Evening star., 1938-01-07
QUESTIONS ATTACK.
ION GROUP HEALTH.
Senate Legal Aide Holds
H. o. l. c. Plan Not Up
to Controller General.

The legality OF the action OF Home
Owners Loan Corp. in pledging s40,-
900 toward establishment Of the Group
Health Association, Inc, for its en-
ployes, was not subject to determine
ton b. the Controller Generals ONCE,
according to an opinion rendered to
Senator McCarran, Democrat, Of
Nevada by the stan Of the Senate's
legislative counsel.
Made public by Senator McCarran,
the legislative counsel report said In
part:
However questionable the wisdom
of the action Of the board Of directors
of H. O. L. c. in entering into the con-
tract with the Group Health Associa-
ton. Inc. may have been. since Con-
gress did not specifically authorize the
corporation to expend its funds for the
purpose of providing medical services
and disqualification for its employees,
it IS not clear that the expenditure
was one which the corporation did not
have authority to make"
Broad Powers Cited.
The report then quoted q section
Of the H. o. L. Z. Act of 1888, giving
the corporation broad power to deter
mine its necessary expenditures. The
legislative counsel opinion next ex-
pressed the belief that before entering
into the contract the board Of direc-
tors Of the corporation appears to
have made q bona fide determination"
that protection Of its employees from
illness and the worry caused by 1t
was essential to efficient operation Of
the agency.
BY the wording Of the H. O. L. c.
law, the report stated, Congress took
from the Controller General whatever
power he might ordinarily have had
to pass on expenditures Of this agency.
Senator McCarran, who was one of
the first to inquire whether H. o. L. c.
had the right to make the health al
lotment, asked the General Accounting
Once for its opinion and several weeks
ago received an opinion from Acting
Controller General Elliott. holding the
allotment was without authority Of
law.
Two Remedies Suggested.
The Senator then asked the legisla-
tive drafting experts Of the Senate to
study the matter. After discussing the
legal .phases, in their response, they
suggested two alternative courses Con-
gress could follow If it desires to take
action: First, pass . law requiring
specific legislation before any agency
could expend money for . purpose
similar to the H. o. L. c. allotment;
or, second. subject all agencies of the
Government to the General Account
ing Office.
Seantor McCarran again today en-
phatically urged enactment Of legis-
lation with teeth in it to prevent any
Government agency. however wen
meaning" from using Government
funds for purposes not contemplated
by Congress.
New Group Backs Health Plan.
Meanwhile, . new group Of Govern
ment workers, espousing the general
idea behind q. H. A., has organized
into the National Committee for Group
Health, with Wallace r. Burke Of the
General Accounting ONCE as tenn
porary chairman.
The new committee intends to press
for an amendment to the Social Sc
curity Act to provide not only group
health insurance, but also ito make
all benefits Of social security available
to Government employees"
Chairman Burke pointed out that
Government employees are not only
interested and favorable to group
health insurance, but, in addition,
more than $4,000 Federal employees
are entirely excluded from the bene-
fits of the Social Security Act as now
constituted"
"The organized medical fraternity,
said Mr.. Burke, "for reasons Of it
own, opposes plans based upon pre-
payment for services to be rendered
but offers no substitute plan, similar
in principle, which would achieve the
desired objective.
This committee is understood to be
entirely different from the COMMITTEES
for Cooperative Medical Service fol
Federal Employees, which has been
studying the question Of group health
for many months, and has also come
to the defense Of q. H. A.