Taxing Health Insurance
The centerpiece of bureaucracy-based health care reform like the proposal Governor Richardson continues to push is “universal coverage.” By this, advocates mean that if we all have health insurance then everyone will have access to health care. Sounds good enough even if the actual policy implications are a lot messier than they appear at first glance.
As I have written in the past, however, before governments embark upon dramatic “reforms,” we should make sure that current policies are not unnecessarily hindering the ability of New Mexicans to access quality health care. One policy I just discovered that is undoubtedly making health insurance and health care less accessible than it should be is taxation. Specifically, taxation of insurance premiums. Simply put, if you tax something you get less of it; if you eliminate taxes on something, you’ll get more of it.
Surprisingly enough, New Mexico levies a 4% tax on health insurance premiums! This means that for every $100 your employer or you pay for health insurance, the government gets $4. That doesn’t seem very smart if “universal coverage” is the goal. Actually, the original tax was 3%, but back in 2004, the Legislature and Governor Richardson apparently decided that health insurance wasn’t expensive enough, so they added a 1% surcharge.
Richardson’s Selective Vetoes Expose Flawed Funding Process, Waste
According to Barry Massey of the Associated Press in the Albuquerque Journal (Gov. Vetoes $7M In Senate Pork, Mar. 6, 2008), the Governor vetoed $500,000 for “renovation of a law enforcement complex in Deming, $10,000 for a plasma television and related equipment, $10,000 for weight room equipment, and $30,000 for field maintenance equipment for the UNM Athletic Department.” A more extensive list of the vetoes is available in the article.
While seven million dollars is a relatively small amount compared to the $341 million worth of expenditures he approved, fiscal conservatives might take heart that the Governor is looking out for their interests.
While this may be the case and much of what the Governor vetoed should be funded locally and not by the State, the pattern of vetoes seems more related to politics than principle. In fact, among the “capital investments” approved by the Governor are “$4.5 million for an automobile assembly facility… $7.5 million to assist with a solar energy equipment manufacturing plant…[and] $7.5 million for infrastructure for a planned building for a financial services company.” Clearly, some of these funds are also unnecessary.
Gilbert Gallegos, Richardson’s spokesman, basically admitted that Senate inaction on Richardson’s health care bill was the real reason for the vetoes, saying: “Sen. Rawson” (one of the Senators targeted with the most vetoes) “has been purely partisan and defiant as a state senator. He is not willing to work with the governor in the best interest of New Mexico.”
Ironically, while it is clear that the funding process in New Mexico needs to change (or better yet have the money returned to taxpayers), taxpayers may be the short-term winners in this game of chicken. That is, as long as the Governor fails in his bid for government-controlled health care.
What to look for in our next representatives
With the news that the US Senate voted yesterday to preserve its ability to earmark legislation (both Domenici and Bingaman voted to keep the pork coming), thus providing for often wasteful spending back home, often called “pork,” I thought my recent article from the Las Cruces Sun-News on how those running to represent New Mexico in Congress should approach the issue.
The underlying point of the piece is: “New Mexico should stand on its own two feet and not rely so much on the federal government.” Fortunately, because our representatives will have such limited pull due to their lack of seniority, our political leaders have no other choice at this point.
Making the Senate vote even more illustrative is the fact that on the very same day, the House passed a budget that — if its outlines are followed — would allow the vast majority of President Bush’s tax cuts to expire. Clearly, the collective voice of Congress is saying “Keep the pork flowing. We’ll raise your taxes to do it.” It is truly unfortunate that Senator Domenici decided to favor “bridges to nowhere” over New Mexico taxpayers.
Socialized Medicine Losing its Stigma?
In keeping with yesterday’s posting on the abysmal state of education in this country, this story which discusses a poll on what “socialized medicine” means to a group of survey respondents caught my attention. Among the findings:
* 67% said they understood what “socialized medicine” meant;
* Of those, 79% said the term means that the government makes sure everyone has health insurance;
* Only 32% said it means that the government tells doctors what to do;
* Of those who said they understand the term, 45% said that if America had socialized medicine, the health care system would be better, while 39% said it would be worse.
The fact that 79% of those who thought they understood what “socialized medicine” means said that it meant that the government made sure everyone has health insurance is not unexpected, but the finding that only 32% understood that giving everyone health insurance also means that doctors would be forced to obey government dictates is unfortunate and a clear sign of economic ignorance.
Obviously, we at the Rio Grande Foundation oppose socialized medicine or anything like it with every fiber of our being, but if Americans are convinced to go along with such a scheme without understanding that government would quickly be inserted into every health care decision Americans make, they are buying a bill of goods. This is an educational burden and opportunity for free market advocates.
Famous Americans in History?
Readers of this blog and followers of our work are probably aware of the failures of New Mexico’s education system. One study even found that New Mexico ranked dead last (51st in the nation in a study that included Washington, DC) in measuring what the study called “a child’s chance at success” as it pertains to education.
As bad as that statistic is, the really sad thing is that American education really isn’t that good to begin with. An article in the USA Today highlights this point discussing a survey of American high schoolers which asked them to name the most famous Americans in history. Shockingly, Founding Fathers like George Washington and Thomas Jefferson didn’t make the list, but Susan B. Anthony, Oprah, and Marilyn Monroe did make it.
Not to belittle the accomplishments of Martin Luther King and some of the others on the list, but there is no doubt that our politically-correct “education system” is failing to educate American students on the figures in American history that have contributed the most in favor of those that fit certain ethnic and gender groups. Of course, given the politically-correct nature of our teacher’s unions and their dominance of our education system, it would seem that the situation is not going to change anytime soon.
