Trade War Gets Real As Walmart Increases Prices

In the latest sign that the trade is starting to affect the greater economy, Walmart has announced that President Trump’s tariffs on Chinese goods will lead to increased prices at the giant retail chain.

“We're going to continue to do everything we can to keep prices low. That's who we are. However, increased tariffs will lead to increased prices, we believe, for our customers,” CNN reported that Walmart Chief Financial Officer Brett Biggs told reporters on a conference call discussing earnings for the first quarter of 2019.

Biggs did not say which products would be subject to the price increases, but President Trump’s most recent round of tariffs, which applied a 25 percent import tax to $200 billion of Chinese goods, affects a wide range of products that are purchased by a large number of Americans. Per CNN, Walmart imports about 26 percent of its merchandise from China and with a Walmart store within 10 miles of 90 percent of Americans, the vast majority of the country will be paying more for consumer goods.

Walmart’s announcement undercuts the president’s claim that China is paying the tariff taxes. Instead, Chinese manufacturers have largely kept their old pricing structure and American importers have paid the tax. Importers pass the tax along to retailers like Walmart, who are now passing it along to their customers.

The Walmart price increases will hit a core segment of the Trump coalition. Walmart is known for its blue-collar clientele and the fact that its stores are often the only option for many items in rural areas. It is these blue-collar, rural voters who have formed the most stable part of Trump’s base as support for Republicans among most other demographics has declined since 2014.

Depending on the length of the trade war and whether more tariffs are applied in coming months, Trump may find that his rural base fracturing. Already farmers, who are among the hardest hit from the trade war, are showing their discontent with the policies that have closed off Chinese markets for American agricultural products.

“We’re in a free fall out here in agriculture. We've seen a 30 percent decrease in prices of soybeans, and this isn't all about soybeans,” Christopher Gibbs, an Ohio farmer said on CNN. “With the geopolitical turmoil that the president has thrown into the mix over the last year, the markets just don't have anywhere to go.”

Now, with Walmart and other retailers raising prices to pass along Trump’s tariff tax to their customers, farmers and other exporters are being squeezed from both sides. They are earning less as foreign markets find cheaper, untaxed alternatives to American goods and they are paying more due to price increases.

As we’ve reported previously, Morning Consult tracks presidential approval across the 50 states. Polling this year shows Trump underwater across the Rust Belt and with a net approval of fewer than five points in many typically Republican farm states such as Georgia, Indiana, Nebraska, and Texas. Unless the president gets a deal to resolve the trade war with China soon, we may find out how low he can go.

Originally published on The Resurgent

Jade Helm Walmart investigation at Midland, Texas

Midland, Texas is in the heart of the Texas oil country. Founded in 1881 as the halfway point on the railroad between Fort Worth and El Paso, Midland was originally a cattle town. In 1923, oil was discovered there and the town boomed. Many of the downtown buildings still reflect the art deco construction of the 1920s and 1930s. The city gained fame in the early 2000s as the hometown of President George W. Bush. Today, Midland is feeling the effects of the most recent oil bust, but is even more famous for something else: a closed Walmart.

Until recently Midland was a two Walmart town. One store was located on the north side of town and another the south. That changed in April when the retailer suddenly closed the north side store along with other stores in Livingston, Texas, Pico Rivera, Calif., Tulsa, Okla., and Brandon, Fla. The Midland store closing included layoffs for most of the 456 employees according to the Dallas Morning News. The Midland Reporter-Telegram notes that the store will be closed for approximately six months. Other area businesses are concerned because they benefit from the customers that Walmart draws to the area.

Almost immediately, conspiracy theorists linked the sudden store closings to an upcoming military exercise, Jade Helm 15, set to take place in the southwestern states this summer. The conspiracy theorists fear that the exercise is a cover for the Obama Administration to implement martial law. This theory is based on a map in a military briefing that designates Texas as “hostile” for the purposes of the exercise.

The tie-in to Walmart stems from the company’s claim that the stores were closed because of plumbing problems. A Walmart statement said, “Each of these five locations had more than 100 plumbing problems reported over the last two years, the most out of our more than 5,000 stores in the U.S.” according to the Dallas Morning News.

