Guaranteed Healthcare

1.0  INTRODUCTION

This Plan contains the following major points:

 

·         Makes health care available and affordable to ALL THE PEOPLE.

·         Medical SERVICE PROVIDERS are always PAID.

·         Very low cost to those who stay healthy.

·         Removes the fear of financial ruin due to catastrophic health care costs.

·         Removes pre-existing conditions.

·         Automatically adjusts to a change in a Person's economic condition.

·         Allows deferred payments in time of crisis.

·         Radically changes Federal health care programs. (Replaces most of MEDICARE.)

·         Radically changes the role of employers in regard to providing health care for their employees.

·         Designed for “USE BUT NOT ABUSE”.

·         Distinctly defines government’s role.

  

A NEW APPROACH TO HEALTH CARE COVERAGE.

This plan was developed in 1995.  It was sent to all Senators and to First Lady Hillary Clinton.  Nothing happened.  It has been discussed with several healthcare professional and all agreed that it is an improvemnet over our current system.

This plan is copyrighted. You have my permission to distribute it.

  HEALTH CARE PLAN J001R  

1.0  INTRODUCTION

This Plan contains the following major points:

 

·         Makes health care available and affordable to ALL THE PEOPLE.

·         Medical SERVICE PROVIDERS are always PAID.

·         Very low cost to those who stay healthy.

·         Removes the fear of financial ruin due to catastrophic health care costs.

·         Removes pre-existing conditions.

·         Automatically adjusts to a change in a Person's economic condition.

·         Allows deferred payments in time of crisis.

·         Radically changes Federal health care programs. (Replaces most of MEDICARE.)

·         Radically changes the role of employers in regard to providing health care for their employees.

·         Designed for “USE BUT NOT ABUSE”.

·         Distinctly defines government’s role.

  

2.0  PLAN BASIS

This plan is based on a concept already used by the I.R.S.  The I.R.S. has stated that a Person is responsible for their own health care.  However, if a Person has had a "bad year" and the cost exceeds 7.5% of their taxable income, then the I.R.S. allows anything above the 7.5% mark to be deducted from their taxes.

 

This plan uses the same concept.  A Person is responsible for 100% of the cost of their health care, up to a fixed percentage of their taxable income.  (For purpose of discussion, a figure of 8% is used.)  Any cost above the 8% percent mark (but not greater than the FAIR VALUE mark) is provided by the I.R.S. as a LONG-TERM, ZERO INTEREST, LOAN against the Person, collectable at the time of the Person's estate.  (Definition: Time of estate is when the Person becomes deceased.)

 

(NOTE:  If the Person is married, the collection of the Long-Term Loan can be postponed until the spouse’s time of estate.)

  

3.0  PLAN OVERVIEW

(See FIGURE 1)

 

3.1  THE CLIENT

(NOTE:  The Client can be a Person, group or agency.  For purpose of the PLAN OVERVIEW discussion, the Client is considered an ADULT Person.)

 

The CLIENT would contract with a LICENSED CLAIMS PROCESSOR for services.  The Claims Processor would issue a PICTURE Identification Card (similar to a credit card) to the Client.  Whenever the Client uses a Medical Service, the Client uses the Card and the Medical Service sends a detailed bill to the Claims Processor (with a copy given to the Client).  The Claims Processor pays the bill directly to the Medical Service.  When the Claims Processor sends the (itemized) bill to the Client, the Client has the option of paying the bill right away, or waiting until tax time.  If the Client waits, the I.R.S. pays the Claims Processor who pays the bill.  This payment from the I.R.S. is considered a LOAN.

 

The cost of using a Claims Processor would be a SMALL annual fee and then a fixed fee on a per claims basis.  (NOTE: The cost of using a Claims Processor is considered part of the Total Annual Health Care cost.)

 

NOTE: A Person does not have to contract with a Claims Processor if they wish to pay all their bills directly to the Medical Services.  However, only a Licensed Claims Processor can handle FEDERAL money.  Additionally, only a Licensed Claims Processor can provide the Total Annual Medical Statement, which is used at tax time in the determination of annual health care cost above the 8% mark (and above the FAIR VALUE mark).

