in a medical-insurance
program if it is to meet the needs of the
public.
In this age of highly specialized profes-
sional skills and medical technology, the
total medical needs of an insured popula-
tion can best be met by such balanced tearas
of physicians, specialists, and technicians
trained in the the great variety of skills
and technics which today constitute modern
medicine. The comprehensive-prepayment
plans combine these medical skills and tech-
nics in the form of group practice and place
them freely at the disposal of people of
moderate means in return for the per capita
income derived from insurance premiums.
Each insured family has a family doctor who
has been selected by the subscriber from the
family physicians on the staff of a medical
group. The clinical laboratory, X-ray diag-
nosis and therapy services, pathology, physi-
cal therapy, and visiting nurse services of
the group are freely at the disposal of the
family physicians as are all the consulting
services of the group's specialists in the
various branches of medicine and surgery
without financial deterrents to their full
use.
An argument commonly advanced by op-
ponents of prepaid group practice is that it
does not give subscribers free choice of any
licensed physician in the community. From
the standpoint of a subscriber, this has abso-
lutely no validity, for he exercises his choice
when he decides to join the plan as a mem-
ber of his enrolled group of insurees and
he is at liberty to drop out of the plan at
any time. He is also at liberty to consult
any other physician at any time that he
wishes. It is certainly desirable that fami-
lies of low and moderate income be given
the opportunity to enjoy the benefits of
comprehensive-medical care through prepaid
group practice if they prefer it to so-called
free choice of individual physicians arid
specialists whose services they cannot afford
on a fee-for-service basis.
Families that receive all their medical
services from a prepaid medical group can
completely budget the costs of their total
medical care throughout the year. If satis-
fied with the full scope and quality of the
care provided for them by the medical group,
the insured population has no need to pur-
chase medical care from any other physician.
Therein lies the cause of complaint and re-
sistance by the opponents of prepaid group
practice in every part of the country in which
It has been established.
F93
Local medical societies consist lar el of
:EGIARDIA541108621;t0001
m02-8
economic and professional competition of
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group practice and will tolerate only a fee- Working capital was required during its
for-service method of solo medical practice formative period and the first year of op-
in insurance plans. Medical societies are station.. As this was the first experimental
therefore prevented by their membership demonstration of comprehensive medical
from taking any part in modernizing the care under community-wide sponsorship,
organization of medical care into group prac- several philanthropic foundations supplied
bee even though it is required by the high loans, which are being rapidly repaid out of
degree of specialization characteristic of the premium income. From our experience it
times in which we live. Because of local re- is evident that similar projects cannot be
sistance to progress, programs of compre- established without financial aid in the form
hensive medical care through prepaid medi- of grants or loans either from industry,
cal group practice have grown very slowly labor groups, consumer, or farm coopers-
and have as yet reached only 4 million people. tives, or, if it is to be under community
At the national level, the American Medi- sponsorship, from government. The role of
cal Association has accepted the principle government in the promotion of plans for
that independent groups of physicians and comprerensive medical care through prepaid
community leaders should be permitted to group practice was suggested in the 1947 Re-
experiment with newer patterns of prepaid port on Medicine in the Changing Order of
medical care and group practice. State and the New York Academy of Medicine.1 Once
county medical societies cannot or will not established, such plans can become self-
initiate or operate such experiments because supporting, paying adequate remuneration
of their political composition. A widespread to their physicians and repaying the initial
spirit,of intolerance to change pervades the loans.
thinking and actions of their leaders and in After 7 years of operation, the health-in-
some States laws have been enacted at the surance plan of Greater New York Is provid-
instigation of medical societies which actu- ing comprehensive medical care to almost
ally prohibit prepaid group practice. Some 400,000 insured persons. As a nonprofit
local physicians are even now seeking to alter agency established under the State's insur-
or reinterpret the Code of Professional Ethics since law, it is operated in the black and has
for the purpose of obstructing the develop- accumulated ample financial reserves as re-
rnent of the only form of voluntary health quired by the State's superintendent of in-
insurance which has thus far been able to surance. The services are provided by 30
provide comprehensive medical care at a cost medical groups, 29 of which are located in
which people of low and moderate Income various sections of the city and 1 in an ad-
can afford on a prepaid basis. jacent county. The medical groups are au-
On July 16, 1946, an editorial In the Jour- tonomous and are independent contractors.
