BuckeyeBlog

Some in Ohio are pushing for legislators to pass a law mandating insurance companies cover autism therapy. California has such a law, and it has just been dramatically expanded by court order:

In a preliminary ruling, Los Angeles County Superior Court Judge James C. Chalfant found that Kaiser Permanente’s refusal to pay for a child’s autism treatment because the provider was not licensed by the state runs counter to California’s Mental Health Parity Act. That act requires insurers to cover care for mental and behavioral problems at the same levels they do for physical illnesses.

So let’s see: the state enacts a mandate that insurance companies cover autism treatment. Insurance companies must raise rates on everyone to cover such a treatment. These higher insurance rates paid by Californians go to pay for treatments by unlicensed therapists and may not even work (at all).

Ohioans would be wise to reject any calls for an autism insurance mandate. As California is showing, it will merely raise the cost of insurance and will probably do little to help autistic children.

(h/t to the always brilliant Marginal Revolution)

In the push to reintroduce passenger rail in Ohio, it is often claimed that passenger rail has strong support from the public. As recent data by the Pew Charitable Trust shows, where passenger rail already exists it isn’t all that popular:

Forty-one of Amtrak’s 44 routes lost money in 2008 with losses ranging from nearly $5 to $462 per passenger depending upon the line, according to analysis by Pew’s Subsidyscope.

The line with the highest per passenger subsidy—the Sunset Limited, which runs from New Orleans to Los Angeles—carried almost 72,000 passengers last year. The California Zephyr, which runs from Chicago to San Francisco, had the second-highest per passenger subsidy of $193 and carried nearly 353,000 passengers in 2008. Pew’s analysis indicates that the average loss per passenger on all 44 of Amtrak’s lines was $32, about four times what the loss would be using Amtrak’s figures: only $8 per passenger. (Amtrak uses a different method for calculating route performance).

The Northeast Corridor has the highest passenger volume of any Amtrak route, carrying nearly 10.9 million people in 2008. The corridor’s high-speed Acela Express made a profit of about $41 per passenger. But the more heavily utilized Northeast Regional, with more than twice as many riders as the Acela, lost almost $5 per passenger.

As I explained here, when taxpayers have to pick up the tab for part (or in Ohio, most) of the cost of your ride, then it’s there just isn’t the demand for passenger rail that supporters claim.

If you really think the health care proposals being debated in DC will cost less than $1 trillion over ten years, the Wall Street Journal today has some history of other government health care programs that should disabuse you of that notion:

The House Ways and Means Committee estimated that [Medicaid's] first-year costs would be $238 million. Instead it hit more than $1 billion, and costs have kept climbing.

Thanks in part to expansions promoted by California’s Henry Waxman, a principal author of the current House bill, Medicaid now costs 37 times more than it did when it was launched—after adjusting for inflation. Its current cost is $251 billion, up 24.7% or $50 billion in fiscal 2009 alone, and that’s before the health-care bill covers millions of new beneficiaries.

Medicare has a similar record. In 1965, Congressional budgeters said that it would cost $12 billion in 1990. Its actual cost that year was $90 billion. Whoops. The hospitalization program alone was supposed to cost $9 billion but wound up costing $67 billion. These aren’t small forecasting errors. The rate of increase in Medicare spending has outpaced overall inflation in nearly every year (up 9.8% in 2009), so a program that began at $4 billion now costs $428 billion.

The Weekly Standard has a great article about how government employee unions are contributing to state budget problems. It points out the generous compensation government workers receive, courtesy of your tax dollars:

For every $1-an-hour pay increase, noted Dennis Cauchon in USA Today, public employees have gotten $1.17 in new benefits. Private workers have gotten just .58 cents in benefits for every $1 raise. This gap worries left-liberal labor economist Barry Bluestone. The price of state and local public services increased by 41 percent nationally between 2000 and 2008. Private services only increased by 27 percent. The benefit growth has continued unabated into the Great Recession, and Bluestone says the gap will inevitably produce a backlash.

The rising compensation of state government workers in Ohio has contributed significantly to the current state budget problems, as I wrote about here.

In a Viewpoint I wrote a little while ago, I raised a concern about the burden the health care legislation making its way through Congress would impose on state taxpayers. While health insurance regulation and Medicare are receiving the bulk of the attention in this debate, all the legislation passed by House and Senate committees contain expansions of Medicaid, which pays for the health care of the poor and near-poor. Medicaid is a joint state/federal program and it is a significant portion of the state budget. Expanding this program will cost state taxpayers dearly.

The Columbus Dispatch has a story today about just how much that cost may be:

As Ohio officials try to close an $850 million budget hole, the key U.S. Senate health-care overhaul package could cost Ohio $922 million in additional Medicaid spending in the plan’s first five years.

