By: Andrea Castillo
At this point, as Florida State University students, the majority of us are pretty familiar with the idea of an “insurance mandate” regardless of whether or not we actually have our individual health insurance policies, or subscribe to FSU’s health insurance plan. While the contentious legislative debate about how our troubled health care system should be fixed seems to have largely settled, the most popular bill that emerged from the debate is dependent on the axiom that citizens should be required to purchase their own health insurance plans (the mandate) in order to promote the good of society.
While pundits from both sides of the political spectrum were preoccupied by a strenuous game of Capitalism versus Socialism, no one noticed when a more-than-average amount of health insurance company executives, labor union leaders, and lobbyists paid many visits to their chums on Capitol Hill. This lobbying was not limited to one political party. The debate on health care led to a type of “bipartisanship” which is only possible when money flows in waves into Washington D.C. Unfortunately, for the average citizen, this health care bill may prove itself to be one of the more bipartisan ones in recent memory.
Because of all of this so-called bipartisanship, our Congress decided to write a bill that does not favor the ordinary citizen. However, it does ensure a steady source of new clients and revenue for the big insurance companies and health care providers. With this proposed legislation, not only will the government protect insurance companies with regulations that act as barriers to entry for would-be competitors (as it does currently does), politicians are now going the extra mile and promising these companies a perpetual and legally obligated paycheck from American citizens who will be made into criminals and fined if they do not comply with the mandate. The government has essentially stated that it will use its monopoly on violence to make sure that you and I purchase the services of Humana or Blue Cross Blue Shield. Don't worry though, they tell us that they are doing it for our own good.
In 2007, the Florida State University administration, in congruence with the Florida legislature, amended its policy to require that all new students either purchase private insurance or enroll in the new university health insurance option. Contrary to popular thought, our friendly university employees actually aren't the same people who administer and manage our university health insurance plan. In reality, the university administration found it wiser to outsource to a private company that is already well-established and knowledgeable in the market: Blue Cross Blue Shield. You might have thought that your university health insurance plan had the advantage of avoiding an unnecessary and profit-reaping middleman, but ultimately, at the end of the day, your money ends up in the pockets of big health insurance. You should feel a warm tinge of pride upon knowing that your university led the charge for institution-mandated health insurance years before its time.
Unfortunately, we FSU students are not afforded to choice to decide whether or not paying for health services makes financial sense for our budgets. We are forced for pay $1,440 per year regardless. Because of this, FSU students find themselves paying a higher tuition at $17,880 per year than UF students do at $17,025 per year even though our schools' curriculum are identical. The people who supported this policy twiddled their thumbs and sheepishly defended the increase in cost, suggesting that it was only a 5% to 7% increase in tuition.
The Florida legislature, supported by our own Student Government Association (SGA) and Florida State University Office of Legislative Affair's official lobbyist, is currently musing over whether to impose this same burden of mandated health insurance on the students of all Florida public universities. The sponsors of the proposed legislation state that they aim to “improve universities’ ability to negotiate insurance policies, reduce the number of students who withdraw from college for medical reasons, and reduce the burden of uncompensated care on community health facilities.” Have they stopped to ask themselves why universities, institutions of higher learning, have taken it upon themselves to act like hospitals in the first place?
Personally, I expect to struggle with my studies; I don't see a reason to struggle with my ability to pay for health insurance before I can have the opportunity to study. Perhaps enacting this type of reform would improve university relations with various insurance providers, and maybe make some people feel good about somehow helping the disadvantaged, but I personally am not enrolled in college so that I can score a sweet insurance premium. If a student cannot afford to attend college because of these new extraneous health costs, for what purpose is the pursuit of higher education anyways? I'm sure the executives of Blue Cross Blue Shield are happy with the current situation, but perhaps university officials and SGA should try to put themselves in the shoes of students who already struggle with day-to-day expenses and have to struggle to pay for mandated health insurance.
Monday, February 1, 2010
Health Care and the Free Market
By: Patrick O’Sullivan
Lately it has been asserted by many politicians, pundits, and political spectators that the problems with the health care system in the United States are ills caused by and related to a “free market” in health care. However, the health care system that the United States has today is far from anything that resembles a “free market.” There are several examples that illustrate this.
As it stands today, the United States has the third highest public spending on health related expenses per capita in the world. Hidden in this statistic is the fact government insurance programs (Medicare, Medicaid) cover about 27% of the population. Add to this the fact that government spending on 27% of the population account for around 45% of total health spending in the United States. The point is that this is a large amount of money that the government is injecting into the health care market, which ultimately alters the dynamic of the market.
The government also directly involves itself in the health care market by encouraging certain behaviors. In particular, current federal policy treats employer funded health benefits as tax-exempt. Such policies encourage employers to shift a disproportionate amount of employee salaries toward health care insurance benefits, which incentivizes often wasteful insurance plans. Incentivizing a system of health insurance, supplied by employers, tends to create more problems in the market than it fixes.
