Thursday, March 15, 2012

Coercion in the MS&L

There are many interesting topics related to the Medical Savings and Loan. The MS&L replaces insurance with a combination of structured savings accounts, loans and grants (the grants are for people who cannot self-fund care).

The central feature of the plan is the structured savings account. The goal is to have people build adequate savings to pay for their expected health care needs. The system has a position called a Health Care Advocate who will educate clients on expected future expenses and will set up the structured savings program. 

If the program works, the policyholders will have hundreds of thousands of dollars set aside for health care. So, there must be ways to  encourage people to save and to prevent them from wasting money on a new car or vacation. Many of these techniques border on coercion.

CraigJCasey brought up the question of coercion with the comment: "as long as 'structured' does not mean forced / coerced."

There is an element of coercion in self-funded health care. Essentially, if a person is expected to self-fund their care, and they never save; then they don't get care. This is a very clear threat: "If you do not save for your health care; you don't deserve care."

The MS&L supplements savings with loans and grants. The loan reserves will not give the loans to people who are not in a structrured savings program. The foundations giving grants will favor people who are  part of a structured savings program.

This system is very coercive.

The program will have loans and grants available, but you don't get them if you don't save. That is a direct threat. The advocates will tell you that you will have hundreds of thousands of dollars in health expenses and if you don't save, then you don't deserve the care. They are playing on your fears.

This coercion is not contrived. The advocates will look at the cost of medical care and tell its policyholders that you must be setting aside a certain amount to assure that you can cover your expenses when your time comes.

The program does use coercion. The difference between the Medical Savings and Loan and insurance, PPACA, socialism, etc., is that it does not use coercion to take money from one person and give it to another. It is using coercion to encourage people to self-fund care and prevent the artificial transfer of wealth to fund health care.

The program works by telling people how much money they should set aside for care. It creates a structured savings plan to help people set aside this amount of money.

The program supplements the savings accounts with loans and grants. The kicker is that you won't get the loans or grants if you are not engaged in structured savings.

Charitable organization might use the MS&L concept to force people into better financial habits. For example, let's say a person shows up at an emergency room expecting care. The emergency room would give that person a loan for their care ... then use the loan to coerce the patient into a structured savings program. The care provider is using the loan to force the person into savings.

This "coercion" reduces the amount of money the public sector needs to commit to providing health care.

There are other elements of "coercion" in the program. Employers have a strong desire for employees to take care of their health. Employers will deposit the money currently paid for insurance into an account that has a contractual clause that states the money must be used for health care. This contract is coercive. You can't use your health savings to pay for other goods.

Nature is coercive. Nature forces us to do things that we do not want to do. I would prefer to be awake at all times, buf nature forces me to go to bed every night. I would prefer to fly than to walk, but nature uses gravity to hold me to the ground. By our nature we are forced (coercion) to endure things we would prefer to avoid.

The real question is not whether or not coercion exists but whether or not the coercion is natural or contrived. The coercion we need to avoid is the coercion in which an authority takes resources from party A and gives it to party B. The MS&L reduces coerced transfers of wealth.

The MS&L presents clients with a structured savings program. It tells people that if they do not participate in the structured savings, they do not deserve access to grants and loans. That is coercion ... but a better coercion than one in which the government takes the people's money and reduces them to dependency.

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