An employee group disputes the plumbing claim. OUR Walmart filed a dispute with the National Labor Relations Board claiming that the stores were closed because of labor activism, noting that the Pico Rivera store was the first store where workers protested the company. The Dallas Morning News reports that the group is seeking an injunction to force Walmart to rehire the workers.

Last month, Examiner sent an investigative team to the Livingston, Texas Walmart to investigate reports of a military buildup in the store in conjunction with Jade Helm. Yesterday, the same team was sent to investigate the Midland store.

The closed Midland Walmart, like many Walmarts around the country, is in a high traffic area. The store is in a busy shopping area and several restaurants are adjacent to the parking lot. Another shopping center and more restaurants are across the street. A road runs along the back side of the Walmart and a gas station sits at the back corner of the store’s lot. The loading docks are easily visible to passersby. Any suspicious activity would be quickly noticed by the multitudes of diners and shoppers in the area.

Also unlike the Livingston Walmart, the Murphy Express gas station in Midland was still open for business. Most of the entrances to the Walmart parking lot were roped off, but there was still access from two sides. This allowed a steady stream of cars to purchase the Murphy Express’s cheap gasoline.

Unlike the Livingston Walmart, the Midland store is locked down and deserted. There were no cars or employees except for a solitary private security guard. When first glimpsed by the Examiner team, she was outside her truck, seemingly dozing on a shaded bench on the warm, Sunday afternoon.

When approached by the Examiner team, the guard said that she had not seen any suspicious activity and that there had been no sign of any military vehicles or personnel. She said that there had been quite a few civilians who were curious about the store closings and the conspiracy claims. She said that some of the other guards who had worked the night shift had reported suspicious civilians trying to find out what was inside the store.

The guard did not patrol inside the store, but said that, in the weeks after the closing, there had been many employees working inside to “take everything out,” presumably unsold stock as well as shelves and furnishings. More recently, there had been no activity at the store at all.

“It gets really boring,” she said.

Examiner was able to take photographs of every side of the store. There was no evidence of any other guards or activity. There were no military vehicles, either trucks or aircraft.

Previous reports of military vehicles and aircraft around the Midland Walmart, if not totally fabricated, may be easily explained. First, Walmart stores often allow trucks and recreational vehicles to park overnight. The large – now empty – parking lots with numerous restaurants in the proximity might also make an attractive stopping point for military convoys, especially since many Walmarts, including those in Livingston and Midland, are close to interstate highways.

In Midland, the presence of military aircraft can be explained by the proximity to Midland International Airport (KMAF). The map in the slide show shows that the closed Walmart is located about five miles from Midland International and under a common flight path for arriving aircraft. It would not be unusual to see both military and civilian aircraft flying low in this area. There do not seem to be any reports of military aircraft actually landing at the Walmart.

Texas is home to a multitude of military bases. Army vehicles and helicopters around Midland may well be traveling to or from Fort Hood, a large base some 200 miles away that is home to 1^st Cavalry Division as well as other units.

As with the Livingston Walmart, the Examiner team saw no reason to believe that there was any suspicious activity, military or otherwise, at the Midland Walmart. Differences in activity between Midland and Livingston may well reflect different stages in the process of removing items from the store and readying the buildings for renovation.

See the slideshow here.

Read the full article on Examiner.com

Visit to a Jade Helm Walmart

Deep the heart of Texas, about an hour north of Houston up Highway 59, lies the small town of Livingston. According to the sign at the city limits, Livingston is the home to 5,335 people. There are numerous businesses and civic organizations including, until recently, a Walmart.

The closure of Livingston’s Walmart puts the small Texas town at the center of a conspiracy theory regarding an alleged plot to impose martial law on seven U.S. states this summer. The theory holds that a military exercise, codenamed “Jade Helm 15,” is a cover for soldiers to take positions across the southwest in order for the government to implement martial law. When Walmart announced five store closings earlier this month, including two in Texas and one in California, many websites arrived at the conclusion that the Walmarts were being coopted by the military either as staging areas for Jade Helm or detention areas for detainees who would be arrested under martial law. Examiner investigators went to Livingston, home of one of the two closed Walmarts in Texas, to look into these allegations.

