Paul Gessing
Paul Gessing is the president of the Rio Grande Foundation, a public policy organization in Albuquerque, New Mexico. Prior to joining the Foundation, he headed up the lobbying efforts of the National Taxpayers Union (NTU) a respected taxpayer-advocacy organization in Washington, DC. At NTU, Paul's portfolio included lobbying before Congress and in the states. He has published articles in the Wall Street Journal, Washington Post, US News & World Reports, and several other major publications. In them he makes the case for Constitutional protections for taxpayers, the economic benefits of tax cuts, and the need for spending restraint. Paul has also testified in Congress and before a variety of state and local bodies in support of taxpayer interests.
Paul graduated from Bowling Green State University in Ohio with a degree in Political Science in 1997 and he received his Masters in Business Administration from the University of Maryland in 2005.
Wednesday, October 8, 2008New Mexico's State Coverage Insurance Program Stops Enrolling, $11,320 annual cost per insuredBy Paul GessingCategories: New Mexico, SCHIPAccording to this recent report from the Albuquerque Journal's Business section (subscription required although a shorter free article is available here), New Mexico's State Coverage Insurance program has stopped enrolling new members at 40,000. This has occurred two years earlier than the government originally expected. SCI is a funded through the federal SCHIP Program. The state pays $100 million per year on the program, approximately 1/4th of the total cost. New Mexico uses SCHIP, a program intended for children, to fund insurance for adults under a waiver that expires in 2010. Because New Mexico already has such generous Medicaid standards, the state couldn't find enough people to spend SCHIP money on, so, in their infinite wisdom, the program was expanded. The result is that between an employer and employee, costs for insurance under SCI come to $110 per insured person, per month. The cost of the program to federal and state taxpayers is $400 million annually and $40,000 people are covered for a total cost of $10,000 per insured person. This leaves a total cost per insured person of $11,320 annually. Considering that my Health Savings account costs my employer a total of $3,600 annually, we the people are getting ripped off big-time. Don't you just love government programs? Couldn't we just give everyone who doesn't have insurance in New Mexico a fully-funded HSA and be done with it?
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Monday, September 29, 2008Health Care: A Rudderless Ship?By Paul GessingWith all the action and talk about the bailout, the health care issue has been moved off the front pages. Nonetheless, there is still discussion back and forth on the issue. Dr. Jim Tryon, a prominent New Mexico doctor who has advised Governor Richardson and others on health care reform, wrote on the topic in the Albuquerque Journal. In his article which can be found here he argues:(Our) health care “system” is a non-system. Can you imagine running a $6 billion dollar enterprise without a chief executive and a board of directors? Without a governance structure there is no way to coordinate the business of health care. Without an empowered governance structure, special interests will continue to rule and protect their individual turf, and profit, at the expense of the whole. Of course, the idea that health care should be a "system" seems like a fallacy to me. After all, a system sounds like something that the government would control from the top-down. Medicare and Medicaid are "systems," but those are not models we should adopt. We don't have a grocery system, but there is no problem getting food at your local supermarket. Rather than creating a "system" -- even a more coherent one than exists now -- adopting reforms in order to free individuals and businesses from unwise government policies would be more sensible than forcing a top-down system on everyone. After all, the fact that so many involved in the health care debate exercise their power to say “No” is probably a good sign that widespread support for any single reform option is not there (thankfully). Maybe we can give greater freedom a try for a change?
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Tuesday, September 23, 2008Can We Make Health Care Worse?By Paul GessingWith Wall Street in crisis and so many issues sucking up airtime, health care as an issue has been pushed from the front pages of America's newspapers. Of course, Albuquerque's alternative weekly still has time to do a story about how our health care system is "poisoned." In fact, from the sound of things, American health care couldn't get any worse. But, if we've learned anything from the ongoing financial debacle, things can always get worse.I point out as much in a follow-up letter to the editor. The fact is that our health care system does certain things very well: Nearly 80 percent of global drug development occurs in the U.S., with only 16 percent coming from Europe. America also leads in high-tech treatments that draw people on waiting lists (or where treatments are simply unavailable) from Canada and the U.K. to get treatment in the U.S. Before adopting policy changes for the simple sake of change, we need to carefully consider whether those changes will harm our ability to continue doing the things we do well and whether we'll really see improvements in those areas where our system struggles.
