The Obamacare Giveaway, Connecticut Edition: Earn $62k and Get Health Insurance for less than $58/Year

Several days ago, I pointed out that a married couple earning $62,000 in Wisconsin could get health insurance under Obamacare with no monthly premiums. Now it’s time to move onto Connecticut. Connecticut runs its own exchange, known as access health CT.

Among the 114,000 individuals aged 55 to 64 in Fairfield County, Connecticut, roughly two-thirds – or 77,000 people – rely on employer coverage, where the odds are high that they’re paying something out of their own pocket for monthly premiums.

Consider married couple earning $62,000. Each is 64-years-old, a non-smoker, and lives in Fairfield County, Connecticut. The structure of Obamacare subsidies means that many individuals who are not poor can find health plans with such large subsidies that they pay virtually nothing for premiums out of their own pocket. In this case, the couple would qualify for the HealthyCT Bronze Basic HSA 1 Plan for $4.79 per month in premium – or $2.40 per month for each person in that household. If the couple chooses this plan, it pays less than 0.1% of its total income towards health care premiums. That’s not a typo – and it doesn’t say one percent – the household would pay one-tenth of one percent of their income towards premiums. Subsidies pay for more than 99% of the monthly premium.

See the graphic below for this married couple:

Sen. Murray and the “No Evidence for School Choice” Canard

There are many good reasons to oppose a federal school voucher program, but a supposed lack of evidence that school choice improves student outcomes isn’t one of them. Sadly, Sen. Patty Murray (D-WA), the ranking minority member of the U.S. Senate’s education committee, repeated this canard during the debates over a proposed amendment that would have added a federal school voucher program to the No Child Left Behind replacement bill:

What’s more, studies of voucher programs in Milwaukee and the District of Columbia have shown that they do not improve students’ academic achievements, she said. “Study after study has shown that vouchers do not pay off for students or taxpayers,” Murray said. 

That’s simply not true. According to Dr. Patrick Wolf, coauthor of the only longitudinal study of the effect of Milwaukee’s voucher program, “school choice in Milwaukee has had a modest but clearly positive effect on student outcomes.”

First, students participating in the Milwaukee Parental Choice (“voucher”) Program graduated from high school and both enrolled and persisted in four-year colleges at rates that were four to seven percentage points higher than a carefully matched set of students in Milwaukee Public Schools. Using the most conservative 4% voucher advantage from our study, that means that the 801 students in ninth grade in the voucher program in 2006 included 32 extra graduates who wouldn’t have completed high school and gone to college if they had instead been required to attend MPS.

Second, the addition of a high-stakes accountability testing requirement to the voucher program in 2010 resulted in a solid increase in voucher student test scores, leaving the voucher students with significantly higher achievement gains in reading than their matched MPS peers.

In the final year of the study, Milwaukee voucher students in grades 3-9 performed about 15 percent of a standard deviation higher on standardized reading tests, “a modest but meaningful educational difference.” Moreover, the study concluded that Milwaukee district-school students were “performing at somewhat higher levels as a result of competitive pressure from the school voucher program.” And contrary to Sen. Murray’s assertion that “vouchers do not pay off for taxpayers,” the study found that the voucher program saved the state nearly $52 million in fiscal year 2011 because the vouchers were worth about half of the cost per-pupil at the district schools.

The Most Racist Urban Area in America?

Yesterday, the Department of Housing and Urban Development (HUD) approved a new fair housing rule called Affirmatively Furthering Fair Housing. This follows the Supreme Court’s recent ruling allowing HUD to use disparate impact as a criterion for determining whether a community is guilty of unfair housing practices.

 Wikimedia photo by Bernard Gagnon.

In one form of disparate impact analyses, HUD compares the racial makeup of a city or suburb with the makeup of the urban area as a whole. If the city doesn’t have enough minorities, it is presumed guilty and must take steps to attract more. Under the Affirmatively Furthering Fair Housing rule, that could mean subsidizing low-income housing or rezoning land for high-density housing.