 

At tax time, any funds under the 8% mark (and over the FAIR VALUE mark), which have been LOANED by the I.R.S., become due.  This sum is added to the normal annual taxes due.  If this sum is not paid, it becomes subject to all the same penalties as any other over-due tax.

 

IMPORTANT:  PARTICIPATION IN THIS PLAN (OR ANY PLAN) IS STRICTLY UP TO THE INDIVIDUAL.

 

3.2  MEDICAL SERVICES

Whenever a Medical Service is provided to the Client, the MEDICAL SERVICE provider sends an itemized bill to the (Client’s) Claims Processor (with a duplicate going to the Client).  The Claims Processor pays the bill.

 

NOTE:  This Plan does not impose any restrictions on which Medical Service provider is selected by the Client.

 

3.3  LICENSED CLAIMS PROCESSOR

The Claims Processor is licensed by the FEDERAL LICENSING AGENCY.  The Claims Processor, when contracted by a Client, provides all claims handling for that Client.  When the Client uses a Medical Service, the (itemized) bill is received by the Claims processor.  The Claims Processor pays the Medical Service and sends the (itemized) bill to the Client.  The funds required to pay the bill, above and beyond that which has been collected from the Client, comes from the I.R.S..  The Claims Processor presents a lump sum bill to the I.R.S. (probably on a weekly basis) for any additional funds needed.  The I.R.S. provides these funds (in a lump sum) to the Claims Processor, who distributes the funds to pay the outstanding claims.

 

At the end of the year, the Claims Processor sends to the Client the TOTAL ANNUAL MEDICAL STATEMENT.  This statement shows (for each Person) the (annual) Total Health Care Cost, the Total FAIR VALUE Cost, how much has been paid (by the Person) against these Total costs and, for information only, payment made by the I.R.S. toward selected PREVENTIVE health care cost.  A copy of the Total Annual Medical Statement is sent to the I.R.S..

 

The Claims Processor also provides statistics to, and works with, the Federal Licensing Agency.  These annual statistics are used to determine the FAIR VALUE rates.

 

IMPORTANT: The Claims Processor is NOT a collection agency.

 

NOTE: The Claims Processor's role is filled by what is now the Health Care Insurance industry.

 

3.4  FEDERAL LICENSING AGENCY

The FEDERAL LICENSING AGENCY handles the licensing of the Claims Processors.  Only

Licensed Claims Processors can handle FEDERAL money.

 

The Licensing Agency works with the Claims Processors (and the Medical Community) in determining nation-wide codes for each type of claim (most codes are already established).  It also establishes the frequency of use (if relevant) for each type of claim (similar to the currently used DIAGNOSTIC RELATED GROUPS).

 

Some types of Medical Services, such as childhood immunizations, would be considered as NATIONAL PREVENTIVE HEALTH CARE ISSUES (as discussed in “HEALTHY PEOPLE 2000”).  These claims would be coded so that they are paid entirely via the I.R.S. (no expense to the Client).  The Client’s Total Annual Medical Statement would list, as information only, how much was paid on these types of claims.

 

Some types of Medical Services are totally voluntary for cosmetic purposes.  These types of claims are not consider part of the Plan coverage and would be rejected by the Claims Processor.  (The Person using this type of service is totally responsible for its cost.)

 

The Licensing Agency collects annual statistics from the Claims Processors and determines a FAIR VALUE for each type of claim.  The FAIR VALUE is based on the 80th percentile of regional costs plus 10%.  A region is defined by the first three digits of the Medical Services ZIP code.  (NOTE:  80th percentile means that 4 out of 5 Medical Services have a lower rate for this particular type of claim.)  Since the FAIR VALUE is based on statistics from the previous year, the 10% allows for inflation.

 

NOTE:  The FAIR VALUE rate is similar in function to the rates established by the DIAGNOSTIC RELATED GROUPS, but allows for regional variations.

 

3.5  I.R.S.

The I.R.S. provides the necessary funds to the Licensed Claims Processors for payment of any outstanding Medical Services claims.

 

At TAX time,  the I.R.S. collects from the Client any funds paid between what the Client has already paid and the 8% mark.  Additionally, the I.R.S. collects any funds paid above the FAIR VALUE mark.