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Monday, September 15, 2008New Mexico State Pension System Underfunded (but not as bad as other states)By Paul GessingCategories: Government employeesNew Mexico is just one of dozens of states nationwide with massively funded state pension systems. According to this article, "by 2020, coverage will no longer be considered solvent." Also, "the authority has an unfunded liability of about $4.1 billion but that has dropped from about $5 billion." This improvement is the result of rate increases in recent years. Surprisingly, despite the massive shortfall, New Mexico is actually in relatively good shape, at least according to this analysis. There seems to be several major problems here: 1) Politicians have an incentive to over-promise what they pay state workers in the future relative to what they are paid right away. This is a means of cost-shifting onto future politicians and generations; 2) The inevitable tax increases hurt taxpayers even though they are largely unaware of the future massive burden they will be faced with; 3) From a pensioners standpoint, it is tough to be on a fixed income when fees and rates keep rising. The single most important solution to this problem is to move away from defined benefit pension plans and give employees greater control over and responsibility for their own retirements.
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Tuesday, August 12, 2008Bill Richardson Revised Health Care Proposal: Still Moving in the Wrong DirectionBy Paul GessingCategories: New MexicoAfter failing to gain either legislative or popular support for his ambitious, universal health care plan which would have relied heavily on government mandates, Governor Richardson has introduced a scaled-back health care reform proposal that will be considered in the upcoming special session. The Governor’s plan would: • Require all children through the age of 18 to have health care coverage from private or public sources. The bill contains no enforcement mechanism or penalty for parents who don’t secure coverage for their children. • Appropriate $58 million to expand existing programs to reach an estimated 50,000 children who qualify for publicly funded coverage but don’t receive it. The additional spending would recur annually, Hyde said. • Establish a new Health Care Benefits Administration to consolidate management of several existing public coverage programs, including state employee and public retiree insurance plans. • Gradually limit premium increases insurance companies can charge small businesses from 20 percent today to 10 percent per year in five years. • Require insurers to spend at least 85 percent of premiums on services and guarantee that anyone who needs insurance can get it regardless of health status. • Establish privacy requirements for patients’ electronic medical records. While this scaled-back proposal is a significant improvement over the Governor’s original if only because it is scaled back, legislators should still be skeptical as to whether the proposal, if passed, would result in any improvement in New Mexicans’ health care or uninsured rates. Specifically, requiring that parents obtain health care for children through the age of 18 is bound to be ineffective as there is no enforcement mechanism, but this is actually a good thing. After all, responsible parents want their children to be covered, but not all parents are responsible and many others either can’t afford it or believe that putting food on the table and gas in their car to get to work is more important than health insurance for their children. Spending $58 million to put more children who already qualify for government health care on government plans is also a poor option. Rather than spending $58 million every year for more welfare, how about giving parents an equivalent tax break to set up Health Savings Accounts for their children? Regarding efforts to set up a Health Care Benefits Administration, limit premium increases, and set up arbitrary requirements for insurers, these are nothing more than means to further impose government control on the health care sector of New Mexico’s economy. New government agencies and micromanaging the insurance industry are not going to result in significant improvements in either the quality or availability of health care in this state. The fact is that government policies are largely to blame for the current health care mess. Did you know that New Mexico charges the highest tax on insurance premiums in the nation (4.003%)? How about eliminating New Mexico’s gross receipts tax on deductibles and co-pays which are tax-exempt in almost all other states? This tax which in some places exceeds 8 percent in some areas of the state is applied to this ever-increasing area of health care expenses. The aforementioned ideas are just a few ways in which the negative impact of current government policies could be mitigated. They would also be far more likely to succeed in expanding health care access to the greatest number of New Mexicans. While the Governor should be applauded for scaling back his mandate-heavy original proposal, the Governor’s scaled-back proposal still moves us towards an increased government role in health care. Hopefully, legislators will again reject more government reliance and instead consider market-based reforms outlined above in the upcoming 2009 legislative session.
