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Financial Insurance for all with liberty for the individual

Written by Louis Even on Sunday, 01 March 1959. Posted in Social Credit

Instead of obligatory health insurance, taxes and shackles

The idea of state health insurance has been receiving an astounding amount of publicity.

Many have been under the happy illusion that this would mean the end of hospital and doctor bills: "Free treatment for all! The government is footing the bill!".

Others, realizing that if the government is going to pay it must get the money somewhere, are under the impression that, "the big, rich fellows will pay for everyone; it wont cost us a cent."

After submitting to pressure for years, especially from the Socialist-minded who look for the almighty state and the classless society, and also on the part of those who are being bled white by rising hospital and medical costs, the government has finally taken the first step.

New Taxes

This is by no means the hospital insurance of those who look for "it wont cost us a cent". This insurance covers only the cost of the stay in the hospital; it does not provide for the demands of the doctor, the surgeon, the anesthetist, the cost of medicines and care if you are sick at home but do not have to go to the hospital. So at the very beginning of the project there is disillusionment; nothing but the hospital is paid! It's not free at all! And what is worse, you must pay in advance — even if you are in the hospital only one day, even if you don't have to go at all!

But then that's insurance. All insurance is like that, including state insurance. The only difference is that state insurance is obligatory. And you take it whether you like it or not. With private insurance you take it or leave it. You are at liberty to choose from the many plans offered by private companies, the one that suits you best.

State health insurance, to which eight provinces have so far subscribed, begins with obligatory registration of every citizen — except in Ontario where it is not yet obligatory for everyone. Next come taxes; yes, new taxes. In Nova Scotia, a sales tax; in other provinces, personal taxes which come to a yearly average of $50 a family plus $25 for each member over 19.

Then there's the complicated machinery for the collection of contributions. The employer takes still another slice out of the pay envelope; a corps of special officials in each city; municipal councils and rural officers taking on extra special functions in other cases. All the world is caught up in this machinery.

Shackles

And don't forget, this is obligatory. You can be fined or sent to jail for refusing to fall in with the plan. Refuse to pay and they'll take over the family's possessions.

You can own a farm or a house and still have no money. Such being the case, so much the worse for you. As with other forms of taxes, the plan requires money and nothing else. If you can't pay the municipality which is responsible to the plan, then the municipality must seize your property and sell it in order to have the money to turn over to the plan. As you probably know from experience, he who has no money, has not, in the eyes of the tax gatherers, the right to own a roof over his head. He is an undesirable. So this health insurance plan is simply going to create more undesirables.

What of those who have neither money nor property? There is a clause which exempts them from assessment, though they will be insured once they have proved that they are genuinely destitute. But it is understood that if they do rise to a level where they have a little money, they must declare this change and start contributing. There will be investigators and there'll be stool-pigeons to inform on their destitute neighbors if the latter should seem little better fed today than they did last evening.

Taxes, investigations, shackles, bureaucrats — these are what we start with. And to get something in return, we must fall sick. And it must be a sickness which, in the opinion of the doctor, necessitates a visit to the hospital. If there is no hospital in your part of the country, you will have to make the trip to the nearest one at your own expense. The plan does not provide for this. And if all the beds in the hospital are taken, as happened in Nova Scotia the first month of the Plan, you simply have to wait for your turn... if it comes before a better world calls you...

There are two parties to the contract; you and your family on the one hand and the Plan on the other. You, for your part, pay immediately. The Plan pays later, much later, — if at all.

You pay the total cost $50 for the family and $25 each for every person over 19 years — will this cover the total cost of the plan? Far from it. In Ontario, for example, the government estimates that the total yearly cost of hospitalization for all the provinces will be close to $200,000,000. The contributions of families and individuals will raise about $75,000,000. or about a third of the needed sum. Who is going to pay the other two-thirds? The federal and the provincial governments, half each. Does this mean that, thanks to state health insurance, you are going to be spared paying two-thirds of the cost of hospitalization? Definitely not. You are spared nothing.

You pay one third of the cost of the plan by direct taxes labelled: "This is for the Plan". The other two third's are paid by provincial taxes which are not necessarily marked, "For the Plan", but which will nevertheless go to the plan from your pockets. You pay for the plan directly, inasmuch as you pay income taxes, sales taxes, etc.; you pay them, indirectly through prices inasmuch as companies and firms are forced to contribute to hospital insurance and pass the cost on to the customer as is their custom.

The folder explaining the hospitalization plan is quite explicit. In Ontario, employees of companies employing less than 14 individuals, are not obliged to participate in the plan. However, the leaflet explains quite pointedly: "inasmuch as you already pay two-thirds of the cost of hospitalization through the general taxes you pay, you should not hesitate to participate in the plan and pay the other third in order to benefit from the plan; otherwise, the two-thirds which you are obliged to pay will benefit you nothing."

So there is very little liberty of decision in this matter. Two dollars are forced out of you. Then you are told: "You must freely consent to pay the third dollar in order to get something back for the three; if you don't you will loose the two dollars."

This is pretty much the same method used by the central government to induce the provinces to participate. But the federal government drains money from the provinces; then it says to them: "You are free to accept or refuse my plan. If you accept it you will pay part of the plan and I will pay mine from the money I have already taken from you. If you refuse, I will keep what I have already taken from you and you will receive no benefit whatsoever for it." So most provinces have agreed to take part in the plan and to impose new taxes on their citizens in order to draw some benefit from the money already taken from them.

The principle of insurance

Insurance is not an invention of the governments. It has existed in various forms for a long time now. Private companies and mutual associations have specialized in different forms of insurance, perfecting the technique, evaluating the cost of each type of insurance according to the information supplied by the statistics involved in each kind.

In principle, insurance consists in sharing among the participants the expense of certain adversities which can strike indiscriminately, one or the other of them.

