But, this is foolish. The usual way that this intoduced is with a
catastrophic insurance clause. That is, one would buy a relatively low
cost, high deductible (perhaps $2500) policy that would insure against
risks that really are terrible when they occur. The day to day, mundane
treatments and other things would be paid out of the MSA of $2500. The
combined costs of funding the MSA and buying the high risk policy should be
less than the cost of a first dollar risk insurance policy. The best part
of this is that consumers would be encouraged to ration their trips to the
doctor as they would have an incentive to do so, especially if any residual
in the MSA remains with the consumer.
The funding of the MSA would not necessarily have to be done directly by
the consumer. In the case of workers, it could be funded by the company in
the same way that companies presently fund first dollar insurance. It
would certainly be possible for the Medicare program to fund a certain
number of dollars for each of its elderly clients and then insure only
those highest risks. The elderly would be encouraged to shop for the best
medicine at prices they could afford instead of being seen only by those
medical professionals who decide to participate in the Medicare program.
The same thing could be done for the poor. Medicaid could be treated in
the same way.
The present system and those who support it assume that not only are people
old or poor or something else, but that they are also stupid. Some people
are stupid, but there is no way to insure against this risk.
*********** REPLY SEPARATOR ***********
On 4/7/00 at 11:12 AM MCCARTHY, Roger wrote:
>The major problem with MSA's and any other system of healthcare funded by
>individual payment is that there is generally an inverse relationship
>between the need for medical treatment and the capacity to pay for it -
the
>people with the greatest need for medical treatment (the elderly, the
poor,
>those with long-term disabling conditions) are those with the least money
>while those with lesser needs are the most affluent - with this not being
>unconnected to the fact that illness frequently reduces or eliminates the
>capacity to earn and save.
>
>The second big problem is that even with (in some cases especially with)
the
>internet consumers generally lack the information and training to make
>'cost-efficient' or any other sort of major medical decisions - that's why
>we need a medical profession and why vast amounts of money are spent every
>year on quack treatments like homeopathy or on health-threatening products
>like cigarettes.
>
>OK there is a libertarian argument that people should be allowed to spend
>their money however they like and that if they make bad decisions they
alone
>are responsible for the consequences, but we are here entering the realm
of
>ideology and leaving that of economics.
>
>Of course if we all happened to be perpetually young billionaires with
>medical degrees.....
>
>ROGER
>
>> -----Original Message-----
>> From: BaylorU. Labs [SMTP:[log in to unmask]]
>> Sent: 06 April 2000 05:48
>> To: [log in to unmask]
>> Subject: MSAs
>>
>> I feel that the concept of medical savings accounts is an interesting
>> alternative to the current health care system. With this system, people
>> would contribute a portion of their own income into savings accounts,
>> which are in turn used for medical services. I feel that this system
>> will put people in charge of their own health care decisions.
>> Furthermore, if they are spending their own money they will be more
>> likely to make cost-efficient choices.
>
>
>
>
>----------------------------------------------------------------------
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>-----------------------------------------------------------------------
A. Edward Day
Department of Economics
University of Central Florida
P. O. Box 161400
Orlando, FL 32816-1400
Voice: 407-823-2620
FAX: 407-823-3269
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