 

The funds paid by the I.R.S. between the 8% mark and the FAIR VALUE mark are treated as a LONG-TERM, ZERO INTEREST, LOAN (against the PERSON), payable at estate time.  The status of this Long-Term Loan is reported (by the I.R.S.) to the Client annually.

 

IMPORTANT: The I.R.S. does NOT process any claims.

 

3.6  EMPLOYERS

The role of EMPLOYERS changes drastically.  Under this Plan, the burden of paying for health care is now linked to an individual’s health and economic condition, with the remainder spread across the tax base.  This means the EMPLOYER is no longer the primary provider of health care benefits.  This applies to both current EMPLOYEES and RETIREES.

 

Employers will probably still have to pay part of the total health care cost.  What the I.R.S. does not collect from the Client (both Short-Term and Long-Term Loans (and MEDICARE?)), it collects from the Employers.  (One method would be a flat rate fee for each current Employee.)  This amount should still be considerably lower than what is currently paid by most Employers for health care.

   

4.0  ADDITIONAL DETAILS

 

4.1  CLIENT

The CLIENT is a Person, group or agency who is financially responsible for Person’s health care.  The Client is also responsible for making sure that the Person’s TAX FORMS have been filed.

 

There are four types of PERSONs:  ADULT, ADULT IN NEED, CHILD and CHILD IN NEED.

 

4.1.1  ADULT

An ADULT is a Person who is responsible for their own financial obligations.  Usually, the ADULT is the CLIENT.

 

4.1.2  ADULT IN NEED

An ADULT IN NEED is a Person who is not able to be responsible for their own financial obligations.  The Client becomes the Person, group or agency which handles the finances of the ADULT IN NEED.  All financial obligations are still under the name of the ADULT IN NEED but are handled by the Client.

 

NOTE: Any LONG-TERM LOAN payments made by the I.R.S. goes against the ADULT IN NEED’s account (NOT THE CLIENT).

 

4.1.2.1  SPECIAL CASE: PERSON WITH NO INCOME

An ADULT Person who can not afford the cost of a Claims Processor can be classified as an ADULT IN NEED.  This Person would go to a specified SOCIAL SERVICES AGENCY and apply as an ADULT IN NEED.  The Social Services Agency becomes the Client for this Person.  The Social Services Agency contracts with the Claims Processor, pays the processing costs and issues the PICTURE Identification Card to the Person.

 

4.1.3  CHILD

A CHILD is a Person under the age of eighteen who has a PARENT or LEGAL GUARDIAN.  The Parent or Legal Guardian is financially responsible or the Child’s health care.  The Total Annual Medical Statement of the Child is added to the Total Annual Medical Statement of either Parent (or Legal Guardian) or split equally between the Parents (biological or step parents, depending who has financial responsibility).  This arrangement provides flexibility for different family arrangements, such as children with only one parent, divorced parents with joint custody or families with step-children.

 

NOTE:  The Parent’s financial obligation for the Child still applies, even if the Parent is an ADULT IN NEED.  The ADULT IN NEED’s Client handles the claims.

 

4.1.4  CHILD IN NEED

A CHILD IN NEED is a Person under eighteen who does not have a Parent or Legal Guardian.  This Person is handled the same as an ADULT IN NEED, except that there is NO LONG-TERM LOAN.

 

4.2  CLIENT RESPONSIBILITIES AT TAX TIME

The Client, at tax time, accounts for any money paid by the I.R.S.  This is done by using the Total Annual Medical Statement furnished by the Claims Processor.  The Total Annual Medical Statement contains, for each person, the Total Health Care Cost, the Total FAIR VALUE Cost, how much has been paid (by the Person) against these Total costs and, for information only, payment made by the I.R.S. toward selected PREVENTIVE health care cost.

 

These totals are used to determine the amount above the FAIR VALUE that is owed the I.R.S., the amount of the Short-Term Loan owed to (or refunded by) the I.R.S. and the amount that is added to the Person’s Long-Term Loan.

 

4.2.1  AMOUNT PAID ABOVE FAIR VALUE

If the Total Health Care Cost  is greater than the FAIR VALUE, than the difference is automatically due the I.R.S..  All other amounts are based on either the TOTAL HEALTH CARE COST or the FAIR VALUE, whichever is LESS.  This is the ADJUSTED TOTAL.

