The Individual Medical Investment Account

1. The account.
   Each individual would have an account from birth to death, used to pay all of his or her medical bills. The account would look (work) like a savings account, a checking account, a credit card account, a debit card account, and an investment account. The money in the account would be the individual’s to spend on their medical expenses and only on their medical expenses. When a person starts earning an income above some minimum gross income, they would make a minimum tax-free contribution to their Individual Medical Investment Account (IMI Account) as a percentage of their income. There would be no limit to how much they could contribute to their account above that minimum. There would be no ceiling on their income used to calculate the minimum contribution. It would be a constant percentage of their income to as large as their income might get. A person would pay their medical expenses from this account. If they had insufficient funds in their account to pay the medical bills, they would charge the bill to their account just like one would do with a credit card. They would be responsible for paying what they had charged, just like paying on a credit card. There would be some interest charged on the amount owed. Not high interest like a credit card, but the same rate as interest paid on the money saved in the account. (Will talk about account debt in more detail later.)


2. Taxes.
   The money that is contributed to the Individual Medical Investment Account would be free of all taxes, federal and state income taxes, sales taxes, etc. The money that is used to pay medical expenses would be free of all taxes likewise. The only medical deduction of a federal income tax would be the contributions to Individual Medical Investment Account. This would make tax preparation a little simpler. People not using their Individual Medical Investment Account to pay the medical bills would not get a medical deduction.


3. Medical Insurance.
   A person could have medical insurance, but they would not be able to pay for it from their account.


4. The trust.
   The money would be held in a trust, like a national bank. The money would be held in a big pot and the trust would have the responsibility to care for this money as outlined below. It would pay the bills and invest the money. It would maintain a database and see that the money was only used on medical costs. It would oversee monies owed to the trust from credit cards or borrowing against ones account. The trust would be a nonprofit organization. It would invest the money that it held in trust so that it could pay dividends to the Individual Medical Investment Accounts and to pay for the expenses to run the trust.


5. Medical bills.
   The trust would pay medical bills, and only qualified medical bills. It would have the responsibility to determine if the bill was from a qualified provider of qualified medical products and services. It would determine if the provider is qualified to provide the medical products and service that were billed. It would not set a price for products and services, but it would check to see that the bill for products and services was reasonable based on information in the database supplied by the provider and other providers and based on what Medicare and insurance companies are currently paying for these products and services. The qualifying process should be mechanized so that there is very little human effort involved.


6. Investing the money.
   The trust needs money, financial reserves, to invest so that it can pay dividends to the Individual Medical Investment Accounts and pay its expenses. The trust should have money because of the money that is being deposited into the accounts. There is a risk that the monies used to pay the medical bills would be greater than the deposits. If this is so, the minimum payment must be adjusted so that the fund would have money to invest. When there are sufficient financial reserves, the minimum payment should be reduced. The trust should not make highly speculative investments or where investments would present a conflict of interest. It should prefer to make investments in the healthcare industry with the intent that everyone should have access to quality health care.


7. Oversight commission.
   An organization would need to be created to oversee the trust so that it is accomplishing its mission, which is affordable and quality health care for all. It needs to keep the trust on track, but not tied in knots.


8. Minimum payment.
   Besides the individual making a minimum payment to the Individual Medical Investment Accounts, all entities that pay income taxs would also make the same percentage minimum payment to an Individual Medical Investment Account even though they do not have medical expenses, per se.


9. Gifting.
   Gifting is the transfer of monies from your IMI Account to another IMI Account. This would be the standard way for a parent to pay for the medical expenses of their dependents. It is also a way for people and companies to give financially to people that have large medical bills that would have a hard time paying them otherwise. The companies have medical investment accounts that they can use for people in great need, such as employees, stockholders, customers, and anybody in great need. This is one of the reasons for companies to have medical investment accounts. Gifting is encouraged by all who can afford to do so to help those in need of the help. Gifting has a potential problem that the trust must guard against. That is gifting to people who do not need the gift so as to avoid income taxes. Accounts with funds sufficient to pay all foreseeable medical bills and receiving gifting transfers, should be suspect and the trust should have the authority to stop such transfers.