While I have no doubt that prejudice is still a factor in housing in America, there are many other factors that influence the distribution of people across an urban area. These include religion, education, and personal tastes in food, recreation, and other activities. For example, low-income families with children will be more likely to live near a Walmart Supercenter while high-income families with no children will be more likely to live near a Whole Foods. To expect every suburb, most of whose borders are based on little more than historical accidents, to have a perfect mix of races is absurd.

When Battling the Government In Court, What Are You Free To Say in the Press?

Readers who follow the battles over forfeiture law may recall the recent case in which a North Carolina convenience store owner from whom the government had seized $107,000 without any showing of wrongdoing decided to fight the case in the press as well as in court, backed by the Institute for Justice. Lyndon McLellan’s decision to go public with the dispute drew a menacing letter from a federal prosecutor about the publicity the case had been getting:

“Your client needs to resolve this or litigate it,” Mr. West wrote. “But publicity about it doesn’t help. It just ratchets up feelings in the agency.” He concluded with a settlement offer in which the government would keep half the money.

That case ended happily, but the problem is much broader: many individuals and businesses fear that if they seek out favorable media coverage about their battle with the government, the government will find a way to retaliate, either informally in settlement negotiations or by finding new charges to throw against them.

That such fears might not be without foundation is illustrated by last week’s widely publicized Oregon cake ruling, in which a Gresham, Oregon couple was ordered to pay $135,000 in emotional-distress damages for having refused to bake a cake for a lesbian couple’s commitment ceremony. Aside from the ruling’s other objectionable elements, the state labor commissioner ruled it “unlawful” for the couple to have given national media interviews in which they expressed sentiments like “we can see this becoming an issue and we have to stand firm.” Taking advantage of an exception in free speech law in which courts have found that the First Amendment does not protect declarations of future intent to engage in unlawful discrimination, the state argued – and its commissioner agreed – that the “stand firm” remark along with several similarly general comments rallying supporters were together “unlawful.”

That ought to bother anyone who cares about free speech. I’ve got a piece up at Ricochet.com, my first there, exploring the question in more detail. Check it out.  

 

Yet More Empirical Evidence That Yes, Federal Student Aid Fuels College Price Inflation

For a few years, I have been posting an evolving list of empirical studies that have found that federal student aid programs help fuel rampant college price inflation. Why? Because I continually encounter people, often who work for or in higher education, who insist that there is no meaningful empirical evidence of big subsidies enabling big price increases, even if the possibility makes mammoth intuitive and theoretical sense.

A few days ago a new entry arrived for the list, a paper from the Federal Reserve Bank of New York. It finds that student loans have big inflationary effects, especially at four-year private schools not focused on top academic performers, and that Pell Grants have smaller direct effects, but also likely lead to reductions in aid funded by institutions. It is yet one more study that shows that, contrary to the hopes of the American Council on Education–the premiere higher ed advocacy group–the inflationary effect of student aid is absolutely a subject that should “play a major role” in discussions about college affordability.

And now, the updated list:

David O. Lucca, Taylor Nadauld, and Karne Shen, “Credit Supply and the Rise in College Tuition: Evidence from the Expansion in Federal Student Aid Programs,” Staff Report No. 733, July 2015.

Dennis Epple, Richard Romano, Sinan Sarpça, and Holger Stieg, “The U.S. Market for Higher Education: A General Equilibrium Analysis of State and Private Colleges and Public Funding Policies,” NBER Working Paper No. 19298, August 2013.

Lesley J. Turner, “The Incidence of Student Financial Aid: Evidence from the Pell Grant Program,” Columbia University, April 2012.

Stephanie Riegg Cellini and Claudia Goldin, “Does Federal Student Aid Raise Tuition? New Evidence on For-Profit Colleges,” NBER Working Paper No. 17827, February 2012.