John Stossel to visit Albuquerque
If you read our blog more often than you check our website, you may not be aware that John Stossel, one of the nation’s most prominent consumer champions, advocate for free enterprise, and critic of bureaucratic foolishness, will speak at a luncheon in Albuquerque at the Marriott Pyramid on (note date change) Wednesday, April 30.
Stossel, author of several books and the host of ABC-TV’s 20-20 program, is being hosted by the Rio Grande Foundation and the New Mexico Prosperity Project.
RSVP’s can be made online via credit card here. The event is open to the public at a cost of $30 if RSVP-ing before April 15; and $40 if after April 15.
If you are not familiar with Stossel and his work, many of his latest stories are available here. Stossel’s work also includes a column that he writes on a variety of topics, always with a free market, limited government bent. A list of his columns can be found here. His most recent comment on the inner workings of Washington, DC lobbying and “influence peddling” can be found here.
We eagerly await Stossel’s upcoming visit and will continue to blog his columns in order to expose readers to his message of freedom and limited government.
Michigan Considers Offering Even More Generous Subsidies than New Mexico
New Mexico has come to be known for its extremely generous subsidies for the film industry. In fact, the New Mexico Film Office recently publicized the “fact” that the state’s film industry has generated $1.5 billion for the state economy.
While there is no proof that New Mexico’s generous subsidies are good for the economy, other states like Michigan are hoping to lure films with even more generous subsidies. Of course, neither Michigan nor New Mexico are paragons of economic achievement. In fact, while Michigan’s economy and personal incomes continue to lose ground to states like Alabama, it has a long way to go before it falls to New Mexico’s low level.
While Michigan’s auto industry is likely to continue that State’s economic decline, attracting a relatively small film industry with generous subsidies is not likely to turn things around. After all, it is oil and gas revenues that have given New Mexico a bump in recent years, not the film industry. Hopefully these two economically-struggling states are smart enough not to get involved in a bidding war.
Regulating Health Insurance in New Mexico
While most of the attention during New Mexico’s recently-completed legislative session was on Governor Richardson’s massive, government-managed health care proposal, apparently it wasn’t the only health care reform considered during the session. In fact, Richardson just signed a new law that further regulates health insurance.
One provision in the law will make it more difficult for insurance companies to rescind coverage for people who develop serious medical conditions.
The cap on yearly medical services paid by health insurance policies offering certain minimum coverage also will increase from $50,000 to $100,000 under the new law. The higher limit starts next year.
Currently, an insurer can refuse to pay claims or rescind coverage if there were omissions or misstatements—sometimes even if inadvertent—about a person’s medical condition or medical history in an insurance application.
That standard will change under the new law. Once a policy takes effect, insurers can deny claims or end coverage only if they show that an individual made “willful or fraudulent misstatements” in their application about a pre-existing medical condition.
Another change in the new law is to give people more time to obtain medical insurance after they lost coverage. It increases from 63 days to 95 days the “creditable coverage” period. That’s the time in which a person without coverage receives credit for previously being insured.
While all of these policy matters may sound reasonable to the average citizen, each of these new regulations will further increase the cost of health insurance in New Mexico. Considering that Richardson is simultaneously working to mandate “universal coverage,” it might seem odd that he would sign legislation to make insurance more costly. Unfortunately, it is perfectly consistent because the tendency is towards greater government involvement in all areas of health care.
Mora County commissioners to consider oil drilling ban
According to Staci Matlock of The Santa Fe New Mexican (Mora residents split over drilling, Feb. 26, 2008) Mora County commissioners will be holding a meeting on March 7th to discuss taking the radical step of banning all drilling for oil and gas throughout the county. Some residents are concerned about potential harm to endangered species in the area, water contamination, and destruction of the county’s natural beauty. Other residents feel that they have the right to decide what is done on their privately owned land.
Local ranchman Tony Duran has already signed a lease facilitated by KHL Inc. of Albuquerque, and is convinced that drilling would not pose a danger to the water resources in the area. I discussed the mineral leases with Journalist Staci Matlock and she told me that the mineral leases that have been signed in Mora thus far indeed do “include requirements for protecting water,” and in a previous article (Mora County residents torn over mineral leases, Feb. 16, 2008) she noted that, “Mora County… [has] protections for wells and water supplies written into the county’s development code. The code prohibits mining and other activities within a 1,000-foot radius of a well and prohibits activities that would contaminate water supplies.”
In the same article, Knute H. Lee, Jr., proprietor of KHL Inc., says, “New technology and know-how allows companies to drill for hydrocarbons while protecting both the environment and communities.” The company has clearly evaluated the critical issues involved and has worked out a plan to protect the interests of all the inhabitants of Mora County. A few citizens of the county have already signed leases with KHL and it would seem readily apparent that a ban on drilling would be detrimental to this business activity. The county commissioners should pay special attention to property owners who have the most to lose in this process. They should retain their legal authority to lease the minerals on their lands and collect royalties from any gas or oil collected.
New Mexico Schools Have Little to Show for Increased Spending
The March issue of the Heartland Institute’s excellent publication which follows education and education-related reforms, covered a recent study by Dr. Harry Messenheimer on the failure of New Mexico’s ever-increasing spending on K-12 education. Messenheimer’s study, “The Way to Education Success in New Mexico: Breaking Free from Failed ‘Reforms” find several important facts, including:
“Over the past two decades, New Mexico has dramatically increased resources devoted to education.”
“When adjusted for inflation and population growth, general fund spending has increased by 34 percent over the past 19 years,” the study notes. The average New Mexican is now paying an extra $319 each year for no improvement in the education of our children.”
The entire study is available here.