10. Investing.
    When an individual has sufficient funds to pay anticipated medical expenses, they can direct how their money is invested as one would do with an investment account. There are limits on how they can invest. For example, they cannot invest in great paintings and hang them in their home, or their brother-in-law's plumbing business where they have a financial interest like being on the payroll. The trust must guard against people using investing to avoid paying income taxes and other conflicts of interest. The purpose of investing is to allow those who put more than the minimum in the account and feel they can do better than the trust can with their money.


11. Loans.
    A person can borrow money from their account when there are sufficient funds to pay anticipated medical expenses and the person has sufficient needs and is in a position to pay the money back. They will pay interest on money they borrow, which will be equal to the money that the trust is earning on their investments. If trust is making 10% a year on their money, then the borrower will have to pay 10%. The loan rate will track, up and down, with the trust's earning rate. Again, the trust must guard against people using the lone privileges to avoid paying income taxes and other conflicts. The purpose for loans is to allow those that have been aggressively putting money into the account to be able to get to it for important personal financial needs.


12. Debt.
    It is understood that many people will need to use the borrowing provisions of their account. It is also understood that some of these people will not be able to pay their debt. The gifting provision is intended to help reduce this number. The trust will need methods so that they can forgive some of the debt. There's a fine line between forgiveness and entitlement. The trust will need to work hard to educate people that the medical payments are not entitlements, and they are to be repaid. There will be people who will pretend not to be able to make the payments and then others that truly cannot. It will be hard to tell which is which. But the trust must to do the very best it can.


13. Income tax credit for major medical expenses.
    When a person has major medical expenses, they would get income tax credits equal to their medical expenses. When they are well enough to earn an income, they could use the credit to pay down their medical debt. A part of the income tax they pay to the government would go to their individual medical account to pay on the debt. This would be like 10% of the tax they owed until the tax credit was all used. They could also sell their income tax credit. A person would deposit two dollars for every dollar of tax credit they would receive into the individual’s medical account. This tax credit would be used to help pay on income tax they owed up to say 10% of the tax owed for the year until the tax credit was consumed. Some people will never be able to pay all of their medical debt so they will need help from relatives and friends and the government to pay the medical debt.


14. Inheritance.
    The owners of the account will need to have one or more beneficiaries and directions on how the money in your account is to be divided among the beneficiaries. When loans are made, there need to be provisions on how the loans will be paid upon death of the owner.


15. Insurance companies.
    When the insurance companies makes payments for medical bills. They will make the payment to the persons individual investment account. There will be absolutely no money going to or from insurance companies and medical providers. There is no need for the insurance companies to have any dealings with the medical service providers. The trust can send the billing information to the insurance company, which should be sufficient to make payment to the individuals account. The insurance company should pay the same amount as it would have paid if this system did not exist. The provider should not expect any more money than he would have received if the system were not in place. It is hoped that insurance companies are only involved until the transition is made to the new system.


16. Transition.
    We have been paying money to insurance companies, taxes to the government, earning healthcare benefits from our employers. They should be holding money that is ours. They should put this money into our accounts. They will fight this tooth and nail and claim that they owe us nothing, or at least close to nothing. A lot of work and cooperation will be needed to plan for and make the transition from our current dysfunctional system for paying medical costs to a more efficient universal system.


17. Assumptions.
    a) There are people who have more than enough money to pay their own medical bills, and can help pay the medical bills of others.
    b) There are people who can pay their own medical bills but would be very little help to anybody else.
    c) There are people who cannot pay their medical bills, and never will be able to pay them.
    d) There are people who cannot pay the medical bills now, but will be able to pay for them in the future.
    e) There are people who cannot pay all of the medical bills, but can pay part of them.
    f) By taking all the money that is available to pay the medical bills. All the medical bills can be paid. If this is not so, the universal insurance system will not work, a government run health care system will not work. The results would be that some people would not get healthcare.
    g) Since not everyone will be able to pay for their own health care. Someone else will have to pay. Every system must get monies from those who have and use it for those who need. It does not matter whether and insurance company is redistributing the funds or the government is collecting the money in taxes and likewise redistributing the funds.