The Livingston Walmart is located in a bustling business district about a quarter-mile from Highway 59. The area is heavily trafficked and there are numerous other businesses, both large and small, nearby. A Lowe’s home improvement store and HEB grocery store were both located within a short distance. Like many Walmart stores, this one appeared to have been built on the outskirts of town and drew other businesses around it.

The first impression upon arriving at Livingston’s Walmart is that the store is far from abandoned. The parking lot is relatively full of civilian vehicles. Blue-shirted Walmart associates walk to and from the building from their cars. There are also landscape crews in the parking lot.

The Livingston Walmart is a standalone super center. From a distance, the only indication that the store is not open are large white banners that say “store temporarily closed” that hang near the Walmart sign on the store front. The garden center, enclosed by a fence, is bare.

Across the parking lot is a Taco Bell that appears to be open. A separate strip mall to the west side of the parking lot contains several other businesses and is served by a separate parking lot. A Murphy Express gas station, a brand frequently collocated with Walmart, in the parking lot is also closed.

One of the two main entrances is closed. Employees are entering and exiting from the second. We approach the open door and enter through the open glass doors.

Inside, rather than the typical gaping cavern of a Walmart interior, there are temporary walls that form something like a lobby with two doors, one to each side, that lead to the interior of the store. Facing the exterior doors is a folding table with a sign that says “associate sign-in.” At the table sit a Walmart employee and a Livingston city policeman.

We identify ourselves as writers investigating the Jade Helm-Walmart connection and ask to speak with a store manager. The Walmart employee, a middle-aged blonde woman, answers that the managers are not answering questions or giving interviews.

We ask the pair if there has been any suspicious activity and the policeman answers, “Not that I’ve seen.” He adds, “Does it sound like any training is going on?”

The sounds coming from inside do not sound like training. They sound like construction. Drills, hammers and associated noises that would be consistent with a store renovation.

There are windows in the two doors that lead to the interior. What is visible through the windows, looks like a typical Walmart store.

We ask if they know when the store will reopen and both reply that they do not. The work going on inside makes it apparent that Walmart does plan to reopen the store, contrary to the fears of many local residents. KHOU 11 reported that many residents fear that the store is gone forever, along with 422 jobs. Losing the Walmart is a major blow to the local economy.

Taking our leave, we return to our vehicle and drive around the side of the Walmart to where the Tire and Lube Express is located. This entrance is closed as well. The only thing that looks unusual is a large group of pallets piled high with plastic bags marked as mulch, peat moss, and other garden products. These are likely destined for the empty garden center when the store is restocked.

Continuing to the rear of the store, we see… nothing. There are a couple of Walmart trucks at the store’s loading docks, but no people. As we drive around the store, we are unchallenged by police or security.

In light of the conspiracy theories, the most notable absence is any sign of military activity. In spite of some reports of soldiers, military vehicles and helicopters at or near the closed Walmarts, there was no sign of any military activity in Livingston, either near the Walmart or elsewhere. There are no convoys on the interstates, no trains filled with tanks, no uniformed personnel other than the one policeman, and no suspicious men loitering with strange bulges under their shirts. We don’t even see any AH-64 Apache helicopters, a common sight in this part of Texas due to the proximity of army bases and military flight training routes.

As a result of our investigation in Livingston, we have to conclude that there is no evidence to support the theory that Walmarts are being used in conjunction with the military Jade Helm exercise. In fact the only thing to support a connection between the two events, other than pure conjecture, is the timing and location of the store closings.

Even this connection is tenuous. Of the five store closings, only three are in states where Jade Helm will take place. Another closing is in Oklahoma, which borders the Jade Helm area, but the fifth is in Florida, on the other side of the country. Additionally, the closings began almost three months before Jade Helm’s kickoff on July 15. This may even mean that the renovations can be completed and the stores reopened before Jade Helm begins.

The biggest flaw in the conspiracy may be Walmart’s own claim that the store closings are due to plumbing repairs and renovations. It is unlikely that a major corporation would allow the federal government or other unknown forces to seize five stores without putting up resistance. In other cases of government overreach, businesses have fought federal mandates in the courts and won.

