A plan for citizens to responsibly pay all medical costs

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During the State of the Union address, President Obama repeatedly insisted he would “fight.” Referring to those individuals who have lost health care coverage, the president declared he would “not walk away from these Americans.”

Then, dropping down the gauntlet, Obama challenged “but, if anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors, and stop insurance company abuses, let me know. [Applause.] Let me know. Let me know. [Applause.] I’m eager to see it.”

Hearing that, many Americans likely thought, ‘There he goes again!’

Well, Mr. President, since you asked for it, here’s more on how you can help Americans secure health care coverage and get lower premiums.

Below is a medical backup plan that alone will lower the average cost of health coverage for everyone. This backup plan would be available only to citizens, if they should need it, to personally pay health care coverage premiums or excess costs. And, use of this medical backup plan would help Americans willing to reconstitute personal responsibility—especially if elected officials at all levels refrain from playing giveaway politics with the program.

But first, let’s recap last week’s column titled “How to KO pre-existing conditions with a one-two punch” as those action steps, combined with this new medical backup plan, will serve to dramatically lower costs for everyone.

Last week I noted:

“Mr. President, all you need do is… publicly… start jabbing – that is jawbone… all private insurance providers as well as the officials in each of the 50 states. All you need do is repeatedly:

•Ask each private provider to add a market-priced package that covers pre-existing conditions to their portfolio of health care coverage offerings. That will provide every American the opportunity to purchase whatever breath of coverage they need; and,

•Urge each of the 50 governors to call a special session of their state legislatures to convene before March 15th so they can vote yes or no to opening their state to all private insurance providers.

If Mr. Obama effectively executed just those two action steps, he would motivate most, if not all, private entities to fill gaps in current offerings with market priced coverage for pre-existing conditions. And, he could prompt those state officials who are astute to unlock state markets for the benefit of citizen residents.

Those two action steps would certainly lower the average cost of coverage for all Americans.

Add this third action—the backup plan that follows—and the average cost of coverage will drop even more as those citizens willing to step up personal responsibility enter the market place.

Here is the Medical Backup Program Loan as addressed to Mr. Obama:

Mr. President, if you are willing, here’s another approach that will further reduce health care costs and reconstitute personal responsibility at the same time.

This plan is designed to help citizens who might need interim funds in order to personally pay for health coverage premiums and excess costs.

Interestingly, this unique approach uses a financing methodology that millions of Americans—parents and children—are quite familiar with.

In fact, sir, while you brought it up in the SOTU address for another reason (apparently, for the political purpose of dangling a student loans forgiveness cap of 10 and 20 years, respectively, to college graduates who work in the public or private sectors, we’ll set aside a critique of that for now) we have repurposed the financing method used originally for student loans so that American citizens can optionally use a Medical Backup Program Loan to secure or retain coverage in order to limit their exposure to the financial impact of potential medical calamities.

The Medical Backup Program would be composed of three types of loans: the Medical Advance Loan for plan-ahead coverage; the Medical Post Advance Loan for excess costs; and, the Medical Emergency Loan for one-time instances. Succinctly put:

• Citizens needing interim financing to pay for basic annual policy coverage might choose to pursue a Medical Advance Loan.

• Citizens incurring excess medical expenses not covered by an enrolled plan might choose to pursue a Medical Post Advance Loan.

• Citizens employed but not covered by private insurance or who lose private coverage, and in either case do not faithfully secure COBRA or other coverage, within prescribed time frames, for themselves or their families, might pursue a one-time Medical Emergency Loan. Application for a Medical Advance Loan might be a contingent requirement for disbursement.

In addition to financial institutions and health insurance companies, program providers could include doctors, hospitals, rehabilitation centers and nursing homes. Such providers would be authorized to extend, and optionally carry, Medical Backup Program Loans. All would sign, publicly announce, and conspicuously display a simple English language one-page proviso that all citizen patients are eligible.

Interest, if charged, would be limited to preclude usurious effects. Rates would not exceed the lower of 2 percent per annum or the rate charged to banks by the Federal Reserve for a Medical Advance Loan or the Medical Post Advance Loan. Perhaps, Mr. President, in Medical Emergency Loan situations you might believe a 3 percent or 4 percent max-cap is warranted to stimulate personal responsibility, albeit after the fact.

Rate changes, if any, would go into effect only on the annual anniversary of the loan.

In any case, medical professionals, institutions, and insurance entities could offer interest cancellation or rate reductions for outstanding principle converted to a new or existing Medical Advance Loan account.

Mr. President, this unique plan will work because it is designed specifically to assist those Americans committed to fulfill their personal and family responsibilities regarding health care.

In fact, you can take the Medical Backup Loan Program one step further.


By further leveraging the methodology used with the student loan application process as orchestrated by the federal government.

Most parents upon reading what follows will likely smile knowingly.

Some might utter aloud, “Yes!”

Here’s the additional food for thought:

Students applying for educational loans receive a federal report advising how much money their parents can afford to contribute to pay toward the student’s costs for college.

Euphemistically, the feds call it the “family contribution.”

Mr. President, the same family contribution practice could be applied to all Medical Backup Program Loan applications.

Specifically, each citizen applying for a Medical Backup Loan would list all other adult family members plus all children. Those 18 years and older could be invited – perhaps, required – to co-sign paperwork pledging to repay medical loans, or help to do so, should a parent applicant(s) stop making payments.

Sir, you boldly asked during your SOTU address, “…if anyone from either party has a better approach…let me know…I’m eager to see it.”

Mr. President, this is neither a Democrat nor Republican idea…it’s an American ideal… and we are eager to see you embrace it!

Richard Olivastro is president of Olivastro Communications, a professional member of the National Speakers Association and founder of Citizens For Change. He can be reached at Rich@Olivastro.NET or 877.RichSpeaks.