 

4.2.2  AMOUNT PAID BY THE I.R.S AS A SHORT-TERM LOAN

The difference between the amount paid by the Person and the 8% mark (or the Adjusted Total, which ever is less) is the amount of the Short-Term Loan.  This amount is due the I.R.S.  (NOTE: If the Person has paid more than the 8%, then the I.R.S. refunds the difference between the amount paid and the 8% mark.)

  

4.2.3  LONG-TERM LOAN AMOUNT

Any amount above the 8% mark and below the Adjusted Total is added to the Person’s Long-Term Loan.

 

4.2.4  FILING INDIVIDUALLY

If there is a Child(ren), the Child(ren)’s Total Annual Medical Statement is added to the Individual’s Total Annual Medical Statement.  The Individual calculates the amounts as describe above.

 

4.2.5  FILING JOINTLY

If there is a Child(ren), the Child(ren)’s Total Annual Medical Statement is added to the responsible Person’s Total Annual Medical Statement (or split equally between the responsible Persons ).

 

The (joint filing) 8% mark is split between the two Persons.  If both Person’s Adjusted Total is above 4%, then each uses 4% for their individual calculations.  Otherwise, the Person who has the least Adjusted Total uses a percentage equal to that Adjusted Total. The remaining percentage is used by the other Person.  Once the percentage has been split, each Person uses their percentage (instead of 8%) to calculate their individual amounts as described above.

 

4.3  COLLECTION OF LONG-TERM LOAN AT ESTATE TIME

 

4.3.1  SINGLE PERSON

At the Time of Estate of a SINGLE Person, the following occurs:

·         The value of the estate is established.

·         The estate pays any outstanding bills.

·         The I.R.S. collects the Long-Term Loan.

·         The remainder of the estate is distributed as normal.

 

IMPORTANT: EVEN IF THE ESTATE IS LESS THAN THE LONG-TERM LOAN, THE LONG-TERM LOAN ENDS AT THIS POINT.  THE LOAN CANNOT BE TRANSFERRED OR INHERITED.

 

4.3.2  MARRIED PERSON

(For discussion purposes, the two married Persons are FRED and LISA.)

 

At the Time of Estate of a MARRIED Person (FRED), the following occurs:

·         The value of the estate (FRED’s) is established.

·         The estate pays any outstanding bills.

·         The amount of the estate that is to be inherited by the Spouse (LISA) is transferred to the Spouse.

·         The I.R.S. transfers, as a separate account, FRED’s Long-Term Loan to LISA.  This account                      (called FRED’s ACCOUNT) has a maximum value equal to the amount inherited by                                                LISA.. FRED’s ACCOUNT is not added to LISA’s Long-Term Loan, but is a separate                                      account attached to LISA and ONLY to LISA.  FRED’s ACCOUNT becomes due at the                                  time of LISA’s estate.

·         Any remaining portion of FRED’s Long-Term Loan that was NOT TRANSFERRED (to LISA) is                collected by the I.R.S. from the estate.

·         The remainder of the estate is distributed as normal

 

At the Time of Estate of LISA, the following occurs:

·         The value of the estate (LISA’s) is established.

·         The estate pays any outstanding bills.

·         The I.R.S. collects FRED’s ACCOUNT from the estate.

·         If LISA is SINGLE, the estate proceeds as described for a SINGLE PERSON.

·         If LISA Is (RE)MARRIED, the estate proceeds as described for a MARRIED PERSON.

 

4.3.3 DIVESTING OF ASSETS BEFORE ESTATE TIME

NOTE:  It is possible for a Person with a Long-Term Loan to divest assets before estate time.  This prevents the I.R.S. from collecting the Long-Term Loan.  However, when those assets are divested, they go into the economy and become:  “someone else’s (taxable) income”.

  

5.0  RELATED ISSUES

 

5.1  MEDICAL LIABILITY AWARDS AND LIMITATIONS

This Plan could directly affect medical liability awards (and insurance rates).  Because the MAXIMUM ANNUAL MEDICAL EXPENSE is capped at 8% of the injured party’s income, awards should be based, not on the total medical costs, but rather on what would be a reasonable ANNUAL INCOME for the injured party until that party could recuperate.  (NOTE:  Because the award is INCOME, it is subject to taxes.)

