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
Dave’s Healthcare Plan
DAVE’S PLAN Q & A
Q. Having already gone through the horrors of one botched roll out, how can you assure us that this won’t be another complicated mess?
A. It’s an ill wind that doesn’t blow someone some good. By building on some things already associated with the Affordable Care Act (ACA), subsidies, the individual mandate and the IRS, we think we can convert the Affordable Care Act (ACA) to Dave’s Plan in 2 1/2 tax filing years without too much misery. In the first year, the IRS would change their filling forms to include the individuals Personal Benefits Accounts (PBA) information and reporting requirements by financial institutions. More importantly they would upgrade their payment software to incorporate the appropriate income and age levels for depositing the proper Medicaid and subsidy payments to the PBAs. Governments both Federal and State would have to determine what they are paid out in the previous year on average for subsidies and Medicaid by income and age group and get the numbers to the IRS in time to incorporate them in the following year. This could be a little tricky as medicaid varies between the states. However, in is this age of big data this shouldn’t be a problem. They should have this information anyway. With the IRS organized, providers and financial institutions could start gearing up for the changes. The institutions would have to incorporate payments for the qualified Catastrophic Policy whether they sold it or the account holder bought it elsewhere. Then their medical care only credit cards would have to be coordinated with providers probably through card companies (Visa, MasterCard etc.). Businesses would have to decide whether to drop benefits and just be responsible for payroll deductions and transfer to the employee’s PBA or go to or maintain a contractual system where they where would remain responsible for Health and retirement. If it’s the latter, the info would be included in their W2s. Health Insurance policies wherever purchased for the next year would be extended to Oct. 15 of the following year (Approx 18mos.) Continue reading
HOW DAVE’S PLAN WOULD WORK FOR EMPLOYERS AND THE SELF EMPLOYED
Employers that have contractual obligations to pay for healthcare and retirement would have no change. All others would be responsible for deducting the proper amount from paychecks (10% minimum with a Max equal to the current 401K cap plus $10,000 medical allowance and direct depositing it in the employee’s PBA. They would retain the same ability and limits to make matching funds. Again just deposit them to the PBAs. Employers will be encouraged facilitate a one time group move from their health plan to individual plans. As management tends to be older, this is very much to their benefit.
Employers will be encouraged negotiate their employees move en mass to individual policies. While this is in the best interest of everyone, employers, employees and insurers, there may be some circumstances where the help the agency administering the mandatory cash fund in each PBA may be sought to smooth the transition. The important principle is that everyone with employer insurance continued to have coverage.
That’s pretty much it. Before you pop the champagne, just remember you’ll still have to compete for employees. Wages and ability to pay matching funds would come to the forefront. Your employee’s healthcare and retirement will be totally portable, so job hopping would be much easier. Instead of trying to figure out a prospective employer’s health and retirement plans all the employee has to do is compare dollars. This would definitely level the playing field between large and small employers. All this is as it should be. The self-employed would come under the same 10% minimum and a Max of the current 401k cap plus 10,000 medical allowance and matching funds ability that apply to employers.
HOW DAVE’S PLAN WOULD WORK FOR THE GOVERNMENT
The one thing we can say for certain is this plan will cost more than the Affordable Care Act.(ACA) Wait didn’t we say that Government support would be based on Medicaid and the subsidies current on the ACA . Why should it cost more? Simply because it covers more people. Even under the supposedly universal ACA, millions remain uncovered. Our plan covers everyone. No ifs, and or buts about it. However, this should be cheaper than covering everyone under the ACA if it could ever get there. Helping offset the increased cost would be lower overhead and insurance costs. Continue reading
HOW DAVE’S PLAN WOULD WORK FOR PROVIDERS
Maybe providers won’t think they died and went to heaven, but it just might seem that way. No more dealing with third parties over every little thing. No more wondering about payment. Only when the Catastrophic Policies kick in would there be any reason to deal with an insurance company. That would most likely be in the case of serious illness and that’s exactly as it should be. Everything else just normal business. You would just have to be approved as a legitimate health provider. Anyone who is generally approved by insurance companies and/or Medicaid would be approved to accept the new credit cards. Providers that sell other products or services other than healthcare would have to keep a separation. For instance, Walgreen’s has separate terminals for Healthcare & Prescriptions so they don’t give Total Rewards Points on these charges. Nothing but healthcare terminals would be the norm or providers might come up with another innovative solution. To be sure, your customers will be keenly aware of what they are getting for their money and you’ll have no choice but compete. Again that is the way it should be. Large or small providers will be able to concentrate on providing good service at a competitive price. Providers could offer discounted prepaid packages or most anything else that might work. The huge potential market could prove very rewarding to innovative providers. The medical profession could concentrate on medicine. If nothing else it should improve morale. What more do you need to know?
Detour on the Road 