Supposing we have one thousand property owners who know by experience that on an average, each year, the house of one member will be destroyed by fire and that this will cost him $15,000. Now why should this one be ruined beyond hope? Not knowing which is going to be struck by disaster, they unite and institute a fund to which each contributes $15. a year. Perhaps a year will pass, without any of them being struck by fire. The following year perhaps two will be wiped out. But, generally speaking, $15 a year from each will cover the loss of whichever one is smitten.

With regard to health insurance, the risk is sickness. No one knows when he may fall sick, how long the sickness will last, how serious it may be or what expenses it may entail. The ordinary budget may be sufficient to meet ordinary expenses and perhaps a bit more. But it can never cover the expense of a serious illness, hospitalization and medical treatment today. Insurance companies know by computations made over a number of years on the entire population, what it costs per person on an average to be sick. So these companies offer those who wish to be insured, certain premiums to be paid by the insured, the size of the premium to depend on what sickness the individual wishes to be insured against.

The one wishing to be insured enters a certain group and the expenses of a sickness afflicting one or the other of them is shared by the whole group, costing something to each one but ruining no one.

The principle is quite sound. It was generally acknowledged to be so in Ontario, for example, even before the intervention of the government with its state insurance. Seventy two percent of the people had some form of insurance, most of it going well beyond mere hospitalization. And it had all been taken out voluntarily.

Why then did the government have to intervene with its state health insurance, with all that is eventually implied of bureaucracy and increased taxation?

Inability to pay

If the Ontario government judged it advisable to participate in the hospital insurance plan of the federal government, it was certainly not because of the 72% already insured, and holding much better insurance than the government plan gives. No, it was because of the other 28%.

Among this 28% are certainly those who could take out insurance if they so wished, but for some reason or other, prefer not to. Then why should the liberty of these people not be respected? Or, if they are among those who are shouting for state insurance, then why bother about them at all since they are the ones who will not take it when they are capable of paying for it?

However, there are among the 28%, those who are truly unable to pay the costs of health insurance. The leaflet setting forth the details of the plan does not say what proportion of the 28% is made up of those needy individuals. But one thing is sure, it is because of this minority and because of them only that a state health insurance plan has been inaugurated. The others either have private insurance or do not want it.

But then let us ask this question: why are these poor people unable to pay? Medical care, like clothing, food, lodging, is a part of what we call the necessities of life. In a country like Canada where there is enough and more than enough to furnish everyone with an essential part of what he needs to live decently, it is inexcusable that anyone should not have the financial means to get this share.

The word, "needy", should not exist in the vocabulary of Canadians. Even less should it ever be applied to the condition of one single citizen of this country.

The inability to pay when there is question of the necessities of life, proves that our economic system is defective. It is effective, not with respect to the production of goods and services, of which there is an abundant supply, but with respect to the financial system which has not yet found a way to put into the hands of every citizen the means with which to obtain a share of these goods and services.

The first care of the government should be to correct this grievous fault in the financial system. It does more harm than good for the government to try and mitigate an evil by poking into a sphere of the country's life in which it has no business interfering.

Neither individuals nor private associations can reform the financial system. This is the duty of the government. Let the government do this and then individuals, associations and private enterprise will be able to do the rest without government intervention.

That is the idea we have expressed at the head of this article.

Financial insurance for all with the liberty for each one to use that insurance according to his choice, in place of state health insurance with its taxes, investigations and restrictions of all sorts.

It is because the financial system is at fault that our economic system does not fulfill its true purpose, a purpose, very clearly defined by His Holiness, Pope Pius XI: "To procure for all a share of the goods which nature and industry are capable of procuring for them, a share which should be sufficient at least to permit them to live decently."

If nature and industry are capable then why is finance not also capable?

Remedies

Hospital care and medicines are very expensive today. As a result, the premiums of private insurance must follow the rise; that is inevitable. State insurance likewise would follow suit in contributions and general taxes. As long as there were improvements in services, and laboratory products were perfected, it is not unreasonable that they should be more costly. But since these things are possible and practical, the means of paying for them should also be possible and practical. The financial part should resemble the physical and real part. It should be just as capable of realization.

There is, however, in the cost price an element which should not be there — the robber's share, For example, the interest charges on the financing of construction. If finance were made to conform to reality all new production would be financed by new credits and the return and cancellation of these credits would be effected in the same measure as the new production was consumed either through depreciation or some other means. This would be a Social Credit financial system, but, even if Social Credit is not adopted outright, the province and the organizations which build hospitals should obtain their loans from the Bank of Canada without interest charges, repaying over a period of years only the amount of the loan. This would not mean an escape from the existing financial system; it would simply mean using the bank instituted for Canadians, which should serve Canada and preserve them from the necessity of going to those financial houses which wax fat on the toil of the people. This alone would be a marked improvement and would decrease hospital expenses.

Furthermore, it is about time we recognized the fact that if each person has the right to live, he has also a right to share in what he needs in order to live. Today that means he must have a personal revenue attached to his person, not linked to his position in the production line.

Crediters call this revenue a dividend. It is periodic and is issued to every one. It is called a dividend because it gives to its holder a right to a revenue from a common capital which capital is the principal factor in modern production.

This capital is the immense heritage of inventions, of applied science, of technical progress, all bequeathed to us by preceding generations. It is a real capital which belongs to everyone because no one living person earned it. And since it is to this very real capital rather than to any other factor that we owe abundant modern production, the dividend issued to each citizen should be sufficient to guarantee him the essentials of life.

Such a financial insurance would at once insure a distribution of purchasing power which would in turn relieve the government of the necessity of interfering in every aspect of life, taxing one to give a pittance to another to the profit of no one but those who are becoming rich under the present regime — the financiers.

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