 

NOTE:  Any Punitive Damages awarded would be paid to this Plan via the I.R.S..

 

5.2  GIFTS

If a Person has a Long-Term Loan with the I.R.S., the maximum ANNUAL SINGLE GIFT that can be given, without paying taxes, is $1000.  The maximum ANNUAL TOTAL for both GIFTS and CHARITIES is $5000.  (These limits are removed if the Long-Term Loan is paid.)

 

5.3  MEDICAL INSURANCE INDUSTRY

The Medical Insurance Industry is affected most by this Plan.  Currently, the Industry collects a Flat Rate Premium from all policy holders.  This Premium must be high enough to pay not only the average claims, but also the catastrophic claims as well.  For many Lower and Middle Class Americans, this Premium represents a significant portion of their income (if they can afford it at all).  This Premium is particularly onerous to a Person who is healthy.  The MAJOR reason this Premium is paid is the FEAR that a CATASTROPHIC medical condition MAY happen.  This Plan removes that FEAR by implementing the 8% LIMIT on annual expenses.  There are NO PREMIUMS under this Plan.

 

The Medical Insurance Industry now becomes the Licensed Claims Processors.  This causes TWO SIGNIFICANT CHANGES.  FIRST: Instead of a Premium, fees are collected on a PER CLAIM basis (with an additional SMALL annual processing fee charged).  SECOND: A Licensed Claims Processor can handle FEDERAL money.

 

NOTE: The total number of Claims will probably increase.  This is because the Federal Government is removed from the business of Claims Processing (such as Medicare).  Also, individuals who were previously unable to afford insurance are now covered under this Plan.

 

NOTE: Some individuals (particularly wealthy ones) may find it advantageous to stay with the current Medical Insurance system (using fixed Premiums) rather than risk losing 8% of their income.

 

NOTE: Some individuals may wish to protect their estates (particularly large estates) with a type of insurance that would cover any accrued Long Term Loan.

  

6.0  CONCLUSION

The AMERICAN HEALTH CARE PLAN is an economical and easily implemented system which addresses many of the health care issues that face this country today.

 

It makes Health Care AVAILABLE and AFFORDABLE (in a “USE BUT NOT ABUSE” fashion) to ALL Americans (regardless of age, economic and health conditions).  It provides for PREVENTATIVE Health Care, removes PREVIOUS CONDITIONS and protects against CATASTROPHIC Health Care costs.

 

It removes much of the Health Care financial burden from Employers.

 

It keeps the Health Care Industry, including the role of the Claims Processor, in the private sector.

 

It keeps the Federal Government in the role best suited for it.  This includes regulatory (standardization of the Medical Claims Processing Industry via the Licensing Agency), oversight (national and regional Health Care status via the collection of statistics) and assistance to needy Americans (Short-Term and Long-Term Loans via the I.R.S.).

  

FEDERAL

LICENSING

AGENCY

LICENSING

STATISTICS

FAIR VALUE

TOTAL

     CLAIMS/

          TOTAL

 PAYMENTS

 

INDUSTRY

LICENSED

CLAIMS

PROCESSOR

MEDICAL

SERVICES

I.R.S

CLIENT

SHORT TERM

AND LONG

TERM LOAN

PAYMENT

MEDICAL

VISITS

BILLING/

PAYMENTS/

YEARLY

STATEMENT

          CLAIMS/

PAYMENTS

FLAT

RATE PAYMENT

                     

FIGURE 1

PLAN OVERVIEW

  

ADDENDUM

4/20/00

 

7.0  CLARIFICATION

Section 4.2.5 “FILING JOINTLY” describes how the Long-term Loan portion is split between the two Person’s accounts.

  

8.0  ANNUAL REPAYMENT

If there is a long tern loan outstanding and it has been a good year (less than 4%), the difference between the Person’s Adjusted Total and the 4% mark is paid against the Long-term Loan.  If FILING JOINTLY, the repayment is split between the two accounts with the healthy person’s account receiving the larger amount.

 

                                                                                                                                                James Randal Robb