nal of the American Medical Association Each group includes an adequate number of
warned that such obstructive behavior by family physicians proportionate to its en-
physicians may itself be unethical.1 In spite rollment size and a complete roster of quaff-
of these pronouncements, the conflict at the fled specialists representing the 12 basic
local level remains unchanged and now calls specialties of medicine and surgery. They
for more positive action by national author- comprise altogether about 1,000 physicans,
lties within the profession itself or else in- of whom about 450 are family doctors and
tervention by Government in the public in- about 550 are qualified specialists. The re-
terest. quired professional qualifications for mem-
ORIGIN OF H/P bership in a group are determined by an im-
partial medical control board of 15 repre-
In 1947, after a 4-year study of the prob- sentative physicians. The quality of medi-
lems of medical care, the New York Academy cal care is supervised by the medical de-
of Medicine concluded that prepaid group partment of HIP.
practice is the logical and evolutionary de- Under a fainily-type contract, the cost for
velopment of medicine In the changing or- an individual subscriber without dependents
der. In 1942 and 1944, the mayor of the city is $42.72 a year, for a couple $85.44 a year,
of New York, the Honorable Fiorello H. La- and for a family of any size $128.16 a year?'
Guardia, announced that the city would pay A family with 12 children pays no more than
half the premiums of nonprofit group health a family with 1 child. Allowing for large
insurance for municipal employees and their families, the average cost per individual is
families if insurance coverage could be made $36.36 a year. Employers are required to pay
truly comprehensive and employees and at least half the premium so that the week-
their families would be protected against ly contribution of a single employee is $0.41,
additional medical bills. In order to make of a couple $0.82, and of a family of 3 or
It possible for the city to pay half the pre- more, $1.23.
/Mum cost, permissive legislation was en- For providing all the care which may be
acted by the State legislature in 1946. Fol- needed by the insured families, HIP pays
lowing a prolonged study of nonprofit medi- each medical group a capitation of $29.40
cal insurance plans in various parts of the per annum for all persons on its rolls. After
country, the founders of the healthlineur- deduction of the cost of operating its audi-
ence plan of Greater New York were con- cal group center and of retirement benefits,
vinced that medical society sponsored plans, the remainder of the capitation income is
because of the current political structure of available to a group for the payment of sal-
the societies, could not change the current aries of its participating physicians, most
pattern of medical practice so as to provide of whom are partners in the group. When
the public with an opportunity to purchase a group reaches an average enrollment
comprehensive medical care. HIP was there- (14,000), the remuneration of its physicians
fore established on March 1, 1947, as an inde- is at least as high as the average reported
pendent nonprofit medical insurance plan incomes of other physicians and specialists
under a board of directors composed of rep- in the community and the physicians enjoy
resentative community leaders from labor; added benefits of security not possible for
business and industry. Government, and the the solo practitioner.
medical profession. It was designed to serve There are no deterring extra charges for
wage earners employed in private business any medical services which the insured may
and industry as well as governmental em- require in their homes, in physicians' offices,
ployees. The board of directors operates the medical group centers, or in hospitals.
plan as a community trusteeship. As in the Every kind of medical and surgical service is
case of voluntary hospitals, the entire re- available to them, including X-ray diag-
sponsibility for medical matters and the de- nosis and therapy, raditun and radio-isotope
The plan erects no barriers by reason of
age, sex, or preexisting illness, injury, physi-
cal defect, or pregnancy, either to admission
to its rolls or to utilization of services there-
after. There are no waiting periodil for med-
ical care for preexisting illness or preg-
nancy. Reliance is placed solely upon :_r_g_up
enrollment_to_p_ egalarth-e
eartfrr?3?.: r
iffra enrc Ilment wo fcrex ose it.
rs ay of' opera of the
plan, a division of research and statistics in
HIP has recorded every medical service to
every enrollee. By means of modern statis-
tical machinery, these data can be thorough-
ly recorded, analyzed, and evaluated. The
utilization rItes of medical, surgical, and
laboratory services by all age groups and
especially the plan's experience with old peo-
ple and with maternal and infant care will
provide valuable data for future programs
of medical care. An intensive study -of the
experience of the plan during its first 5
years is now being made by a special com-
mittee of impartial experts under the chair-
manship of Dr. Lowell Reed, president of
Johns Hopk:.ns University, which is being
financed jointly by the commonwealth fund
and the Rockefeller Foundation. In addi-
tion to a longitudinal study of the plan's ex-
perience with its insured population, the
special resesrch project conducted by Dr.
