Last-Priority Loans and Obamacare
In a recent article, I argued that, whatever healthcare scheme we decide upon, it should be funded not with direct subsidies from the taxpayers, but rather with loans. If, in other words, a medical consumer had expenses that were covered taxpayers, that assistance did not come in the form of an outright cash “gift,” but rather as loans. To prevent entry to credit rating, and to minimize financial hardship, I argued that such loans should be subordinated to all of the loans, even to debt obligations occurring after the medical debt obligation, and that, during the lifetime of the debtor, no collection action be taken; the only such action would be against the estate of the debtor, if there was one. (I also proposed that inter vivos payments could be encouraged by offering a discount.)
Since the original proposal, there have been two additions: 1) on the rationale that, if you owe money, you shouldn’t be giving away money to others, there would be a special gift/bequest tax for medical debtors. 2) the medical debt of an individual that is not covered by his or her estate must be assumed by the first generation of the debtor’s descendents. The limitations placed on the original debtor will be placed on them. If the descendents do not assume such debt, they will be in eligible for any medical assistance, loans or otherwise.
What?! Hold the children accountable for the debts of a parent? That’s outrageous. But is it anymore outrageous to spend beyond our current levels of tax revenues, and pass our current debts on to the “children of taxpayers” – that is to say, to those – whether they are children of taxpayers are not – those who are yet to be born, who will be covering the expenses of the current generation. If it’s all right to pass the tax obligation on, then it should be all right to pass the debt obligation on as well.
At the present time, it looks like we have decided what are healthcare approach will be, which is Obamacare, which is financially unsustainable, and so will lead to fully-politicized medicine, that is to say “single-payer” (which, that current levels of medical care, will also be financially unsustainable, and lead to rationing (particularly for out-of-power political groups.)) It’s not so much that the current Congress has actually chosen such a path, but that it appears to be incapable of choosing any alternative to it.
In any case, for whatever reason, Obamacare remains. That’s fine, but there is still no reason why this approach should be funded by outright subsidies, as opposed to loans. We’re all supposed to believe in personal responsibility, aren’t we? So why don’t we change our system of financing so that it reflects that belief. Instead of requiring taxpayers to provide outright subsidies, require them to provide last priority loans instead. Under that system, those receiving subsidies to purchase medical insurance policies would be incurring a debt, one that, if not paid, would be passed on to their children.
Enact a policy such as that. Then we will see if some more cost-effective alternative to Obamacare can be found.