Proposals for Free and Subsidized Healthcare and Education in the US

**Lord Thesaurian** · December 26, 2019, 06:56 PM

As time goes on, it is becoming increasingly clear that the US will, one way or another, join the rest of the world in dramatically increasing the government’s role in the healthcare and education sectors. Apart from the political faction on the right which essentially wants to keep things the way they are, most of the country and therefore political momentum is behind substantial government intervention in these areas of the economy. Like it or not, the discussion is no longer a question of whether or not to engage in a European-style overhaul of these sectors, but how.

Based on the following, I think most of the country does not understand that question, nor have the politicians promising sweeping reforms provided convincing details on how to approach the answers. On both education and healthcare, numerous solutions have been implemented over the years, and more are being proposed as 2020 approaches. Here’s where I think these solutions and proposals miss the mark, and where I’d like to focus discussion:

Healthcare:

Whether reforms take the shape of a public option or medicare for all, these take aim at reducing the cost to the end user while doing comparatively little to address the causes of rising costs. We know Medicare itself is one of the biggest drivers of rising healthcare costs, and that reducing costs to the consumer will increase consumption.

The argument is that expanding Medicare coverage to most or all of the US population will reduce administrative costs and force healthcare providers to reduce their costs to meet the price Medicare is willing to pay. While the latter makes intuitive sense, it doesn’t square with what Medicare has actually done to the healthcare sector for decades - balloon costs and elicit fraud, because the government is a buyer with unlimited money in a fee-for-service system.

It’s also worth noting that the healthcare coverage expansions under discussion in the US are not like the Canadian and European counterparts they are supposedly based on. Even in the most general terms, a US Medicare for All or income based public option system would have virtually no coverage maximums, personal savings requirements, or hard limits to the types of services covered. Providers would seemingly continue to bill Medicare based on the existing fee-for-service model that engenders fraud, waste, and price inflation. Everyone, not just the super-wealthy, would have to pay much higher taxes, and those would presumably continue to rise with the overall cost of care, which is a political minefield unto itself. Even under the current system, taxes will need to increase significantly in the near future to cover Medicare’s existing liabilities.

Question: Where is the cost control mechanism? Some countries, like Britain, draw a clear line between public and private health systems to centralize control over costs and services for which the government is ultimately responsible. Others, like Singapore, require minimum personal health savings and offer tiered services based on whether the provider is public or private. In a proposed US public insurance system, where is the line? Proposals for universal healthcare coverage in the US don’t account for the same issues which plagued the ACA/Obamacare: How to deal with legislative sabotage, how to deal with the causes of rising costs, and how building on a broken system - Medicare - is going to achieve the desired results without significant or even crippling externalities.

Education:

Similar to healthcare, proposed plans to subsidize or entirely cover all levels of education in the US face the same questions. As demand for post-secondary education has increased, so too have costs. Federal student aid and increased access to loans for education have ballooned along with those costs, and there is substantial evidence for a causal link between government intervention in the education sector, and price inflation.

The US already has a public university system administered by the states. While proposals to increase federal funding to the states for education would ostensibly lower the costs to students by placing additional restrictions on what the funds can be used for, there are few specific controls here either. There are also few details as to whether only public universities would be eligible for increased aid and subsidies, or if the same benefits would apply to private “non-profits” currently eligible for federal student aid and subsidized loans. Increased taxes is also a reality no politician seems eager to discuss.

Question: Where is the cost control mechanism? Tackling ballooning education costs means addressing the causes. Making education free for the end user is certainly achievable, but without restricting access to consumer credit and federal funding/subsidies, the current proposals seem doomed to build on a broken system of runaway price inflation. Just because the consumer wouldn’t be paying for it up front doesn’t mean someone else isn’t in the end.

Articles:

Spoiler Alert, click show to read:

**Michael901** · February 06, 2020, 03:29 AM

Originally Posted by Legio_Italica

As time goes on, it is becoming increasingly clear that the US will, one way or another, join the rest of the world in dramatically increasing the government’s role in the healthcare and education sectors. Apart from the political faction on the right which essentially wants to keep things the way they are, most of the country and therefore political momentum is behind substantial government intervention in these areas of the economy. Like it or not, the discussion is no longer a question of whether or not to engage in a European-style overhaul of these sectors, but how.