Reed's committee has included an investiga-
.tion of the sickness and -medical-care expe-
rience of large and representative samples of
households in New York.City and in the HIP
population, totaling more than 25,000 per-
sons. The g ublications emanating from the
research division are available to you as well
as all of the plan's recorded experience.
HIP also maintains a division of pre-
ventive medicine and health education as
one of its :important activities. It is the
responsibility of the expert staff of this divi-
sion to promote adequate utilization of
medical services by the insured population,
especially preventive services and those con-
cerned with early disease detection. The
objective is to have every family select a
family doctor and use him and the special-
ists and labaratories of their medical group
for the prevention and the early detection
and treatment:of illness. The effect of this
Wide exposure of the insured population to
medical cars can be measured by the fact
that at least 74 percent of the enrolled mem-
bers of the insured families are now using
their physicians' services within a year and
this rate is rising as our health education
program takes hold. The average rate of
utilization ct physicians' services by the en-
tire insured, population is 5.3 services per
year per person. The lack of financial bar-
riers to complete medical care has not led to
any significant amount of needless use of the
services by the insured. Subscriber abuse is
minimal and easily corrected.
The experience of HIP and of many similar
plans throughout the country is now suffici-
ently voluminous to demonstrate that com-
prehensive medical care through prepaid
group practice is professionally feasible and
financially practical from the standpoint of
both the doctors and the public. There can
also be no question of the importance of
prepaid comprehensive medical care to pub-
lic health.
To facilitate its growth, two things are
necessary: ? (1.) Elimination of interference
by local professional societies with prepaid
group practice: (2) financial assistance by
Government: through loans to encourage the
wider extension of prepaid comprehensive
medical Car throughout the country under
local community sponsorship.
termination of all professional standards are eray, Government at an levels may also help
thp diagnostic laboratory services.
delegated to a medical board and the medicalthrough the purchase of prepaid medical
physical therapy, visiting nurse services, and
aspects of the program are supervised by a care for its own employees and wards. It
even ambulance transportation without ,
medical director and his staff uld follow_the_ accepted practice of pur-
Approved For Release x20013703125 : CIA-RDP59-00882Rad81402Make2de under group contract
Footnotes at end Of speech. Footnotes at end of speech, from the :prepayment organization which
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\Qv' Nee
produces the best values for the price
charged.
ROLE OF FEDERAL GOVERNMENT
The role which the Federal Government
should take in promoting and extending ade-
quate medical care to the insurable popu-
lation of the country might well follow that
which it has already taken to promote and
extend adequate hospital care under the
Hill-Burton Hospital Survey and Construc-
tion Act. Federal assistance to the States
might first be limited to grants-in-aid to
encourage the States to survey existing de-
ficiencies in medical care within the State
and to determine:
1. The extent to which the insurable popu-
lation is not covered by prepayment for
medical and for hospital care.
2. The gaps in benefit provisions under
existing prepayment programs.
8. The means whereby the gaps in popu-
lation coverage and the gaps in benefit pro-
visions under existing programs may be elim-
inated.
4. The availability of voluntary insurance
plans which provide comprehensive benefits
for medical care in the homes, in doctors'
offices, in diagnostic laboratories and X-ray
services, as well as in hospitals.
5. The desire of the public for prepayment
plans which will provide comprehensive
medical services.
6. The existence of State laws which pro-
hibit or make it impossible for physicians
to provide such comprehensive medical care
through prepaid group practice of medicine,
The State surveys should also include:
1. A determination of the nonwage and
low-income group in the population which
cannot afford to prepay their medical care
through the purchase of voluntary, health
insurance.
2. The possibilities of experimentation by
State and local governments with coverage
of some or all of this group by voluntary
medical-insurance plans.
3. The degree to which Federal assistance
might be required to enable State and local
governments to provide medical and hos-
pital care to persons in the nonwage and
low-income groups (the medically indigent).
through prepayment.
4. The possibilities of experimentation by
State unemployment funds or other State
agencies with the provision of medical care
for temporarily unemployed persons and
their dependents through continuing the
prepayment of premiums for the unem-
ployed for care which may be needed during
periods of temporary unemployment.
