The advocacy group Health Care for America Now was the first to bring the action to widespread attention. “Even for the insurance industry this behavior is surprisingly brazen,” HCAN Executive Director Ethan Rome wrote in a blog entry for the Huffington Post. “They don’t like the rules, so they’re going to take their ball and go home.”
But the insurance industry trade group America’s Health Insurance Plans rejected HCAN’s contention that the companies’ refusal to sell to all comers is somehow a violation of a promise made earlier this year by AHIP CEO Karen Ignagni that insurance companies would comply with regulations regarding children and pre‐existing conditions.
In an interview, AHIP spokesman Robert Zirkelbach said Ignagni was responding only to promises that children wouldn’t be excluded from their parents’ plans and that if the kids are covered, the policies would include treatment of their pre‐existing condition.
What emerged in the regulations, however, Zirkelbach said, was, in effect, a requirement that insurance companies accept children even if they are already sick. That, he said, would be tantamount to exactly what companies want to avoid with the adult population — letting people wait until they are sick to sign up for insurance. Which is exactly why the insurance industry is so insistent on a coverage mandate: It needs premiums of healthy people to help cover the costs of those who are not.
In effect, ObamaCare supporters said to the public, “Give the government more power over insurance companies and the government will make health insurance more accessible and secure.” These few paragraphs capture how that strategy has turned into a cat‐and‐mouse game with insurers, and is turning ObamaCare’s most attractive selling point — guaranteed coverage for kids with pre‐existing conditions — into an empty promise.
In stark contrast stands the individual insurance market. Yes, insurers there generally (but not always) charge premiums that correspond to risk, and sometimes turn people down — but that market has also been remarkably innovative when it comes to protecting sick people from higher premiums. RAND Health economist Susan Marquis and her colleagues write, “a large number of people with health problems do obtain coverage” in the individual market: “Our analysis confirms earlier studies’ findings that there is considerable risk pooling in the individual market and that high risks are not charged premiums that fully reflect their higher risk.” Even as Congress debated ObamaCare, UnitedHealthcare introduced an innovative new product that protects people with employer‐sponsored coverage from facing sky‐high premiums when they leave their company plan. Economist John Cochrane predicts that further innovations can make health insurance more secure and improve the quality of medical care.
Which process seems more likely to improve quality and reduce costs? The political process, where politicians and regulators try to force insurance companies to act against their financial self‐interest? Or the market process, where self‐interest forces insurers to find innovative ways to give consumers more of what they want?
The Government Accountability Office released Congressional testimony this week looking at Temporary Assistance for Needy Families. TANF, which replaced unrestricted welfare in 1996, has reduced welfare rolls and encouraged recipients to obtain work. Unfortunately, TANF’s goals have been undermined.
The GAO notes that “work participation rates … do not appear to be achieving the intended purpose of encouraging states to engage specified proportions of TANF adults in work activities.”
States are required to have at least 50 percent of eligible TANF recipients from single parent families participating in work activities. However, states are given various credits and exemptions that significantly reduce the number of recipients required to work. As a result, only about 30 percent of TANF recipients engage in “work activities,” which is often liberally defined. (This has been the case before and during the recession.)
Moreover, while TANF has successfully reduced the budgetary cost of cash‐welfare, overall federal spending on anti‐poverty programs has increased dramatically. According to a chart from Brian Riedl, anti‐poverty spending has increased an inflation‐adjusted 89 percent over the present decade:
I previously discussed how TANF enrollment has dropped since its passage in 1996 while food stamp enrollment has greatly increased. A food stamp user interviewed by the New York Times indicates one reason for the trend:
‘It used to be easier to go on cash assistance,’ she said as she left a food stamp office in Brooklyn this month. ‘You didn’t have to go to work, you didn’t have to report every day to an office and sign in and sign out. Now, if you don’t go to those group job meetings in the mornings, they shut down your whole welfare case. So that’s why I just get food stamps.’
Not surprisingly, the cost of the food stamps program has gone through the roof:
The desirability of federal anti‐poverty programs in the midst of difficult economic times is a sensitive topic. However, with so many Americans currently in need of assistance, now is actually a good time to discuss the role of government in taking care of the less fortunate. As a Cato essay on welfare and Temporary Assistance for Needy Families argues, the federal government isn’t the best option.
Yesterday, I mentioned a recent report from the Justice Department’s Office of the Inspector General on some potentially improper instances of FBI monitoring of domestic anti‐war groups. It occurs to me that it also provides a useful data point that’s relevant to last week’s post about the pitfalls of thinking about the proper limits of government information gathering exclusively in terms of “privacy.”
As the report details, an agent in the FBI’s Pittsburgh office sent a confidential source to report on organizing meetings for anti‐war marches held by the anarchist Pittsburgh Organizing Group (POG). The agent admitted to OIG that his motive was a general desire to cultivate an informant rather than any particular factually grounded investigative purpose. Unsurprisingly, reports generated by the source contained “no information remotely relevant to actual or potential criminal activity,” and at least one report was “limited to identifying information about the participants in a political discussion together with characterizations of the contents of the speech of the participants.” The agent dutifully recorded that at one such gathering “Meeting and discussion was primarily anti anything supported by the main stream [sic] American.”
