[Last revised 8/9/17]
LAST-PRIORITY LOANS: A POLICY BETWEEN LIMITED GOVERNMENT AND THE WELFARE STATE
We return – part way – to the system we had with the enactment of the Emergency Medical Treatment and Labor Act of 1986. (That is, that emergency medical service and related services be provided irrespective of ability to pay, but that medical consumers would still be held financially accountable for such services.)
“Part way” means:
1) The scope of medical services provided are not reduced to the scope of 1986, but kept at current levels.
2) Medical consumers would not be “held accountable” with the same rigor that was the case in 1986:
A) Specifically, all such “medical debts,” would be subordinated to all other debts — including debts incurred after the medical debt was incurred.
B) Medical debt would have no interest, but would be adjusted for inflation, and it would have no statute of limitations. (Thus, though still subject to its subordination, such debt could be collectible from the estate of the debtor.)
A) Involuntary Payment:
1 – Assessment against medical debtors estate (still subject to subordination)
2 – Special taxation against reportable gifts or bequests (such as irrevocable trusts)
B) Voluntary inter vivos payment
1 – Government can offer a discount for prompt, inter vivos payment. (For example, a 25% discount for payment within the first year of the medical debts incursion, reduced by 1% annually thereafter.)
IN A PHRASE:
Entitlements, not for other people’s money to cover medical expenses (or insurance premiums,) but for last-priority loans to cover them.
1) The proposal could be applied to virtually any system, including vouchers or single-payer.
2) Aside from revenue collection, the purpose is to promote a sense of personal responsibility.
3) The proposal guarantees health care, but it does not assert that others are responsible to cover the expenses. (It guarantees a loan to cover expenses, but not a gift.)
4) Because of the subordination of medical debts to all others (including subsequent debts) and related provisions, there is no detriment to the debtor’s credit or to the incentive to improve his or her financial condition.
5) The only real objection to this policy is that it offends, not the entitlement to receive medical treatment, but the entitlement to have others pay for such treatment.
6) The alternative of “means-testing” penalizes the more affluent, and rewards the less affluent. As such, it violates the impartiality that should be the foundation of all government policies. Replacing subsidies with last-priority loans that are based not on the recipient’s income, but on the actual medical expense incurred itself, asserts the proper impartiality. (Even if, in actual practice, the revenue collected from means testing and last priority loans may be very similar, both in amount collected, and the sources they are collected from.)
7) Such a policy would constitute a conceptual revolution vis-à-vis the role of government with respect to its citizens. While it would assist citizens, it would not (at least in legal theory) take responsibility for their welfare.
8) Without this proposal; without some degree of personal responsibility, there is no check on the benefits that some voters will impose on others. To the degree the cost of such benefits are tied to the person receiving them, there is a check.
9) The proposal fosters a principle that Republicans, if not also Democrats, can rally around.
10) We have a rare opportunity to strike a balance between limited government and the welfare state. We may not have such an opportunity again.
1) If we require taxpayers to cover the medical expenses of the indigent, how, if the indigent later come into sufficient money, can we not require them to pay a portion of that back to the taxpayers? To put it another way, why should we require taxpayers to give money away when they can lend it?
2) Which attitude, as a nation, do we wish to foster? A) That others must not only ensure that we receive the medical treatment we need, but, irrespective of our later financial condition, that others must pay for it. Or, B) That we are responsible for the medical expenses (or premiums for medical insurance) we incur, regardless of our ability to pay for them at the time of treatment.
KEY STATS AND FACTS:
Cost of bypass surgery in the US: $70,000 to $200,000
Cost of bypass surgery in India: $2300 to $6500
Healthcare policy in the US: Primarily Politicized
Healthcare policy in India: Primarily Market-based
MORAL: Whatever brings us closer to the market should lower costs.
POSSIBLE OBJECTION (AND RESPONSE:)
OBJECTION: Medical debtors would resent such a designation.
RESPONSE: Such a designation would reflect the reality. The alternative would be to assert that, based on their need, medical debtors a have right to the property of others.
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