Thursday, October 01, 2009

Medical Savings and Loans in the ER

One of the biggest hurdles of health care reform is that forcing people to buy insurance is Unconstitutional. Car insurance requirements flow from the licensing procedure. This game of making health insurance mandatory is a purchase that you are required to make for the act of existing.

One can implement a "universal" Medical Savings and Loan by creating a loan reserve with universal access. The catch is that taking a loan throws the person borrowing the money into a forced savings plan.

So, if someone shows up at the ER and doesn't have the cash to pay for service, they they would be immediately enrolled in the savings plan. The person showing up at the ER would required to pay back both the loan and put money in health savings.

So, lets say I showed up at the ER and had a bill of $10k. I might be required to repay $20k ... with $10k going toward the loan and $10k going into savings.

The repayment schedule would be capped at a percentage of income. So, lets say I can only repay $16k. In this scenario I would end up paying back $8k to the ER and have $8k in savings ... this is a $2k subsidy for my initial visit (better than a $10k subsidy). I also have $8k for other health expenses.

Needless to say, a person in a medical savings and loan would be able to take out additional loans as deemed necessary.

A government run medical savings and loan would skirt the constitutional problems of forcing people to buy insurance. Joining the program is a condition of the loan is is not something forced on a person for the act of existing.

There is nothing to prevent an ER from enrolling non-US citizens in the loan program.

As it is silly for people to seek primary care in the ER, it would make a lot of sense for non-profit clinics to have the ability to make loans and enroll people in a universal medical savings and loan.

The program does not magically create a dynamic where sick people are able to afford all of their care. It does, however, create a structure where they pay a greater percent of the care they receive. The funding for the medical savings and loan, of course, could come from the money currently granted for funding care to those in need. As people seeking assistence would be paying more for their care, the medical savings and loan provides a mechanism that help stretch out these dollars currently in the system.

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