Now, in fact, the OIG suggests that the retention in FBI records of personally identifiable information about citizens’ political speech, unrelated to any legitimate investigation into suspected violations of federal law, may well have violated the Privacy Act. But if we wanted to pick semantic nits, we could surely make the argument that this is not really an invasion of “privacy” as traditionally conceived — and certainly not as conceived by our courts. The gatherings don’t appear to have been very large — the source was able to get the names and ages of all present — but they were, in principle, announced on the Web and open to the public.
Fortunately, the top lawyer at the Pittsburgh office appears to have been duly appalled when he discovered what had been done, and made sure the agents in the office got a refresher training on the proper and improper uses of informants. But as a thought experiment, suppose this sort of thing were routine. Suppose that any “public” political meeting, at least for political views regarded as out of the mainstream, stood a good chance of being attended by a clandestine government informant, who would record the names of the participants and what each of them said, to be filed away in a database indefinitely. Would you think twice before attending? If so, it suggests that the limits on state surveillance of the population appropriate to a free and democratic society are not exhausted by those aimed at protecting “privacy” in the familiar sense.
Quoting great classical liberal minds such as Milton Friedman, Gary Becker and Mario Vargas Llosa, Spain’s former drug Czarina Araceli Manjón‐Cabeza endorsed drug legalization today in a compelling op‐ed [in Spanish] published in El País, Spain’s leading newspaper. Just a week earlier, Felipe González, Spain’s former Primer Minister, also came out in support of drug legalization.
Manjón‐Cabeza takes particular aim at the UN International Narcotics Control Board for its criticisms of the different decriminalization and harm‐reduction policies implemented in recent years in Argentina, Mexico, Brazil, and Spain, among other countries. She calls the INCB’s views “inadmissible.”
She concluded by calling prohibition a “savage and inefficient instrument that is not the ‘solution’ but instead a big part of the problem.” Manjón‐Cabeza says that insisting on prohibitionist policies amounts to “insanity.” Finally, some common sense talk from a former drug czar.
In the wake of Senate Democrats’ inability to break a GOP filibuster of the defense appropriations bill, to which Democrats hoped to attach the pro‐immigration Dream Act and a repeal of the military’s “don’t ask, don’t tell” policy, the Reason Foundation’s Shikha Dalmia writes in Forbes:
But if Harry Reid was the proximate cause of this bill’s demise, ObamaCare was the fundamental cause. The ugly, hardball tactics that Democrats deployed to shove this unpopular legislation down everyone’s throat have so poisoned the well on Capitol Hill that Democrats have no good will left to make strategic alliances on even reasonable legislation anymore. When a party has such huge majorities, even small gestures of reconciliation are enough to splinter the ranks of opponents and obtain cooperation. But Democrats played the game of our way or the highway with ObamaCare, ignoring warnings that this would render them completely impotent for the rest of President Obama’s term. Indeed, Republican Senator Lindsey Graham of South Carolina,who had been working with Senator Chuck Schumer of New York to craft comprehensive immigration reform, gave up in disgust in the wake of ObamaCare.
How ironic that a president who got elected on the promise of bipartisan comity has produced nothing but partisan rancor. And his signature legislation that was supposed to save America’s most vulnerable has begun by throwing them under the bus.
Dalmia assigns Republicans their (ample) share of the blame, too. Read the whole thing.
You’ve probably heard it already, but if not, you should know that on Friday the documentary Waiting for “Superman” — from An Inconvenient Truth director Davis Guggenheim — will be opening in select theaters around the country. The film, about how hard it is to access good education in America thanks to adults putting their interests first, follows several children as they hope beyond hope to get into oversubscribed charter schools. It is said by those who’ve seen it to be a tear‐jerker and call to arms to substantially reform American education.
Unfortunately, the film doesn’t promote real, essential reform: Taking money away from special‐interest dominated government schools and letting parents control it.
The movie does flirt — from what I know, that is, without having yet seen it — with school choice, lionizing charter schools. But let’s not forget that while many charter schools and their founders have tremendous vision and drive, charters are still public schools, and as such are easily smothered by politically potent special interests like teacher unions. Moreover, while charter schools are chosen, charter schooling still keeps money — and therefore power — out of the hands of parents. Together, these things explain why there are so many heartbreaking charter lotteries to film: there is almost no ability or incentive to scale up good schooling models to meet all the desperate demand.
But isn’t the goal for no child to have to wait for Superman? If so, then why not give parents the power to choose good schools (and leave bad ones) right now by instituting widespread school choice? Indeed, we’re quickly losing room in good institutions because parochial schools – which have to charge tuition to stay in business — simply can’t compete with “free” alternatives. If we were to let parents control education funds immediately, however, they could get their kids into those disappearing seats while the seats are still around, and we would finally have the freedom and consumer‐driven demand necessary to see good schools widely replicated.
Unfortunately, Waiting for “Superman” doesn’t just seem to want to make people wait for good schools by promoting charter schools and not full choice. On its “take action” website, it prominently promotes the very opposite of parent empowerment: Uniform, government‐imposed, national standards for every public school in America.
Rather than let parents access the best curriculum for their unique children, the Waiting for “Superman” folks want to give the federal government power. Of course, the website doesn’t say that Washington will control “common” standards, but make no mistake: Federal money has been driving the national standards train, and what Washington funds, it ultimately controls. And there is no better way to complete the public schooling monopoly — to let the teacher unions, administrator associations, and other adult interests do one‐stop shopping for domination — than to centralize power in one place.
The people behind Waiting for “Superman” are no doubt well intentioned, and their film worth seeing. But pushing kryptonite is pushing kryptonite, and it has to be stopped.