Friday, September 19, 2008

A Great Man Dies 

I learned today that Patrick Rooney has passed away. Mr. Rooney was the owner of Golden Rule Insurance and as a strong libertarian used his company to introduce people to the concept of medical savings accounts. Medical savings accounts, for those who do not know, are the free market's answer to the healthcare crises. The way that they work is that an individual buys a high deductible medical insurance policy and then deposits in an interest bearing account the difference in cost between a traditional insurance policy and the one he bought. If his medical insurance is through an employer then it would be the company that creates the account. The individual then pays cash from this savings account when utilizing heathcare services.

The power behind this idea is that when an individual pays their own money for medical care her or she is much more careful about utilization and cost as opposed to when an insurance company is footing the bill. Also, medical savings accounts are designed to build-up over time and therefore due to the rules of compound interest studies have showed that it is quite simple for a young person to build up millions of dollars in their MSA by age 65.

Mr. Rooney offered medical savings accounts when no one else would. I had the great opportunity to hear him speak on the subject years ago and his enthusiasm lite up the room. Many people talk about new ideas but here is someone who had the guts to actually implement one.

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