HOW DAVE’S PLAN WOULD WORK FOR INDIVIDUALS

For individuals covered under a contract that provides for healthcare and retirement, nothing would change while the contract is in force.  A plan ID number would have to be included in the person’s Income Tax Form.  That’s all.  Those under Government mandated plans say for  Congressmen, the President or the military would stay the same.  Just indicate it on the tax form. Everyone else would have a Personal Benefits Account (PBA).   Those that are employed would give their employer your PBA account information.  The employer would on payday make the proper deductions, 10%  minimum up to a Max equal to the current 401K cap plus $10,000 health allowance and deposit it in the employee’s PBA.  The self-employed would make those payments themselves on at least a quarterly basis.  If your adjusted net  income on your tax return indicates that you are entitled to Medicaid or a subsidy, the proper amount would be credited in total to your PBA .   The first thing the account would do is direct pay the Premium for a Catastrophic Health Policy you selected. Family PBAs would be linked to make health related payments so a family policy could be purchased and health expenses could be paid out of any family members account.  If you can get a lower premium through a group by all means take advantage.  The account associated credit card would be used to pay for any legitimate health expense.  Go to the Doctor or Dentist pay with the card.  Need a prescription filled use the card.  Buy a package of health services  from a provider use the card.  Supplemental health insurance plan, pay with the card.  Go crazy on everything health related use the card.  It’s your money and that’s the rub.  The choices are up to you.  Keep going to the high cost emergency room for the sniffles and you might have nothing to retire on.  The Minute Clinic at CVS  just might be the way to go.  You make the decisions with your money.  If you were on Medicaid and a lot of providers wouldn’t take Medicaid, what now?  You have the credit card and you can go any provider that takes credit cards.  No more second class.  Change jobs, no problem.  It’s your plan and it goes with you.  No more 401k here, IRA there and another 401k you forgot about.

One thing we are certain is that your healthcare choices will greatly expand.  The high deductibles especially under the Affordable Care Act  (ACA) has already has moved the market in this direction.  Most ACA policies are little more than Catastrophic Policies and everything else out of your pocket.  Add our credit card convenience, no credit risk and an enormous market , providers will have every incentive to innovate.  Walmart, CVS and others are already opening convenient low-cost clinics and this can only accelerate.  The fun part of innovation is we don’t know what exact form it will take , but it is likely to be to our benefit.  For some lower-income workers, the 10% mandatory contribution might be a burden.  Possibly this could be offset with an increased EITC.  For some people this will be their regular association with a financial institution and financial planning.  We view this as a real positive.

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