Based on the following, I think most of the country does not understand that question, nor have the politicians promising sweeping reforms provided convincing details on how to approach the answers. On both education and healthcare, numerous solutions have been implemented over the years, and more are being proposed as 2020 approaches. Here’s where I think these solutions and proposals miss the mark, and where I’d like to focus discussion:

Healthcare:

Whether reforms take the shape of a public option or medicare for all, these take aim at reducing the cost to the end user while doing comparatively little to address the causes of rising costs. We know Medicare itself is one of the biggest drivers of rising healthcare costs, and that reducing costs to the consumer will increase consumption.

The argument is that expanding Medicare coverage to most or all of the US population will reduce administrative costs and force healthcare providers to reduce their costs to meet the price Medicare is willing to pay. While the latter makes intuitive sense, it doesn’t square with what Medicare has actually done to the healthcare sector for decades - balloon costs and elicit fraud, because the government is a buyer with unlimited money in a fee-for-service system.

It’s also worth noting that the healthcare coverage expansions under discussion in the US are not like the Canadian and European counterparts they are supposedly based on. Even in the most general terms, a US Medicare for All or income based public option system would have virtually no coverage maximums, personal savings requirements, or hard limits to the types of services covered. Providers would seemingly continue to bill Medicare based on the existing fee-for-service model that engenders fraud, waste, and price inflation. Everyone, not just the super-wealthy, would have to pay much higher taxes, and those would presumably continue to rise with the overall cost of care, which is a political minefield unto itself. Even under the current system, taxes will need to increase significantly in the near future to cover Medicare’s existing liabilities.

Question: Where is the cost control mechanism? Some countries, like Britain, draw a clear line between public and private health systems to centralize control over costs and services for which the government is ultimately responsible. Others, like Singapore, require minimum personal health savings and offer tiered services based on whether the provider is public or private. In a proposed US public insurance system, where is the line? Proposals for universal healthcare coverage in the US don’t account for the same issues which plagued the ACA/Obamacare: How to deal with legislative sabotage, how to deal with the causes of rising costs, and how building on a broken system - Medicare - is going to achieve the desired results without significant or even crippling externalities.

Education:

Similar to healthcare, proposed plans to subsidize or entirely cover all levels of education in the US face the same questions. As demand for post-secondary education has increased, so too have costs. Federal student aid and increased access to loans for education have ballooned along with those costs, and there is substantial evidence for a causal link between government intervention in the education sector, and price inflation.

The US already has a public university system administered by the states. While proposals to increase federal funding to the states for education would ostensibly lower the costs to students by placing additional restrictions on what the funds can be used for, there are few specific controls here either. There are also few details as to whether only public universities would be eligible for increased aid and subsidies, or if the same benefits would apply to private “non-profits” currently eligible for federal student aid and subsidized loans. Increased taxes is also a reality no politician seems eager to discuss.

Question: Where is the cost control mechanism? Tackling ballooning education costs means addressing the causes. Making education free for the end user is certainly achievable, but without restricting access to consumer credit and federal funding/subsidies, the current proposals seem doomed to build on a broken system of runaway price inflation. Just because the consumer wouldn’t be paying for it up front doesn’t mean someone else isn’t in the end.

Articles:

Spoiler Alert, click show to read:

Absolutely agree with the aithor and with the questions. And this is possible to Make education free for the end user is certainly achievable, but without restricting access to consumer credit and federal funding/subsidies, the current proposals seem doomed to build on a broken system of runaway price inflation.

**Common Soldier** · February 12, 2020, 02:13 PM

Originally Posted by Legio_Italica

Healthcare:

Whether reforms take the shape of a public option or medicare for all, these take aim at reducing the cost to the end user while doing comparatively little to address the causes of rising costs. We know Medicare itself is one of the biggest drivers of rising healthcare costs, and that reducing costs to the consumer will increase consumption.

The argument is that expanding Medicare coverage to most or all of the US population will reduce administrative costs and force healthcare providers to reduce their costs to meet the price Medicare is willing to pay. While the latter makes intuitive sense, it doesn’t square with what Medicare has actually done to the healthcare sector for decades - balloon costs and elicit fraud, because the government is a buyer with unlimited money in a fee-for-service system.

It’s also worth noting that the healthcare coverage expansions under discussion in the US are not like the Canadian and European counterparts they are supposedly based on. Even in the most general terms, a US Medicare for All or income based public option system would have virtually no coverage maximums, personal savings requirements, or hard limits to the types of services covered. Providers would seemingly continue to bill Medicare based on the existing fee-for-service model that engenders fraud, waste, and price inflation. Everyone, not just the super-wealthy, would have to pay much higher taxes, and those would presumably continue to rise with the overall cost of care, which is a political minefield unto itself. Even under the current system, taxes will need to increase significantly in the near future to cover Medicare’s existing liabilities.