 

Read the full article and see more pictures on Examiner.com

Health care reform after Obamacare

The Supreme Court’s ruling that upheld Obamacare does not mean that the law’s days are not numbered. It is likely that Republicans will sweep this year’s elections and repeal the law before it goes into effect. If the law does go into effect, the Court’s decision that Congress cannot force the states to participate in the Medicare expansion contained in the law means that the complex law is even more unworkable. Gov. Nathan Deal told Georgia Health News that the state had not made a decision on whether to participate in the Medicare expansion. Without major reform, Obamacare will collapse under its own weight, wreaking havoc on the American health care system and the federal deficit as it does so.

The question is what comes after repeal. The status quo of the health industry is also untenable. Reform is badly needed, but it should focus on lowering health care costs through free markets and competition. Obamacare does nothing to lower costs. To the contrary, it increases them and then mandates that people buy the more expensive insurance.

Successful healthcare reform will have several aspects that Obamacare did not. First, successful reform will be bipartisan. The Affordable Care Act was one party’s vision of how the health insurance industry would work. It was crafted in secret behind closed doors and passed by a party line vote that required the procedural trick of using a budget reconciliation to avoid a Republican filibuster. Democrats did not seek Republican input and failed to win a single Republican vote in either house.

Second, successful health care reform must reduce the costs of health care and insurance. If insurance is made more affordable through market reforms, more people will want insurance. The Affordable Care Act essentially ignored competition and the marketplace in exchange for top-down mandates, price controls, and government collusion with the pharmaceutical industry. The result was an immediate increase in the price of health insurance. Many insurers also stopped writing unprofitable policies, resulting in shortages in some markets.

Finally, successful health care reform will simplify and streamline regulations for the industry. The Affordable Care Act, at 2,409 pages, was neither simple, streamlined, nor efficient. It included at least 18 new tax increases, $19 billion in spending through 2013, and created 159 new federal agencies and programs. The bill was so complex that Nancy Pelosi, at the time the Speaker of the House, famously said in a Fox News clip, “We have to pass the bill so that you can find out what is in it.”

Successful health care reform would re-introduce competition into the health care marketplace. There are several ways of doing this. One is to stop the favorable treatment of employer health plans. Currently, premiums for employer-provided health plans are not taxed, but, if a worker wants to buy an individual policy instead of the one at work, premiums are not tax-deductible unless their medical expenses exceed 7.5 percent of their Adjusted Gross Income. If premiums for all health insurance were deductible, it would provide an incentive for people to shop around for the insurance that best suits their own needs.

Another common theme in competition is encouraging states to allow their residents to buy and sell insurance across state lines. The effect here would be two-fold. First, it would provide a larger market for the state’s insurance companies. If the state’s companies offer quality insurance at competitive prices, their sales and profits should increase. Economies of scale would drive down prices.

Second, states that do not have competitive health insurance laws would see their business go to other states. Each state sets it own standards and regulations for health insurance. States that mandate more benefits typically have higher costs for insurance. By allowing interstate insurance sales, citizens of states where insurance is expensive could buy more basic policies in other states. If the insurance companies and state governments see a sufficient loss of sales in highly regulated states, it would encourage reforms to allow them to compete. Otherwise, the insurance companies would go out of business and the state would lose tax revenue.

A third idea is to open more low-cost clinics. In many cases, patients at a doctor’s office never see a doctor for a routine visit. Instead they are treated by a nurse practitioner. In recent years, pharmacies and retail stores such as Wal-mart and Target have opened small health clinics. These clinics are a boon to the working poor because they often do not require appointments, they provide a fast resolution for routine medical problems, and they are much less expensive than an emergency room or traditional doctor’s office. Additionally, these clinics often have extended hours and are open on weekends. For more complex problems, the clinics refer patients to local primary care physicians or hospitals. The Journal of the American Medical Association sees retail clinics as a way to deal with the current shortage of physicians and as a way for every American to have medical care within a few miles.

Partnerships with private companies provide a great resource for helping to lower health care costs that was totally ignored by the authors of the Affordable Care Act. The possibilities can be seen in Wal-mart’s $4 generic prescription plan. The plan, introduced in 2006, was quickly matched by other retail pharmacies. Today, customers of Publix can even get prescription antibiotics at no cost. The downward pressure on prescription prices started by Wal-mart arguably did more to help consumers than the federal government’s prescription drug entitlement and it was accomplished without government mandates and at no cost to taxpayers.

