I first developed the Medical Savings and Loan as a product line for an insurance company. The program broke up the insurance pool into individual accounts. Workers would build equity in their accounts and were given the experience of self funding their care.
During the health care debate, I decided to create a more abstract version of the program for conversations sake.
My goal was to argue that our health care problems are the result of using group funding for individual consumption.
This third model is a massively distributed system.
In this model, I eliminated the insurance company altogether.
The savings accounts are in a bank (or credit union) of the policyholder's choice. The loans come from a loan reserve held by a financial services company. The health care advocates are all small businesses that contract directly with the policyholder and the grants are administered by foundations.
I find that this massively distributed system is a lot easier to talk about as it allows me to talk about each element of the plan separately.
My goal is to contrast group-funded health care with self-funded health care.
By removing the insurance company completely, I can use the term "insurance company" as a synonym for "group funded care" and Medical Savings and Loan as a synonym for "self-funded care."
There are currently some advantages to this approach.
The weakest point of PPACA is the insurance mandates.
The left has invested a great deal of effort vilifying insurance companies. It may be possible to hijack that rhetoric and tell people: "Yeah, the insurance company (group funded care) underserves the working class. We should adopt the Medical Savings and Loan (self-funded care) which lets the worker keep his health care resources."
Personally, I have no malice to insurance companies. They are filled with good people who are trying to make the world a better place.
I dislike the product sold by insurance companies. I believe that our attempt to use group funding for individual consumption is prone to abuse and leads to unintended consequences and inequities.
I have to make another confession: I prefer small business to big business. A massively distributed network suits my taste better than a centralized network. This preference does not mean I would be opposed to an insurance company that developed a product as I had described earlier.
This post completes my article on different configurations of the Medical Savings and Loan. The basic concept behind this plan is to use a combination of savings accounts and loans to help people who can self fund their care do so.
The Savings and Loan should be the primary means for health care funding. This program will identify those people who cannot self-fund their care. For these people we would develop a well funded grants program.
My writing on this subject appears obtuse and contradictory at times because I see multiple ways to implement the basic concept of the Medical Savings and Loan.