Nicholas Turner, “Who Benefits from Student Aid? The Economic Incidence of Tax-Based Federal Student Aid,Economics of Education Review 31, no. 4 (2012): 463-81.

Bradley A. Curs and Luciana Dar, “Do Institutions Respond Asymmetrically to Changes in State Need- and Merit-Based Aid? ” Working Paper, November 1, 2010.

John D. Singell, Jr., and Joe A. Stone, “For Whom the Pell Tolls: The Response of University Tuition to Federal Grants-in-Aid,” Economics of Education Review 26, no. 3 (2006): 285-95.

Michael Rizzo and Ronald G. Ehrenberg, “Resident and Nonresident Tuition and Enrollment at Flagship State Universities,” in College Choices: The Economics of Where to Go, When to Go, and How to Pay for It, edited by Caroline M. Hoxby, (Chicago, IL: University of Chicago Press, 2004).

Bridget Terry Long, “How Do Financial Aid Policies Affect Colleges? The Institutional Impact of Georgia Hope Scholarships,” Journal of Human Resources 30, no. 4 (2004): 1045-66.

Rebecca J. Acosta, “How Do Colleges Respond to Changes in Federal Student Aid,” Working Paper, October 2001.

Is U.S. Women’s Soccer Getting Shortchanged?

The U.S. Women’s World Cup team is back from Canada with victory in its players’ pockets, but not much else, to judge from media reports now unfolding. The question just above led a CBS Evening News story tonight about the gross income inequality between male and female professional soccer players—and in today’s battle between the sexes, few issues are more demagogued or more inflame the adversarial passions than inequality between the sexes. Indeed, we’re told that star goalie Hope Solo took a picture of one fan’s sign calling for equal pay for women athletes. Say no more.

But more was said, and the facts speak volumes. It seems that the women’s team will split $2 million for their victory whereas the winner of last year’s Men’s World Cup team, Germany, was awarded $35 million. The prizes, however, are based on revenue, says FIFA, which runs the World Cups, and the facts here are stark:

This year’s figures have not been released, but four years ago the Women’s World Cup brought in almost $73 million. The 2010 Men’s World Cup in South Africa made almost $4 billion. Those players got $348 million, or 9 percent of the total revenue. The women’s team got a higher percentage with 13 percent, but the bottom line was still much less, $10 million.

But don’t let those facts get in the way of sound egalitarian reasoning. We get that from Deborah Slaner Larkin with the National Women’s Sports Foundation:

We shouldn’t keep deciding who’s more important, our sons or our daughters, our husbands or our wives. People should be treated equally. We need to have some more male allies who will say this is not acceptable.

Not acceptable? If so, then what’s to be done? It’s unclear since we learn here that two women’s soccer leagues have already failed in the U.S. and the current one, the National Women’s Soccer League, averages only about 4,400 spectators a game. If you think this a tempest in a teapot, think again. It’s a microcosm, with a thousand and one more complex variations, of the debate that lies ahead in the political season that’s already under way.

Topics:

E-Verify Simply Does Not Work

Nearly twenty years ago, John J. Miller of the Center for Equal Opportunity and Stephen Moore, then the director of fiscal policy studies at the Cato Institute, published a study responding to the rising demand for immigration law enforcement.

A National ID System: Big Brother’s Solution to Illegal Immigration” was the name of their Cato Institute policy analysis. They highlighted costs to the liberty of native-born Americans from systems that seek to root out illegal immigrants with identity cards and tracking. I reprised their study in a way and expanded on it seven years ago in “Electronic Employment Eligibility Verification: Franz Kafka’s Solution to Illegal Immigration.”

When I saw Alex Nowrasteh’s research into the results of mandates to use the Department of Homeland Security’s E-Verify program, I was delighted to see what experience makes available to backers of “internal enforcement” who don’t have our nation’s freedoms in mind. E-Verify simply does not work. That’s the upshot of our new study, “Checking E-Verify: The Costs and Consequences of a National Worker Screening Mandate.”