People often do not spend the money of others as well as they do their own. For example, how do you think your own grocery shopping habits would change if you paid a flat, monthly rate for your groceries no matter what you bought? Would you care to compare the cost effectiveness and opportunity costs associated with different items? If you pay the same monthly rate either way, wouldn’t it seem silly to choose the store brand chocolate syrup over your preferred brand just because it’s two dollars cheaper? What will it matter, right? It’s just two dollars.
These problems are also evident in government incentivized, employer supplied health insurance. These problems tend to promote a distortion in the price system.
Does this mean that all insurance is bad? Of course not. Insurance is necessary to cover catastrophic and unlikely events. Much like people do not buy plans to cover routine everyday purchases like groceries, gasoline, clothing, oil changes, most people would not buy health insurance to cover routine doctor visits if they had a viable alternative.
That alternative is health savings accounts (HSA). If we had a truly free market in health care provision, without government spending or incentivizing, it would be one where people planned to pay for their own routine care, and took out insurance policies just to mitigate potential catastrophes. What I'm advocating, in essence, is the idea of most people should open savings accounts and save money for just routine, mundane doctor visits. These health savings accounts would be paired with high deductible health insurance which would only cover catastrophic illnesses like cancer or other possibly expensive diseases. The idea of high deductible catastrophic insurance mixed with HSAs is, essentially, just like the Whole Foods model promoted by Whole Foods CEO John Mackey. It's also similar to the model in Singapore, where the government deducts payroll income and automatically deposits it into employees' personal HSAs.
Whole Foods employees, by and large, are very happy with their health care coverage, and Singapore currently has the lowest infant mortality rate in the world, and one of the highest life expectancies of any nation.
Wherever HSAs matched with catastrophic insurance plans, have been embraced, they have brought down costs and improved health care quality. In order to see such results, the U.S. government should stop incentivizing bad behavior by emphasizing employer provided, health benefits, and then work to further remove itself from the health care market wherever and whenever possible. The market cannot begin to correct the health care crisis until it is free from government intervention.
Lately it has been asserted by many politicians, pundits, and political spectators that the problems with the health care system in the United States are ills caused by and related to a “free market” in health care. However, the health care system that the United States has today is far from anything that resembles a “free market.” There are several examples that illustrate this.
As it stands today, the United States has the third highest public spending on health related expenses per capita in the world. Hidden in this statistic is the fact government insurance programs (Medicare, Medicaid) cover about 27% of the population. Add to this the fact that government spending on 27% of the population account for around 45% of total health spending in the United States. The point is that this is a large amount of money that the government is injecting into the health care market, which ultimately alters the dynamic of the market.
The government also directly involves itself in the health care market by encouraging certain behaviors. In particular, current federal policy treats employer funded health benefits as tax-exempt. Such policies encourage employers to shift a disproportionate amount of employee salaries toward health care insurance benefits, which incentivizes often wasteful insurance plans. Incentivizing a system of health insurance, supplied by employers, tends to create more problems in the market than it fixes.
People often do not spend the money of others as well as they do their own. For example, how do you think your own grocery shopping habits would change if you paid a flat, monthly rate for your groceries no matter what you bought? Would you care to compare the cost effectiveness and opportunity costs associated with different items? If you pay the same monthly rate either way, wouldn’t it seem silly to choose the store brand chocolate syrup over your preferred brand just because it’s two dollars cheaper? What will it matter, right? It’s just two dollars.
These problems are also evident in government incentivized, employer supplied health insurance. These problems tend to promote a distortion in the price system.
Does this mean that all insurance is bad? Of course not. Insurance is necessary to cover catastrophic and unlikely events. Much like people do not buy plans to cover routine everyday purchases like groceries, gasoline, clothing, oil changes, most people would not buy health insurance to cover routine doctor visits if they had a viable alternative.
That alternative is health savings accounts (HSA). If we had a truly free market in health care provision, without government spending or incentivizing, it would be one where people planned to pay for their own routine care, and took out insurance policies just to mitigate potential catastrophes. What I'm advocating, in essence, is the idea of most people should open savings accounts and save money for just routine, mundane doctor visits. These health savings accounts would be paired with high deductible health insurance which would only cover catastrophic illnesses like cancer or other possibly expensive diseases. The idea of high deductible catastrophic insurance mixed with HSAs is, essentially, just like the Whole Foods model promoted by Whole Foods CEO John Mackey. It's also similar to the model in Singapore, where the government deducts payroll income and automatically deposits it into employees' personal HSAs.
Whole Foods employees, by and large, are very happy with their health care coverage, and Singapore currently has the lowest infant mortality rate in the world, and one of the highest life expectancies of any nation.
Wherever HSAs matched with catastrophic insurance plans, have been embraced, they have brought down costs and improved health care quality. In order to see such results, the U.S. government should stop incentivizing bad behavior by emphasizing employer provided, health benefits, and then work to further remove itself from the health care market wherever and whenever possible. The market cannot begin to correct the health care crisis until it is free from government intervention.
