## Thursday, March 31, 2011

The last post noted that the Medical Savings and Loan was a mathematical model I developed by analyzing real claim and premium data.

Insurance looks at the health care of a group for a year. The Medical Savings and Loan looks at each person as a whole entity and analyzes their lifetime medical expenses.

The first thing I discovered was that all but a fraction of people have reasonable health costs in relation to their income.

The second thing I realized is that if one followed the whole life approach to funding health care, a large number of people would have a sizeable amount of savings during their lives. A large number of people would have accounts well over a hundred grand in their 40s and 50s.

The figures are not unreasonable. I do not have accurate actuarial data at hand.

However, my observation is that, in the status quo, insurance companies and government takes well over a half million dollar (\$500,000) from each worker for medical expenses.

My educated guess is that all but a tiny fraction of people will have under \$300,000 in life time expenses.

The amount of money that the system takes from people is substantially higher than actual costs because so much of it is spirited away in the form of fraud, profit or just waste.

The goal of the Medical Savings and Loan is to give people direct control over that first \$300,000 dollars.

The hardest part in structuring the program is finding a way to convince Americans, who've been trained to be consumers, that having a hundred grand in savings is par for the course.

The idea that people should have several hundred grand in savings looks absurd until one starts looking at the way the economy works.

It takes a great deal of capital for a society to provide quality jobs.

Most jobs that pay well require a great deal of capital. Walking through the mall, we find that a well stocked store will have several hundred grand in inventory per employee. Construction crews on the roadside drive rigs that cost several hundred thousand dollars. Our public school teachers work in buildings work in builds that cost millions to build on extremely valuable land.

Most high paying jobs require a half million dollars or more in capital.

Increasing the amount that each American save would create jobs.

As people are likely to get some interest on savings, increasing the amount of savings should help increase the overall income of American workers.

Of course, the inverse of the above statement is true.

The expectation that insurance would pay medical expenses decreases savings.

Since the appearance of insurance last century, there has been a steady increase in the gap between rich and poor. This is due primarily to decreased savings as Americans developed the attitude that the state or their insurance companies would care for them.

Switching from an insurance paradigm to the Medical Savings and Loan would reverse the growing gap between rich and poor.

Taking the savings of the people and putting it in insurance concentrates wealth.

It is this insurance paradigm that is systematically turning our nation from a free nation to a class nation with a distinctive owner class and vast slave population.

Reviving the savings paradigm would reverse this trend.

The money is there. The Medical Savings and Loan takes the money that goes into insurance and gives it back to the people.

Oddly, the biggest challenge to the program is convincing a people who've been trained in progressive schools to be consumers to be savers. It is difficult to convince people who expect to be cared for that having a hundred grand in a savings account for medical expenses is normal.

Insurance currently takes about \$500,000 from each worker. The MS&L would let workers keep the first \$300,000, and put \$200,000 per worker in a grant program.

The challenge is to keep people from wasting their stash of cash.

The Medical Savings and Loan hinges on a new position called Health Care Advocate. This advocate is really a financial advisor whose primary job is to convince people trained to be caudled that having a few hundred grand is savings is normal.

If the plan worked, we would fully fund health care and counter some of the forces which have been artificially concentrating wealth.

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