A common reaction we’ve received to Dave’s Plan to reform the Affordable Care Act (ACA) is that it’s just too complicated.  Why mix retirement and other savings plans in with medical care reform?  Actually the point was to simplify both by reestablishing the link between savings and expenditures. In the U.S. as with many other countries we don’t save as much as we should.  This leads to problems as populations age. In the not too distant future entitlements for the retirees will crowd out most other Government spending.  That of course will prove to be impossible.  For instance, we just might need a national defense.   Australia looking at a similar future has already opted for a mandatory 10% savings plan.  It isn’t that we don’t have people participating in retirement plans.  According to the American Benefits Council, defined contribution plans such as 401ks had 74 million active participants and that was in 2010.  In that year total employment was 138,641,000.  Employer health plans cover the majority of Americans.  Obviously, we have a good base.  All we are proposing is the accounts be held by Individuals with employers and the self-employed making the payments directly into Personal Benefits Accounts (PBA).  Add a Catastrophic Health Policy to the PBA and everybody having one and we have the basics.  We kept the ACA’s popular features of making the policies non-cancel able and children being able to stay on their family policy till 26. The ACA Subsidies and Medicaid payments based on age group experience would be deposited directly into qualifying PBAs by the IRS when their tax forms are processed, just as we do the Earned Income Tax Credit.  With the PBA’s constant inflow of funds and growth, adding a Medical Credit Card completes the package. Continue reading →