Tag Archives: economics

An Unintended Consequence

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The health coverage plan providers, companies like Humana, Aetna, Anthem, et al., are gaming the Medicare system to keep their Medicare bonuses coming in.  Surprise.

It seems that when Obamacare was passed, it included a system of paying bonuses from Medicare to those plan providers that got sufficiently high ratings on the quality of their plans.

But wait….

Medicare ranks privately managed plans…on a five-star quality scale and provides financial bonuses to providers of top-ranked plans. [A plan-holder’s] plan was set to be downgraded, which would have cost Humana its bonus. So the company merged plans covering [the plan-holder] and more than a million others into different contracts with higher scores. That preserved the bonuses.

That’s called cross-walking, and it’s entirely legal, if maybe a tad shady.

This is the sort of thing that happens, though, when Government intrudes itself too far into a marketplace.  Private enterprise is more agile than government bureaucracies can ever hope to be, and they can move much faster than any government bureaucracy can hope to do.

It’s also why black markets flourish in centrally planned economies.

The existence of this ability to cross-walk is a function of our Federal government’s intervention in what should be a free, competitive market.  The question wouldn’t even exist if we had an actual health insurance industry that operated free of Government fetters in an actual freely competitive market.

Biofuel Mandates

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The Wall Street Journal had a piece titled Biofuel Mandates Are a Bad Idea Whose Time May Be Up that centered on the possibility that these might get watered down, or even eliminated, sometime “soon.”

The Renewable Fuel Standard, which forces oil refiners to mix corn-based fuel into gasoline, is one of history’s great policy boondoggles.

Well, NSS.  The only things it’s done of practical consequence have been to serve as a backdoor subsidy for farmers and to drive up the cost of corn, corn substitutes, and food that eats corn.  And to drive up the cost of gasoline and to create ethanol fuel-related automobile engine maintenance costs.

But that’s the problem with Government mandates in general when they’re intended to create a market for a particular product.

As a mandate, the time for this one on biofuels never was.

Federal Student Loans and State Regulators

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The Trump administration has told States to stop regulating companies that service Federal student loans; that’s the Federal government’s job.  The States have demurred.

The whole thing could—and should—be made moot by the Federal government getting out of the student loan business altogether.  The Feds have no business here; it’s a private enterprise arena, and the States should be free to regulate, or not, to their hearts’ contents on intrastate student lending.  The Feds’ only role here should be to regulate Commerce…among the several States and not to compete in that commerce.

An Interesting Move

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Work for welfare is a tried and true means of helping folks who need a hand up and further for helping them get out of the government-dependency cage.  Wisconsin is applying an interesting twist to the thing.

Wisconsin is relying on an unusual argument to tie new work requirements to food stamps: it says it needs the workers.

And

[Wisconsin’s] labor force grew 1.2% in 2017, and the state’s jobs listings website shows nearly 100,000 positions unfilled. Mr Walker believes some of the 925,000 people on the state’s FoodShare program could help.

Governor Scott Walker (R):

We can’t afford to have anybody on the sidelines.  This is as much as anything a workforce issue.

Yewbetcha.

This could work.  The program will, though, in addition to helping Wisconsin’s poor and worker shortage, invite movement into Wisconsin by (oh, say) Illinois citizens.  To the extent that jobs remain available from Wisconsin’s historically low unemployment, this would be good.  A risk, though, is that the program might lead to overshooting the jobs available, leaving the costs of the program expanding while its benefits—employment of welfare recipients—stagnate or fall off.

Better than Nothing

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…and good for the region, although not as good as it could have been with US involvement.

Japan, Canada, Mexico and eight other Pacific nations [Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam] are set to sign a new version of the Trans-Pacific Partnership, or TPP, on Thursday.

This is a missed opportunity for the United States and a foreign policy mistake by President Donald Trump.

The goal of the pact is to open borders to more trade in the rapidly growing Asia-Pacific region and to set international standards, which many see as crucial to managing the encroaching dominance of China….

That last illustrates why international trade, in all its forms, is more about foreign policy than it is economics.  The particular, foreign policy, failure has also weakened our ability to influence the People’s Republic of China, on trade, on the South and East China Seas, on northern Korea.