If the goal of health care reform is to cover as many Americans with health insurance as possible, then it is only logical that reform should reduce the price of health insurance as much as possible. Basic economic law states that as price decreases, demand for a product increases. As health insurance premiums go down, more people will buy policies.

One answer to the high price of health insurance is to allow and encourage companies to write no-frills major medical policies. Every time government mandates that health insurance offer a new benefit, the price goes up. Major medical policies don’t cover everything from mental health to Viagra, but they do protect people against the cost of a catastrophic illness. This is all many people want or need. Consumers should be able to choose high deductibles and be allowed to opt out of coverages like pregnancy, preventive medicine, and contraception in exchange for lower premiums. When regulators try to make a policy all things for all people, the result is expensive and prices many people out of the market.

Additionally, health care pricing should be made more transparent. Few people know how much a visit to the doctor’s office actually costs because most people with insurance pay only a predetermined copay, $20 for example. The only way to find out the actual cost of the visit is to look at insurance documents long after the visit. Such a system makes it impossible to compare prices of competing physicians and hospitals and encourages increased consumption. These factors drive up the cost of health care by limiting the exposure of consumers to the true costs.

Similarly, participants in government programs such as Medicaid and Medicare consume health care at prices that are below market rates according to the Washington Post. The deficit from these government price controls is then passed along to private consumers, further increasing health care costs for everyone else. True health care reform must take steps to control the costs of Medicare and Medicaid, while preserving these programs as safety nets for the truly needy. The Republican “Path to Prosperity” budget plan includes provisions to reform Medicare according to Kaiser Health.

One popular provision of the Affordable Care Act is the requirement that insurance companies cover people with pre-existing conditions at below-market rates. The problem is that the rule gives people an incentive to not purchase insurance until they are sick. A better solution to the problem of pre-existing conditions would be to create assigned risk pools at the state level.

In an assigned risk pool, states require insurance companies to accept otherwise uninsurable customers in proportion to the amount of business that they do in the state. Because these policies are high in risk to the insurance company, their premiums and deductibles are higher. This encourages people not to wait until they are sick to purchase insurance. Georgia has long had assigned risk pools for auto and home insurance. Such a proven concept would make sense for health insurance as well.

A final path to lowering health care costs is tort reform. Tort reform involves limiting the ability of patients to sue for medical malpractice. Malpractice lawsuits, sometimes with outrageously large punitive damage awards, have caused premiums for malpractice insurance policies to increase. This higher cost is then passed along to consumers by doctors and hospitals. Tort reform does not prohibit lawsuits or collecting legitimate damages, but it does discourage frivolous lawsuits and excessive punitive damage awards. Understandably, lawyers oppose tort reform and, because lawyers are a Democratic constituency, Obamacare did not address the issue.

Texas passed a tort reform law in 2003. My San Antonio says that before the reform one in four doctors was sued each year. Eighty-five percent of the suits never went to trial, but still cost an average of $50,000 to defend. Cases that went to trial cost $1.4 million each. These costs led to increased insurance costs for doctors and, ultimately, higher costs for consumers.

According to American Medical News, malpractice insurance premiums have decreased by 30 percent since the law was enacted. The state also saw medical license applications increase by 83 percent when compared with before the reform. A spokeswoman for Gov. Rick Perry said, “Comprehensive medical liability reform has improved access to medical care, particularly in underserved areas….”

Mississippi’s experience was similar. Tort reform was enacted there in 2004. In the following years, malpractice insurance rates fell sharply, lawsuits decreased by 90 percent, and doctors stopped fleeing the state according to a 2008 Wall Street Journal article cited on the blog Captain Kudzu.

There is no single answer for how best to reform the health care industry. Solutions should consider economic realities as well as the needs and desires of the American people. Instead of federal mandates, states should be encouraged to experiment with their own solutions. Obamacare, which became law over the overwhelming opposition of the people, does none of that and is destined to fail.

Read this article on Examiner.com:

http://www.examiner.com/article/health-care-reform-after-obamacare

My Healthcare Reform Plan

Healthcare reform will be a major issue in the 2008 elections. Both Democratic presidential candidates have proposed major government programs to subsidize health insurance premiums as well as sweeping new regulations to improve coverage and lower costs. These plans ignore several key aspects of the healthcare crisis and would substitute government regulation for market pressures. Ultimately, these flaws would mean that government healthcare plans would be costly and ineffective.