Taxpayers should note that this figure was calculated using the assumption the federal government would pay 95% of the cost of the newly-expanded Medicaid. Currently the federal government pays 60% of Ohio’s Medicaid cost. It is highly unlikely that the feds will shoulder 95% of the cost in the final bill or, if they do, that this number will last more than a few years.

Ohio taxpayers should be aware of just how expensive this health care “reform” legislation will be to them not only at the federal level, but also at the state level.

Yesterday Transportation Secretary Ray LaHood came to Ohio to extol the virtues of passenger rail. I hope he offered something in his talk that was more  insightful than his comments as reported in the Dispatch: “if you build it, they will come” and “people like to ride trains.”

His platitudes are not only lame but they are also wrong. If you build it, they may come to the train station, but they won’t ride it unless taxpayers pay the majority of their ticket price and fully subsidize the initial start up costs. And, yes, people like to ride trains. They just don’t want to pay the full cost to do so.

I have nothing against train travel. As I explain here, I just don’t want taxpayers to subsidize it.

Sen. Max Baucus unveiled his health care plan yesterday and one of its main selling points is that it won’t add to the deficit, according to CBO’s score for the bill. Most of the Baucus bill’s costs would be paid for by reducing spending on Medicare. As Peter Suderman over at Reason magazine’s blog points out, though, the CBO also issued this warning about how unlikely it is that Congress will actually reduce Medicare’s spending:

These projections assume that the proposals are enacted and remain unchanged throughout the next two decades, which is often not the case for major legislation. For example, the sustainable growth rate (SGR) mechanism governing Medicare’s payments to physicians has frequently been modified (either through legislation or administrative action) to avoid reductions in those payments.

Currently, Medicare payments to physicians are supposed to go down automatically if spending in the program accelerates at too rapid a pace. Congress can override these automatic cuts, though. As CBO point out, Congress often does just this. What CBO doesn’t point out is that Congress does this in response to fierce lobbying by physicians and other providers who benefit from Medicare’s payment rates.

I fail to see anything in the Baucus legislation that will either reduce this lobbying or strengthen the spines of members of Congress to resist it. In short, if you think the Baucus bill won’t add to the deficit, you haven’t been observing Congress very closely.

Gongwer News Service($) reported on a press conference by passenger rail advocates yesterday that had this astonishing claim:

Creation of a rail line from Boston to Portland, Maine produced a 220% return on the $100 million in public spending, according to real estate developer Robert Martin.

The project has generated more than $7 billion in construction investment, 17,800 new jobs in the region, $76 million in tax revenue, and $2.4 billion in consumer purchases, he said during a news conference.

That seemed quite shocking to me as the evidence I’ve heard about passenger rail indicates that its economic development benefits are pretty paltry (if they exist at all). So I did some searching to see if I need to revise my opinion. A quick Google search shows that I don’t.

The numbers quoted by Gongwer aren’t the economic benefits of the Maine railroad. They are, in fact, merely an estimate from a pro-rail group that are estimated to occur by 2030. Either the Gongwer reporter got it wrong or the pro-rail advocate who said these things was misinformed. Regardless, even this estimate of the thirty-year benefits from the Maine railroad are inflated and unrealistic.

The moral of the story — don’t believe everything you hear about how great passenger rail is.

In Cincinnati yesterday, President Obama made this astounding claim about those who oppose his health care “reform” plan: “I’ve got a question for all those folks: What are you going to do? What’s your answer? What’s your solution? And you know what? They don’t have one.”

You’d think the President would do a little research before speaking, since what he said was 100% false. There are plenty of ideas out there from those of us who oppose his plan. Peter Suderman over at Reason magazine does the president’s job for him and lists some of the solutions Obama says don’t exist.

A New York Times article on the liberal push to support President Obama’s health care “reform” mentioned this:

Other people were stoked by personal causes that seemed in some cases only peripheral to a broader societal debate.

“I’m out here if it will help one more kid get medication,” said Johari Ade-Green, 58, of Denver, who was holding a sign with a picture of her grandson, Zumante Lucero, who died in July at age 9 from complications of asthma. Her grandson had insurance under Medicaid and Social Security, she said, but through a mix-up was denied medication.

It’s undeniably tragic that this child died, especially when it sounds like his death could have been prevented. But didn’t anyone there notice that this child died while on Medicaid? That it was a mix-up on the part of government health care that killed the child? Maybe I’m biased (OK, I’m certainly biased), but it seems this child’s story is a good reason why we should oppose an expansion of government health care, especially the government option that is so near-and-dear to the hearts of the people at this rally.