Small Federal grants could be employed
most effectively to assist States in carrying
out experimental programs designed to ex-
tend prepayment plans and comprehensive
coverage under these plans to the part of
the population within the State which is
at present not covered or inadequately cov-
ered under such plans. In recognition of
the fact that comprehensive medical service
coverage under any voluntary prepayment
plan requires economies and increased effi-
ciency in operation which can be achieved
only by organization of medical services as
group practice, Federal aid to State and
local communities is needed to encourage
the establishment of prepaid group practice
of medicine under local community spon-
sorship.
The organization of medical practice along
such modern and more efficient lines requires
loans to medical groups for the construction
of the required physical facilities, to be
repaid by them out of future earnings. Such
loans for the purpose of encouraging local
prepayment programs for comprehensive
medical care should be limited to the acqui-
sition of medical group centers, the purchase
of X-ray, laboratory, and other professional
equipment required for group practice, and
the administrative expenses of the medical
AptlityVelfforRe I Ottstra 0001073 / 25
operation. The annual appropriations for
this purpose need not be large nor would
they be needed for more than 5 or 10 years,
for as the loans are repaid they may be
used as a revolving fund.
It can be predicted that rapid progress in
the extension of prepaid comprehensive med-
ical care Will not be made until (1) such
loans are made available, (2) hampering
State laws are 'repealed Wherever they exist,
and (3) effective.steps are taken by higher
professional authorities to eliminate inter-
ference by members of the local medical
profession in restraint of change from the
present costly and disorganized methods of
medical practice to a more modern and more
economical pattern.
I "Instances have occurred in which physi-
cians, for political, commercial, or emotional
reasons, have endeavored to utilize the prin-
ciples of medical ethics as a means of pro-
ducing embarrassment, distress, or loss of
reputation of other physicians whom they
envy or whose open competition they fear.
The principles of medical ethics were not
designed for any such purpose, and the at-
tempt to utilize the principles of ethics for
such purposes may well be hi itself un-
ethical." Editorial, JAMA July 16, 19411
(vol. 140, No. 11), p. 960.
"The committee recommends that com-
prehensive medical services be extended by
the use of voluntary, nonprofit insurance,
using group practice units wherever feasible,
and Government subsidy wherever neces-
sary." Medicine in the Changing Order,
Commonwealth Fund, 1947, p. 56.
'Subscribers to the health insurance Plan
must also have Blue Cross or other hospital
Insurance.
4 Except a permissible $2 charge for night
calls requested and made between 10 p. m.
and 7 a. m.
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1 44' y
APPENDIX XIII
Excerpt from Tedaylsileman? 1953 (Fawcett Publications, Inc.)
'plritten by Jack Harrison Pollack
"Perhaps the most satisfactory health insurance today is found
in the seventy odd comprehensive non.Trofit plans throughout the
United States. Usually sponsored by co-operatives and built around
the group-madicalvractice idea whioh made the Mayo Clinic famous,
they furnish in a single package virtually all of the medical and
surgical care you and your family may. require. When held along
with Blue Cross they offer nearly complete health coverage. .
'From the -patient's point of view they're better because they
emphasize preventive medicine,' a top doctor told me.
Typical of those plans are an Francisco's Permanente Health
Plan; the Seattle and St. Louis Group Health Associations; the Elk
MAT, Oklahoma, Farmers' Co-operative Plan; New York City's bustling
Health Insurance Plan (HIP).
HIP is America's .outstanding comprehensive prepaid medical
plan. Termixig it "the finest experiment of its kind," The New
York Times editorialized: "For actuarial and nedical soundness,
HIP has no superior. It is unique, a model for the country." In
1951 HIP received the Lasker Award for distinguished public-health
service.
Designed mainly for families with incomes under $6?500? HIP
menbers never see a doctor's bill nor are they saddled with extra
charges. There are no age limits or waiting periods and you can be
treated for awning from a common cold to the most complicated
surgery. HIP's 400,003 members include employees of the City of
New York, the United Nations and over 300 business firms, undone
and social agencies - and their iamiliee. Their employers pay half
the cost, employees pay the rest. The total cost ranges from ;;P.'2.72
a year for one person to 4'428.15 a year for three or more persons."
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