One of the major flaws in the Democratic plans is that they do not address tort reform. Currently, malpractice insurance premiums resulting from civil liability suits are a major source of increasing healthcare costs. Since 1994, the average award in a medical malpractice case has risen to $3.5 million. Over 70% of cases are without merit, but defending against them costs doctors and insurance companies millions of dollars, even if they win.

The high cost of malpractice insurance is influencing many doctors to leave the profession. OB/GYNs have been particularly hard hit. In several states, finding a doctor who will deliver babies is difficult due to the high cost of malpractice insurance. Many insurance companies are exiting the malpractice insurance business because of losses. As fewer companies write these policies, premium costs rise for the remaining insurers.

Rising insurance costs are not the only problem stemming from the legal liability crisis. In order to protect themselves from lawsuits, most doctors order tests that are medically unnecessary and refer patients to specialists that they really do not need to see. These unnecessary tests and doctor visits contribute as much as $108 billion in unneeded medical costs. 92% of doctors report that they engage in defensive medicine that, in the end, costs patients and insurance companies more money.

Legal reforms to the tort system, such as limiting awards for punitive damages, “could reduce health care costs by 5-9% without adversely affecting quality of care.” This could save from $60 to $108 billion annually. These savings would lower the cost of health insurance and make it more affordable for Americans.

Another way to help make health insurance affordable for Americans is to offer financial incentives. HSAs allow individuals to deposit pre-tax money into an account to pay for medical expenses and purchase high-deductible health insurance plans. Similarly, Flexible Spending Accounts (FSAs) allow individuals to use pre-tax money to pay for medical expenses. Because individuals spend their own money in HSAs and FSAs, they are encouraged to shop around for the best prices when they buy healthcare.

There are several problems with HSAs and FSAs. Contributions must be elected in advance. If the money in your account is not used before the end of the year, it is forfeited. This eliminates the some of the incentive to shop around for competitive prices.

These accounts could be improved in several ways. First, a tax credit should be given for premiums paid for health insurance policies. A credit on taxes for premiums paid would encourage more people to buy their own insurance. Second, the accounts should be changed to allow the balances to accrue from year to year. This would eliminate the rush to spend unused money at the end of the year and allow people to save for anticipated medical expenditures, such as a pregnancy.

Current health insurance plans have insulated consumers from market pressures. Insurance co-payments have eliminated the need to shop for the best deal on medical care because the consumer pays the same price for any doctor and the insurance company pays the balance. In most cases, the consumer does not even know the actual cost of their doctor visit. If health insurance plans were modified to require that consumers pay a percentage of the total cost instead of a set fee, consumers would be encouraged to shop for the most cost effective care. Reintroducing competition would begin to put a downward pressure on healthcare costs.

There are other areas in which competition is already reducing healthcare costs. In 2006, Wal-mart introduced a program to offer certain generic prescriptions for $4. The program has since been expanded to more drugs and matched by several other pharmacies. This has made Wal-mart much more effective at reducing the cost of medicine than the federal government.

Similarly, private chains, such as Wal-mart and Target, are introducing medical clinics into many of their stores. These clinics are often staffed by nurses and offer simple treatments that do not require a doctor’s care. Costs are kept down by keeping overhead low. There are no facilities for extensive testing. Serious illnesses would require referral to a traditional doctor’s office or hospital. Many even require patients to process their own claim if they have health insurance.

These in-store clinics expand access to affordable health care. Many patients who visit these clinics would have normally gone to an emergency room and incurred a bill of hundreds of dollars. Many treatments at in-store clinics cost less than $50, even without insurance. Additionally, they are quick and convenient. An emergency room or doctor’s office visit would have taken several hours. A clinic visit can take less than an hour, even including wait time. Clinics also frequently have longer hours of operation than traditional doctor’s offices.

These private companies are not bringing low prices to healthcare solely out of altruism. There is a profit to be made. When a consumer visits an in-store clinic or buys a $4 prescription, they are more likely to bring other business to the store as well. For instance, people might shop for groceries while waiting for their prescriptions to be filled. This creates a win-win situation for both parties without any government subsidies.