Question: Where is the cost control mechanism? Some countries, like Britain, draw a clear line between public and private health systems to centralize control over costs and services for which the government is ultimately responsible. Others, like Singapore, require minimum personal health savings and offer tiered services based on whether the provider is public or private. In a proposed US public insurance system, where is the line? Proposals for universal healthcare coverage in the US don’t account for the same issues which plagued the ACA/Obamacare: How to deal with legislative sabotage, how to deal with the causes of rising costs, and how building on a broken system - Medicare - is going to achieve the desired results without significant or even crippling externalities.

The biggest problem with health care is the cost are rising much more rapidly than the inflation in general. It is the rising cost that is really creating the problem, and little is being done by both political parties to address the concern.

The health industry is the most inefficient industry that I know of. I get bills for cost for test and procedures I had done more than half a year ago or more, and it is very difficult to determine exactly what my out of pocket expenses will be for some test my doctor recommends having done. The general policy is - "we will charge your insurance company, and whatever they don't pay, you will be responsible for", without being able to even guess how much the insurance will pay for. If the affordable care act is supposed to make the cost more transparent, I haven't seen that much improvement myself.

Also, everyone involved submits their bills separately - the hospital charges a fee for the facilities, the doctor or tech who performs the procedure charges a separate bill. I read someone say it is like going to a restaraunt where the waiter gives you on bill, the chef who makes the food gives you a separate bill, and the restaurant itself gives you a 3rd bill for the table you sat at, and all these bills are sent to you months after you ate at the restaurant. That is guaranteed to be inefficient.

Also, the cost charged are all over the map, no consistency. https://www.seattletimes.com/nation-...212-or-182955/. If the Affordable Care act was supposed fix the issue, I haven't seen any real improvement.

In some cases, like drug cost, Congress prevented Medicare from using its clout as a buyer to get better drug cost. I don't think anyone has established what are reasonable cost, what the cost should be. If you need surgey, it can be difficult to shop around and find the hospital or facilities that offer the best price and service, and if you need emergency medical service, like for a heart attack, you are often not in a position to shop around for the best cost. So inefficient facilities and providers often are not penalized, only the patients who have to use the those providers are.

The insurance companies, who are really running the US health system, are perfectly happy with the current situation, since they are making good profits, and so see no real reason to fix the problem.

Education:

Similar to healthcare, proposed plans to subsidize or entirely cover all levels of education in the US face the same questions. As demand for post-secondary education has increased, so too have costs. Federal student aid and increased access to loans for education have ballooned along with those costs, and there is substantial evidence for a causal link between government intervention in the education sector, and price inflation.

The US already has a public university system administered by the states. While proposals to increase federal funding to the states for education would ostensibly lower the costs to students by placing additional restrictions on what the funds can be used for, there are few specific controls here either. There are also few details as to whether only public universities would be eligible for increased aid and subsidies, or if the same benefits would apply to private “non-profits” currently eligible for federal student aid and subsidized loans. Increased taxes is also a reality no politician seems eager to discuss.

Question: Where is the cost control mechanism? Tackling ballooning education costs means addressing the causes. Making education free for the end user is certainly achievable, but without restricting access to consumer credit and federal funding/subsidies, the current proposals seem doomed to build on a broken system of runaway price inflation. Just because the consumer wouldn’t be paying for it up front doesn’t mean someone else isn’t in the end.

Student loans are often at a significantly higher rate than other loans, like for a house or car. The big problem is again, education cost are rising much higher than the average rate of inflation. The rising cost of education needs to be checked and reigned in. I am sure why the cost are rising so fast, but when I look at the salaries of college presidents, which can rival the pay of CEO, and other administrative cost, I think we need to look there. Also the pay of coaches for major sports like football and basketball are very high too.

I think we need to figure out why the cost of education is rising, what the breakdown is. I know that in public education (kindergarten through high school), school superintendents are being paid big bucks in many school systems, and the myraid of counselors and other personnel not associated with actually teaching students has risen significantly.

And American education is not just expensive on the university and college level. America is fifth on spending for public education, but the results have only been rather mediocre.

The U.S. ranks fifth in spending per student. Only Austria, Luxembourg, Norway, and Switzerland spend more per student. To put this in context: the Slovak Republic, which scores similarly to the U.S., spends $53,000 per student. The U.S. spends $115,000. The PISA report notes that, among OECD countries, “higher expenditure on education is not highly predictive of better mathematics scores in PISA.” https://www.theatlantic.com/educatio...t-math/281983/

In this public system, the high cost of college has as much to do with politics as economics. Many state legislatures have been spending less and less per student on higher education for the past three decades. .....

