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Larry Grant makes a point in his column last week that should not go ignored: Grant, the chairman of the Idaho Democrats, noted that the State Board of Education voted last month to continue enforcing its mandate that full-time Idaho college students purchase insurance.
Grant thinks he’s exposed an example of hypocrisy — with state officials opposing mandatory health insurance (Obamacare) but supporting it in the case of the state’s students enrolled in higher education. “Every time uninsured people end up in emergency rooms, everyone else pays for it, either in higher insurance premiums for all of us or higher taxes when the county has to pick up the bill,” Grant said.
He has a point, but not the one he was hoping for.
When healthy college students are required to carry health insurance, someone has to pick up the cost. And that someone is college students and their parents. And it’s no small amount of money. Students at Boise State University will see their premiums go up by almost 31 percent to more than $2,100 a year. Idaho State University students will experience the biggest percentage increase in premiums — 46.5 percent to a little less than $1,900 a year. At the University of Idaho, students will pay about $1,500 a year, up 5 percent from the current year.
The Idaho Statesman reported that university officials spoke against a yearlong break in the health insurance mandate out of concern that healthy students would opt to go without insurance and, thus, leave a smaller pool of insured students, which, in turn, would drive up premiums.
Spot the irony? Insurance premiums for college students have gone up — quite significantly — even with the insurance mandate in place. And that’s for a rather healthy participant pool.
Grant thinks this is proof that people who don’t want insurance should be compelled to buy it. Naturally, I think it means people are being compelled to buy an increasingly expensive product for no good reason.
The natural consequence is to force students to graduate college with more debt, amortized over decades, and with nothing to show for it. The result is predictable. The cost for a mandated product has gone up. Mandate that all college students buy bicycles, and I guarantee you that the cost of bicycles will increase in price.
The same is true for the general population. The Obamacare health insurance mandate is causing health insurance costs to increase, not decrease. The effect of this is that more people are choosing to go without insurance. Businesses are choosing to drop coverage. And yes, some college students are choosing to not attend college because they can’t afford the increase in costs.
Grant wants you to believe that people have a societal obligation to buy health insurance. He believes the state Board of Education’s decision to mandate health insurance exposes critics of President Obama for making their anti-insurance mandate case out of political necessity, and not because of a sincere objection to the president’s public policy. He wants you to believe there’s nothing wrong with using the force of government to make people buy a product.
I’d argue that the state’s insurance mandate for college students and the one proposed under Obamacare are in the same camp. Both are an assault on freedom. Both trade liberty for convenience. Both have unintended and unfortunate consequences. Neither public policy deserves support.
WARNING: The Idaho Freedom Foundation’s 2012 Idaho Report on Government Waste is 120 pages long. We recommend scheduling lots of time to read it, or plan several breaks as part of your review of the document. You might consider consulting with a doctor before diving into our research, as it may make your head hurt.
At the U.S. Department of Education, do the names Adam Smith or Milton Friedman ring a bell? Perhaps not.
The U.S. Department of Education has released a 450-page document with new rules for the “for-profit higher education sector.” The agency's intent is to create “gainful employment in a recognized occupation.” We gather “gainful employment” is governmentese for getting a job. Drug dealing and prostitution are “recognized occupations” – but we digress.
Among the provisions is a rule tying federal aid loans to job earnings for students after they graduate. Using the standard of what is good for the goose is equally so for the gander, we'd wonder why the news rule wasn't applied to public institutions as well. Without some balance in its thrust and implementation, this new government regulation could create an unfair playing field among higher education institutions and push students either into more expensive private colleges or into taxpayer-funded public colleges – a clear over-reach of government.
This new rule will not only target for-profit colleges, but the vocational industries that hire these graduates. If a college is unable to retain students enrolled or if after graduation, the students are unable to find work in the field of their degree, the college suffers negative consequences and ill ratings.
The impetus for the 450 pages is said to be the Obama administration’s concern for the debt students are incurring for their education after high school. The administration says that students are not earning enough after graduation to repay their loans, that taxpayers are at risk for loan defaults and that the problem lies with the rapidly growing for-profit higher education industry, rather than the economic crisis facing the nation through poor policies and the administration's absurd notions regarding its own debt.
The best method to prevent taxpayers from assuming defaulted student loans is for the feds to get out of the student loan business altogether and let private lending institutions conduct the process.
Too many policymakers have long used government regulation as the solution for everything. There is another option not being used here, a free-market solution. Rather than implementing more regulations, there should be less. Indeed, the for-profit market is perfectly capable of self-regulating. Free markets result in increased competition among colleges and the lending institutions and decrease the cost of the education. This is simple supply and demand — principles we learn in Economics 101 classes offered at many of the for-profit colleges the administration would like to regulate to death.