Another method of reducing healthcare costs would be to decrease government regulation. Currently, each state regulates health insurance within its borders. Therefore, there are fifty different sets of rules and regulations for insurance companies to follow. In many cases, these regulations add needlessly to insurance costs.

Coverages mandated by the government require increases in insurance premiums. For example, some states mandate that all health insurance must contain coverage for pregnancy. If a consumer does not want pregnancy coverage, if they do not want or cannot have children, they must still pay the increased premiums. Similar mandates for coverages such as co-payments, Viagra, elective surgery, mental health benefits, and chiropractic all serve to increase health insurance costs. It is increasingly difficult to obtain a no-frills, high deductible, major medical plan even though such a plan would provide an inexpensive source of health coverage in the event of a catastrophic illness or accident.

A simple solution to the problem of over-regulation is to allow policies to be sold across state lines. Consumers in highly regulated states who can currently only buy expensive policies would be allowed to purchase cheaper policies from states with less regulation. This would allow more Americans to buy health insurance that would protect them from a major illness, even if it did not pay for each and every doctor visit or prescription.

A secondary benefit of interstate policy sales would be pressure from insurance companies to simplify regulation in expensive states. If sales began decreasing as consumers shopped out of state, legislatures would be forced to make their insurance regulations more competitive. Without change, the insurance industries in their states would continue to decline and lose sales to more competitive states.

A new trend in health insurance is for employers to give their workers an allowance to pay for an individual health policy rather than purchasing a group plan. This is allows the employee to choose coverage that is important to them, while shopping for the most cost-effective plan. If this trend continues, prices would fall as more companies compete for more individual business rather than a monopoly for policies covering a company’s employee group.

An additional problem with the Democratic health plans is that they overstate the severity of the healthcare crisis. Many advocates of a government takeover of the healthcare industry claim that 40-50 million Americans are uninsured. In reality, those numbers are inaccurate because they include noncitizens, people who choose not to purchase insurance even though they can afford it, and people who qualify for government insurance, but have not signed up.

Government statistics indicate that 45% of the uninsured lack insurance because of job changes. These people will become covered again within a few months. Approximately ten million of the uninsured are not citizens of the US. According to a Census report, there are approximately 17 million Americans without insurance who earn more than $50,000 per year. These people can afford health insurance but choose not to purchase it. One prominent study places the true figure for the long-term uninsured as low as 8.2 million.

In a free society, we must accept the fact that some people will make poor, even stupid, choices. Many of the people who elect not to purchase health insurance do so because they are in good health and do not feel that they need insurance. In many cases, they are correct, but sometimes a sudden illness or accident leaves them with large medical bills. This is the result of a deliberate choice that they must live with.

In other cases, health insurance becomes unaffordable or is canceled after a person suffers an illness. Health insurance plans should have renewals guaranteed as life insurance policies do now. A consumer would have the right to renew their health insurance policy regardless of changes in their health during the policy period. Rate increases would be spread over the entire pool of policyholders rather than targeted at those who had incurred large claims.

Some people would remain uninsurable. People with illnesses such as AIDS, cancer, and diabetes should have access to insurance coverage even if they are too high risk for the private insurance market. This is where the government can have a role. In some states, the government currently operates a high-risk insurance pool for people who cannot qualify for private insurance, such as those who have bankruptcies or who own homes in hurricane areas. A similar program for those who cannot qualify for private health insurance would solve the uninsured crisis. The pool could be funded by a small tax added to private health insurance policies sold in the state.

Price controls and increased regulation are ideas that would ultimately be unsuccessful at controlling rising healthcare costs. Price controls would lead to shortages as people and companies leave healthcare for more profitable businesses. Increased regulation would add to the cost of treatments and health insurance.

The government has proven its inability to efficiently manage healthcare in several areas. VA hospitals are notoriously inefficient and often poorly run. Medicare recently announced that it will pay out more than it takes in 2011 and be bankrupt by 2019. Bureaucratic red tape prevents people from getting the care that they are entitled to, while fraud runs rampant. A national government health insurance bureaucracy would likely bring the efficiency and customer service of the Post Office and Department of Motor Vehicles to the healthcare industry. As Americans, we should expect better.

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