The easiest way for universities to make up for the cuts was to shift some of the cost to students—and to find richer students. “Once that sustainable public funding was taken out from under these schools, they started acting more like businesses,” says Maggie Thompson, the executive director of Generation Progress, a nonprofit education-advocacy group. State cutbacks did not necessarily make colleges more efficient, which was the hope; they made colleges more entrepreneurial........

This competition eventually crept beyond climbing walls and dining halls into major, long-term operating expenses. For example, U.S. colleges spend, relative to other countries, a startling amount of money on their nonteaching staff, according to the OECD data. Some of these people are librarians or career or mental-health counselors who directly benefit students, but many others do tangential jobs that may have more to do with attracting students than with learning. Many U.S. colleges employ armies of fund-raisers, athletic staff, lawyers, admissions and financial-aid officers, diversity-and-inclusion managers, building-operations and maintenance staff, security personnel, transportation workers, and food-service workers. .............

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The more i studied America’s baffling higher-education system, the more it reminded me of health care. In both spaces, Americans pay twice as much as people in other developed countries—and get very uneven results. The U.S. spends nearly $10,000 a person on health care each year (25 percent more than Switzerland, the next biggest spender), according to the OECD’s 2017 Health at a Glance report, but our life expectancy is now almost two years below the average for the developed world......https://www.theatlantic.com/educatio...merica/569884/

**Love Mountain** · February 12, 2020, 06:15 PM

The biggest problem with health care is the cost are rising much more rapidly than the inflation in general. It is the rising cost that is really creating the problem, and little is being done by both political parties to address the concern.

Student loans are often at a significantly higher rate than other loans, like for a house or car. The big problem is again, education cost are rising much higher than the average rate of inflation. The rising cost of education needs to be checked and reigned in.

This means and contains little relevant information. We all know costs are rising, but the substance is in the specifics. You might as well say that the biggest problem with poverty is that the number of poor people is rising.

**Common Soldier** · February 13, 2020, 01:18 AM

Originally Posted by Love Mountain

This means and contains little relevant information. We all know costs are rising, but the substance is in the specifics. You might as well say that the biggest problem with poverty is that the number of poor people is rising.

I thought it was clear from what I.said and from the links I provided what was driving up the cost.

Healthcare:

1. The numerous insurance companies, all with their own unique billing codezls and what they will.and will not pay for, and how much, is driving up administrative cos, so a lot of healthcare coat is going into just administrating the healthcare bookkeepjg instrad of actual providing services. Doctors practicall have to hire full tine persons just to.handle.the patient billing.

2. The complexities of how healhcare is charged, and the complexities of reimbursement by healthcare results in a significant time lag for payment, adding cost to the system

3. The mnumerous health insurance companies, all with presidents and CEO's and VPs, all which get paid big bucks, means that significsnt amounts of money in healthcare is going to pay their salaries, and to the huge profits of the healthcare companies, rathet than actually providing care.

4. The healthcare insurance companies havs little incentivr to be efficent, just passing onto the patient. I understand the companies can charge a certain percentage markup.of the care they provide, so the more a service, the more they make, and incentive to drive up cost.

5. The propensity of lawsuits in thr US and big and costly legal settlements, meaning healthcare money is going to pay lawyer salaries rathe than to patient care.

Education:

1. A signigicant amount of money is paid to people not invovle in teaching, in salaries of counselors, adminstrators, and lawyers.

2. To compensate for reductions in money states give universities, schools have had to charge their students more. Also schools have become involved in bidding wars for paying students.

3. Lower student teacher ratios can drive up cost.

4. Lawsuits mean more money going to lawyer's salaries insteae of educating students. The big payouts awarded give incentive to lawyers to sueek out potential lawsuits, wirh little risk other than thd lawywr's lost time if the suit faila. Payouts are such that one successful award can more than compensate for many failed lawsuits.

**TerryLewis** · April 27, 2020, 07:40 AM

ProfTexas: "It just reminds me of the phrase "For the Greater Good" from the cheap essay lesson plan for teaching in Augustana College - Rock Island. Why the Greater Good is Good: Lessons from Harry Potter by Maureen Zach"

An interesting fact: the higher education system in America was ranked the best in world by the Melbourne Institute of Applied Economic and Social Research in Australia. Neal McCluskey, from the Cato Institute’s Center for Educational Freedom, wrote why U.S. college education shouldn’t be subsidized and that the only solution was to phase out aid and spend less government money on it.

