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Reason Foundation

Reason Alert: Health Care Costs, Get Rid of TSA

Fiscal folly of health care reforms and is this the last, best chance for school reform?

April 9, 2010

- Health Care's History of Fiscal Folly
- Get the TSA Out of Airport Screening
- Chance for Real School Reform?
- New at Reason  

Health Care's History of Fiscal Folly

"The Affordable Care Act - otherwise known as ObamaCare - isn't the first attempt to expand health insurance coverage in America. Before Washington passed its law, a number of states took smaller-scale cracks at the job-each of which proved far more expensive than planned...[Tennessee's] attempt to dramatically increase health coverage, dubbed TennCare, started off promisingly. In 1994, the first year of its operation, the system added half a million new individuals to its rolls. Premiums were cheap-just $2.74 per month for people right above the poverty line-and liberal policy wonks loved it...By 2004, the budget had jumped from $2.6 billion to $6.9 billion, and it accounted for a quarter of the state's appropriations. A McKinsey report projected that the program's costs could hit $12.8 billion by 2008, consuming 36 percent of state appropriations and 91 percent of new state tax revenues...And then there is the Massachusetts plan, the model for ObamaCare. The state's health care program has successfully expanded coverage to about 97 percent of the state's population, but the price tag may be more than the state can bear. When the program was signed into law, estimates indicated that the cost of its health insurance subsidies would be about $725 million per year. But by 2008, those projections had been revised. New estimates indicated that the plan was to cost $869 million in 2009 and $880 million in 2010, an upwards increase of nearly 20 percent. More recently, the governor's office announced a $294 million shortfall on health care funds, and state health insurance commissioners have warned that, on its current course, the program may be headed for bankruptcy. According to an analysis by the Rand Corporation, 'in the absence of policy change, health care spending in Massachusetts is projected to nearly double to $123 billion in 2020, increasing 8 percent faster than the state's gross domestic product (GDP).' The state's treasurer, a former Democrat who recently split with his party, says that the program has survived only because of federal assistance. Defenders of the program argue that it's not really a budget buster because the state's budget was already in trouble. But for those worried about ObamaCare's potential effects on the federal budget, that's hardly comforting."- Reason magazine's Peter Suderman
Quit Playing Games With My Health Care System

Get the TSA Out of Airport Screening

In today's Washington Times, Reason Foundation's Robert Poole explains why the TSA's conflict of interest prevents better, and cheaper, aviation security: "Following Sept. 11, most other countries increased their standards for airport security by letting each airport implement its own procedures under government supervision. In Europe, that led to nearly all major airports hiring certified private security firms to do their screening. Canada created a new federal agency to implement better screening but outsourced the actual screening. This kind of high-performance contracting permits better training and airport-specific flexibility (e.g., higher pay scales in Canada's jobs-rich oil patch) and it better matches screener numbers to changing travel patterns and airport passenger levels. In contrast, the system Congress and the George W. Bush administration created came with a massive conflict of interest: TSA serves as both the aviation-security regulator and the provider of key security. Who's watching the watchmen? When it comes to baggage and passenger screening, TSA is regulating itself. As with any bureaucracy, its natural incentive is to hide errors and make itself look good. In addition to the obvious conflict of interest, this also makes for fragmented airport security. Consider that airport perimeters, air cargo and other aspects of security are not operated and managed by TSA, but by airports. This lack of cohesion can create security gaps. In Europe, each airport is directly responsible for every aspect of its security, under strict government oversight."

Chance for Real School Reform?

In the May issue of Reason magazine, Katherine Mangu-Ward examines Michelle Rhee's battle with the teachers' union and her efforts to transform Washington, DC's schools: "American public school teachers don't get fired. They just don't. In New York City, hundreds of teachers spend all day in 'rubber rooms' because they're deemed too dangerous or stupid to supervise children but can't be booted because they have union-protected tenure. In crisis-ridden California, the mildest of threats from Gov. Arnold Schwarzenegger to cut back on teaching staffs led to an immediate rebuke from the White House. So when 266 teachers were unceremoniously canned in Washington, D.C., in the fall of 2009, the educators of America collectively slid their glasses down their noses and glared at the District of Columbia. Although 266 firings might not seem like a lot in a country that has lost 8.4 million jobs since December 2007, they could turn out to be more important to the nation's long-term health than the $150 billion 'jobs bill' legislators were debating on Capitol Hill...Within months of taking office, Rhee foreshadowed the bloodbath that lay ahead by firing 30 percent of the school's central bureaucracy. She commissioned an outside audit of school records. (Her staff is still finding rooms filled with unmarked file boxes and cabinets with no keys.) As her first year ticked away, Rhee staffed the human resources department with her own people, installed modern payroll systems, and generally tidied up the back office. Before her first school year started, she found 68 people on the books with no discernible duties, 55 teachers, three aides, and 10 assistant principals, costing a total of $5.4 million a year. She closed 25 underperforming schools (in a district that has 129) and replaced half of the system's principals with candidates hand-selected by her personal staff and interviewed by Rhee herself."
Update: DC Teachers May Be Paid More If They Are Good, Fired If They're Not
Mangu-Ward in the Washington Post: Traditional Schools Aren't Working. Let's Move Learning Online

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