Patriot Post Vol. 07 No. 13 | 30 March 2007
BUSINESS & ECONOMY
Inflating the numbers of uninsured
A recent report by the U.S. Census Bureau concludes that nearly two million fewer Americans are uninsured than previously thought, with the number standing at 44.8 million as opposed to 46.6. Even the revised data could be overestimating the actual uninsured population by as much as 23 million. For instance, most uninsured remain so only temporarily; the Census Bureau’s numbers assume the opposite.
Nevertheless, the inflated numbers provide fodder for political promises to rescue the uninsured, particularly children. Fulfilling these pledges, however, carries a high price. The Council on Affordable Health Insurance (CAHI) estimates that congressional healthcare mandates, which have become ever more burdensome over the last 40 years, have inflated the costs of coverage by as much as 50 percent.
In its push to insure children, however, House Democrats have suggested sacrificing seniors by cutting payments to Medicare managed-care plans for the elderly to provide coverage for uninsured children. Yet, the real issue is not a values choice between young and old but the underlying assumption that government is responsible for insuring Americans. When we rely on Big Brother to take care of us, we always get a raw deal.
World ends, Democrats’ constituency hardest hit
The Washington Post recently reported on the recent death of a 12-year-old boy from a tooth infection that spread to his brain. The Post attributes his death to racial and socioeconomic disparities in access to healthcare. Yet his tragic death was not because he was of particular ethnicity or socioeconomic status. He died because he was a victim of government healthcare.
Due to the federal government’s outrageously low reimbursement rates and bureaucratic labyrinth, the boy’s family was unable to find a dentist that would accept the government coverage. The number of medical providers who refuse Medicare or Medicaid patients is far greater than most consumers realize, because many physicians don’t like being handcuffed by excessive government bureaucracy and artificially low government-reimbursement rates that cause a financial loss on nearly every medical procedure.
Hillary Clinton has promised to bring her government healthcare program to the unwashed masses. If she or other liberals are successful in socializing healthcare, look for more Americans to suffer and die from the tender mercies of a massive government bureaucracy.
Supreme Court takes MSRP case
Who should decide how much you pay for clothes and other retail goods? A case argued this week before the U.S. Supreme Court may hold the answer.
At issue is whether manufacturers may impose a price floor on retailers, under which they may not sell an item, or whether retailers may offer prices below the manufacturer’s suggested retail price. The Fifth Circuit Court of Appeals upheld the retailer’s right to offer discounted prices, based on a 1911 Supreme Court ruling that forbids manufacturers from requiring retailers to sell their products at a minimum price. That case found such price conditions to be so anti-competitive as to be violations of the Sherman Antitrust Act. Many consumer groups advocate retaining this rule, fearing its abolition would lead to price increases, though there would still be interbrand competition, if not intrabrand.
Business groups, however, joined by the White House, advocate more flexibility, and support the manufacturer’s objection to these restrictions on how it may market its product. The manufacturer contends that rather than a per se finding of anti-competitiveness, such price minima should be subjected to the “rule of reason,” and struck down only if it actually does inhibit competition. The lower court noted several cases where the Supreme Court used the per se approach, but concluded only the high court itself had authority to overrule its own precedent.
The debate is as much about economic policy as it is about law. Must government regulate business contracts (by barring price conditions) to achieve low prices, or will the competitive nature of the free market and its attendant profit incentives also achieve that result? The Court will announce its opinion by early July.
Government messes with tuition again
A proposal that would cut at least $17 billion in government subsidies to college-loan lenders is one of numerous steps that Congress is considering against ever-increasing tuition costs. Private lenders such as SLM Corp. (Sallie Mae) are not happy: “It’s going to hurt schools. It’s going to hurt students,” said SLM spokesman Tom Joyce. Considering that SLM controls approximately 40 percent of the college loan sector, there is much more on the line than student welfare. Academia, after all, is a business, and a profitable one at that.
New York Attorney General Andrew Cuomo has recently accused the industry of cutting inappropriate deals with clients in order to promote business. Further, students who call their potential colleges asking for financial-aid assistance may actually, without ever knowing it, be talking with employees of a private lender’s call center. Such behind-the-scenes activity has Congress also considering the forced disclosure of the relationships between colleges and private lenders.
Sen. Mike Enzi (R-WY) seems to be a lone voice of reason on the Senate’s education committee (an oxymoron if ever there was one). Rather than just cutting student-loan interest rates or increasing the amount of government grants, Enzi wants to “take a close look at the hidden costs” that are driving up tuition prices.
Actually, those hidden costs are glaringly clear: As long as the government continues to subsidize education, colleges will have no reason to curb costs.