**Heathen Hammer** · April 27, 2020, 12:57 PM

Healthcare:
The elephant in the room is that government over-regulation created an ideal environment for Big Pharma and other corporations to artificially inflate healthcare costs by astronomic margins. That's why we hear ridiculous news about people with no insurance having to pay tens of thousands of dollars for a few stitches or some other basic healthcare procedure that realistically wouldn't cost much at all. So first and foremost, something must be done about government regulating in favor of select corporations and deal with the artificial cost inflation loophole.

Education:
Post-secondary education is quite overrated. I mean it is not longer a hot take that a lot of university/college programs can be replaced by youtube videos and other resources readily available online for free or for much cheaper cost. Much like in case of healthcare, education costs are also inflated in unrealistic manner, far exceeding the actual value of post-secondary education.
Perhaps it would make sense to reduce government funding to anything other then STEM courses, and drive tuition costs to their realistic margins by cutting programs and expenditures without inherent educational value. In other words, if you can easily learn X outside college, it should probably not be taught in college.

**antaeus** · April 27, 2020, 11:54 PM

Originally Posted by Heathen Hammer

... easily learn X outside college, it should probably not be taught in college.

Doesn't that work for everything? All you need is a tutor and you can learn anything. Why not replace our expensive education systems with user pays private tuition like before the 19th century.

**Heathen Hammer** · April 28, 2020, 03:28 PM

Originally Posted by antaeus

Doesn't that work for everything? All you need is a tutor and you can learn anything. Why not replace our expensive education systems with user pays private tuition like before the 19th century.

Or you know, you could use Internet.

**Cyclops** · April 28, 2020, 09:13 PM

Originally Posted by TerryLewis

An interesting fact: the higher education system in America was ranked the best in world by the Melbourne Institute of Applied Economic and Social Research in Australia. Neal McCluskey, from the Cato Institute’s Center for Educational Freedom, wrote why U.S. college education shouldn’t be subsidized and that the only solution was to phase out aid and spend less government money on it.

The University of Melbourne (which the MI is part of) has been driving a user pays model for decades, so this is a self serving result. The most successful institution is RMIT which attracts the most foreign students and has honed a very fine tuned money milking machine.

Undergraduate degrees are still subsidised for Aus citizens and prices kept down, but overseas students are a cash cow. This has led to a lot of junk degrees, as well as dropped standards for even some prestige degrees so LOTE students pass to the next pay point. There are still standards because for example if medical degrees passed illiterate students there would be deaths, and a concomitant drop in enrolments o there is some incentive to maintain standards.

The user pays model has been a mixed bag: the very stiff necked old model with limited places has been liberalised, but the cheapening of degrees and "pay to win" is very much a negative development. It's very hard to get right but the US model of "pay to win" is so extreme it amounts to social engineering and definitely does not suit Australian society.

**Love Mountain** · May 01, 2020, 05:46 AM

Unfortunately the situation in United States has less to do with pre-mediated malice, than it does with blind greed.

**Cyclops** · May 01, 2020, 06:33 PM

Originally Posted by Love Mountain

Unfortunately the situation in United States has less to do with pre-mediated malice, than it does with blind greed.

And just to drill down further on that, I believe the US has the very complex state/federal mix of health systems that overly complicates so much of US life. Without a strong federal direction though weak states are prey to strong nationally organised lobby groups such as HMOs.

Anecdotally I've been told the Ford administration was a turning point in the move to monetised health in the US. Apparently Dick Cheney was part of that story? Turned Nixon's national health scheme (apparently there was basically a consensus to pass the scheme but then he was impeached) on its head and killed it.

**Love Mountain** · May 02, 2020, 08:44 PM

Originally Posted by Cyclops

And just to drill down further on that, I believe the US has the very complex state/federal mix of health systems that overly complicates so much of US life. Without a strong federal direction though weak states are prey to strong nationally organised lobby groups such as HMOs.

Anecdotally I've been told the Ford administration was a turning point in the move to monetised health in the US. Apparently Dick Cheney was part of that story? Turned Nixon's national health scheme (apparently there was basically a consensus to pass the scheme but then he was impeached) on its head and killed it.

I don't know enough about it off the top of my head. However, decentralization is not necessarily a bad thing when it comes to healthcare. Change is easiest from the top, both because power is essentially unlimited at the federal level, and because States are typically far too busy with the day-to-day running of the country to take a lead on this issue.