The answer to your question is long because I have to look at different populations. This post has four sections:
- The MS&L as an Alternative to Insurance
- The MS&L for the self employed
- The MS&L as Public Policy
- People in Desperate Need
The MS&L as an Alternative to InsuranceMost people these days work for an employer. So the primary market for the MS&L will be as an alternative to insurance. The employer makes the payments into the MS&L. The employees would be asked to sign contracts that they will only use the money for health care.
There are big questions about how ironclad one can make the contract and the tax status of the compensation.
The MS&L for the self employedThe second big group for the product is the self employed. The self employed are looking for an alternative to insurance and are generally motivated to save. The big problem with the self employed is that they suffer big ups and downs in their life.
The MS&L as Public PolicyThe Medical Savings and Loan can be used in public policy. For example, if a person has no savings and requests medical care; you would give the person a loan for the care, assign the person a case worker then slam them into a structured savings program. The fact that you gave out a loan gives you a little bit more control than simply giving free health care.
People in Desperate NeedThere are people who either have really high medical expenses or really low earning potential.
No matter how you go about financing health care, such people end up consuming more than they produce.
A person with a lifetime income of $400,000 might only have $20k to spend on health care. They don't have the income to pay for insurance. The Medical Savings and Loan gives such people direct control over the amount they have for care while providing substantial supplements.
Likewise, people with middle incomes and wicked nasty health care costs are unable to pay for their care. Again, the program gives such people direct control over some money while receiving supplements.
ConclusionThe Medical Savings and Loan is more flexible than insurance pools. By breaking an insurance pool into individual accounts, it is possible to create a system that can be customized to meet the different needs of different people.
The primary goal of the program is to help those people who can self fund their health care accomplish this goal. This is the bulk of health care in America. Helping working class Americans self-finance their care is empowering. It also reduces the stress on social services.
The Medical Savings and Loan exposes itself in an elegant way to social welfare. While the Medical Savings and Loan does not start with public policy, public policy can draw on the program to give incentives for good behavior. Notably, rather than giving free health care to the poor, the system would give loans and place people into structured savings plans to repay the loans.
No system provides a perfect solution to the problem of people who must consume more than they produce to survive.