POLITICAL ISSUE #304: 3rd PARTY MEDICAL FUNDING

PRESENT CONDITION: Medical costs are increasingly 3rd party funded either through private sector insurance or worse through government programs.

DIRECTION OF IMPROVEMENT: Medical care costs excluding catastrophic expenses should to be covered mainly by individuals.

ISSUE JUSTIFICATION: Medical cost control and efficient allocation of medical care resources can only be achieved if individual citizens are motivated to control costs by having to pay a significant portion of their discretionary medical costs.

AUTHOR: UWSA SANTA CLARA CO EMAIL:humphrey@aimnet.com

OPTIONS FOR ISSUE # 304: 3rd PARTY MEDICAL FUNDING

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BRIEF DESCRIPTION: Basic Medical Insurance (e.g. $1000 deductible with 80% coverage with a cap at $5,000 (i.e. $1,800 maximum annual non-insured payment)) and only such insurance shall be tax deductible for everyone. Employees currently receiving more generous insurance shall have the right to drop the extra insurance and have the cost of the additional insurance added to their pay. If they retain the insurance, its value will be added to their W2 wages reported to the IRS. Insurance companies must accept all applicants. The rate charged may vary with age, but must otherwise be uniform to individuals and employees of large corporations. Insurance companies may require a 60 day waiting period and a five year minimum policy to discourage people from signing up just before major operations.

JUSTIFICATION: American medical costs can only be controlled when Americans have to pay a significant portion of their medical costs and thereby have an incentive to control costs. The above plan encourages Americans to be self insured for their normal medical costs while ensuring all Americans equal access to insurance for major medical care. The above plan requires those who use the system more to pay more for services up to their deductible and then their 20% co-payment.

AUTHOR: UWSA SANTA CLARA CO EMAIL:humphrey@aimnet.com

OPTIONS FOR SOLUTION # 304.1 BASIC INSURANCE AVAILABILITY/DEDUCTIBILITY

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SOLUTION DEFINITION STATEMENT
FOR
SOLUTION # 304.2 MEDICAL SAVINGS ACCOUNT

BRIEF DESCRIPTION: Citizens could create a medical savings account to cover uninsured medical costs. Funds deposited in this account to cover medical costs and to create a balance of up to $5,000 for individuals and $10,000 for joint or head of household returns would be tax deductible. The fund manager would pay medical bills submited by the account holder and supply the IRS and the account holder with an annual statement of net deposits to support tax deductions. Funds withdrawn for non-medical uses would reduce net deposits and if they exceeded deposits would result in taxable income for that year.

JUSTIFICATION: Medical savings accounts will 1) encourage citizens to accumulate funds for major medical costs 2) encourage citizens to personally cover and therefore more closely monitor their medical costs 3) promote freedom by making citizens less dependent on employer medical insurance programs. 4) encourage citizens to accumulate savings for non-medical needs.

AUTHOR: UWSA SANTA CLARA CO EMAIL:humphrey@aimnet.com

OPTIONS FOR SOLUTION # 304.2 MEDICAL SAVINGS ACCOUNT

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