A DIFFERENT TAKE
Election in Massachusetts Reveals Increasing Frustration with Gypsies
By: G.T. Johnson
The national debate over universal healthcare coverage for gypsies may have hit its climax with the Massachusetts special election to fill the senate seat vacated by the late Edward Kennedy. A victory by Attorney General Martha Coakley would have given Harry Reid the 60th vote he needed to pass the controversial GypsyCare through the Senate. However, the key vote was lost in the victory by anti-gypsy candidate Scott Brown, who previously gained national attention in 1954 when he filed suit against the Board of Education of Topeka and paved way for the integration of public schools. Brown’s victory in a state like Massachusetts reflects the increasing frustration that citizens across the country have revealed towards gypsies and their shenanigans.
In cities such as New York, people who regularly walk to work have been taking longer, less convenient routes in order to avoid packs of these mysterious vagabonds. A 29 year-old investment banker working in Manhattan has been warning friends and co-workers about the very real threats posed by gypsies, especially the young ones. “Gypsy children seem really cute at first because they’re colorful and look like the little boys from Hook. You really can’t help from clapping your hands and dancing when they surround you on the streets. But by the time you get home you realize your wallet is stolen, your bank account is wiped out, and you’re facing foreclosure.”
In the last decade, gypsy thievery has left thousands of people unable to pay their mortgage, and polls show that 78% of Americans name the resulting housing collapse and economic recession as the largest annoyance they have had to put up with. This causes many to passionately reject the notion of free health coverage for gypsies, which has become the hottest issue since President Obama took office. Health insurance providers frequently deny coverage to gypsies and powerful gypsy unions have been lobbying Washington for years to pass some sort of government funded coverage plan. Backers of this plan are now pointing to the earthquake in Haiti as what might happen when you do not give gypsies what they want. “I heard Pat Robertson talk about a deal that Haiti made with the gypsies some time ago, and this earthquake was the result of some gypsy curse,” remarked a GypsyCare supporter in Boston. “I think that sounds about right. Haiti’s probably a place where stuff like that happens.”
Evident by Scott Brown’s victory, Massachusetts voters do not see GypsyCare as a solution. They point to the state level healthcare program signed into law by Mitt Romney which provided free healthcare to all gypsies in Massachusetts. The idea was that gypsies would be satisfied by high quality healthcare at zero cost, but results have not been promising. On the campaign trail Scott Brown explained, “You think a trip to the doctor’s office is going to quell a gypsy’s child-like impulse to steal? Only if it comes with your watch, wedding ring, and youngest child.”
By: G.T. Johnson
The national debate over universal healthcare coverage for gypsies may have hit its climax with the Massachusetts special election to fill the senate seat vacated by the late Edward Kennedy. A victory by Attorney General Martha Coakley would have given Harry Reid the 60th vote he needed to pass the controversial GypsyCare through the Senate. However, the key vote was lost in the victory by anti-gypsy candidate Scott Brown, who previously gained national attention in 1954 when he filed suit against the Board of Education of Topeka and paved way for the integration of public schools. Brown’s victory in a state like Massachusetts reflects the increasing frustration that citizens across the country have revealed towards gypsies and their shenanigans.
In cities such as New York, people who regularly walk to work have been taking longer, less convenient routes in order to avoid packs of these mysterious vagabonds. A 29 year-old investment banker working in Manhattan has been warning friends and co-workers about the very real threats posed by gypsies, especially the young ones. “Gypsy children seem really cute at first because they’re colorful and look like the little boys from Hook. You really can’t help from clapping your hands and dancing when they surround you on the streets. But by the time you get home you realize your wallet is stolen, your bank account is wiped out, and you’re facing foreclosure.”
In the last decade, gypsy thievery has left thousands of people unable to pay their mortgage, and polls show that 78% of Americans name the resulting housing collapse and economic recession as the largest annoyance they have had to put up with. This causes many to passionately reject the notion of free health coverage for gypsies, which has become the hottest issue since President Obama took office. Health insurance providers frequently deny coverage to gypsies and powerful gypsy unions have been lobbying Washington for years to pass some sort of government funded coverage plan. Backers of this plan are now pointing to the earthquake in Haiti as what might happen when you do not give gypsies what they want. “I heard Pat Robertson talk about a deal that Haiti made with the gypsies some time ago, and this earthquake was the result of some gypsy curse,” remarked a GypsyCare supporter in Boston. “I think that sounds about right. Haiti’s probably a place where stuff like that happens.”
Evident by Scott Brown’s victory, Massachusetts voters do not see GypsyCare as a solution. They point to the state level healthcare program signed into law by Mitt Romney which provided free healthcare to all gypsies in Massachusetts. The idea was that gypsies would be satisfied by high quality healthcare at zero cost, but results have not been promising. On the campaign trail Scott Brown explained, “You think a trip to the doctor’s office is going to quell a gypsy’s child-like impulse to steal? Only if it comes with your watch, wedding ring, and youngest child.”
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