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Monday, August 11, 2008Why is there no Doggie Health Care Crisis?By Paul GessingSeveral months ago I wrote on this site about dog health care vs. human health care. John Goodman, one of the nation's free market health care analysts has picked up on that theme on his NCPA health blog. Check out his posting here. As Goodman points out: Why does the market for pet care seem to work so much better than the market for human care? Not that I pay a great deal of attention to such things, but I believe it's fair to say that:
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Friday, August 8, 2008How Government Health Care Would WorkA New, 30-second commercial from New Mexico By Paul Gessing"Universal," government-mandated health care may not become law in New Mexico during the upcoming special session, but that doesn't mean that it couldn't happen in the near future. Check out this video which illustrates in stark detail how health care might work if we put government in charge.
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Sunday, August 3, 2008New Mexico Should Take a Tip on Medicaid Reform from Rhode IslandBy Paul GessingCategories: New Mexico, Rhode IslandA recent article from the Heartland Institute's Health Care News discusses a proposal by Rhode Island Gov. Don Carcieri (R) that would result in the state agreeing to a five-year federal spending cap on Medicaid in exchange for more autonomy over its Medicaid programs. The proposal is expected to save taxpayers $67 million. Most states, like New Mexico, prefer to invest in creative ways to raid the federal treasury to fund their out-of-control Medicaid programs. Rhode Island is wisely attempting to take responsibility for managing a limited budget in the interests of their own citizens. While it looks like Governor Richardson's health care plan will not progress in its entirety during the upcoming special session, his plan relies on a massive new Medicaid spending both nationally and by New Mexico. It would be nice if Richardson (or New Mexico's next governor) would take a close look at what Rhode Island is trying to do instead. After all, we can't live at others' expense forever.
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Tuesday, July 22, 2008Fortenberry Bill a Fresh (Market-Based) Approach to Health Care ReformBy Paul GessingNo matter who wins the White House in November, health care reform is destined to be at the top of the domestic policy agenda for the next President. Unfortunately, most of the “reform” momentum seems to be on the side of those – like Hillary Clinton and Barack Obama – who would dramatically increase the role of government in providing and regulating care. To counteract that trend, Rep. Jeff Fortenberry (R-NE) has a new plan.Fortenberry (R-NE) has introduced H.R.6280, “America’s Affordable Health Care Act” which gives consumers access to more affordable, less-heavily regulated health insurance policies. The bill would permit insurance companies to offer up to three “health benefit plans” or policies with limited benefit mandates, thus providing cheaper policies for those who desire them. Individuals and families struggling to find coverage would have the option of purchasing these cheaper plans through the individual market. This could have a major, positive impact in mitigating the uninsured problem that those on the left so often use to promote use to justify additional government meddling in the health care marketplace to achieve “universal” health care. States strictly control which health insurance policies can be offered to residents. Unfortunately, over time, special interests have successfully lobbied legislatures to force insurance companies to cover particular services. Everything from alcoholism to hair prostheses and morbid obesity is covered by law in particular states depending on the law. As of 2008, New Mexico has 51 mandates while Minnesota has the most in the nation with 64 and Idaho has the least with only 15. According to the Council for Affordable Health Insurance mandates can drive the costs of health insurance up from a little less than 20% to more than 50%, depending on the state and its mandates. Other studies estimate that benefit mandates price as many as 1 in 4 Americans who are uninsured out of the individual market. Currently, sixteen states allow individuals and families to purchase insurance plans with limited mandates. Fortenberry’s bill builds on the efforts in those states. The bill also enhances portability by allowing reciprocal agreements between insurance companies. This will make it easier for individuals to take their benefits with them from one insurance company to the next. Finally, the bill expands and encourages the development of “best practice protocols” for state high-risk pools. State high-risk pools help people who are uninsurable in the private market to get health coverage. Fortenberry’s bill expands funding for them. Further, some high risk pools work well, while others do not. By encouraging the development of best practice protocols, states will have guidelines they can use to improve the performance of their high-risk pools. Fortenberry’s attempt to mitigate the impact of mandates is not entirely new. Representative John Shadegg (R-AZ) has been promoting his own concept which is contained in the Health Care Choice Act, HR 4460. Shadegg’s bill gets at the problem of burdensome regulation by letting people purchase health insurance out of state. But the 2005 legislation, which was introduced when Republicans still controlled both houses of Congress, ran into major opposition from Blue Cross Blue Shield plans which benefit from majority market share in many states. The Shadegg approach is the ideal means of demolishing state health insurance monopolies because it would not only force states to compete on the basis of mandates, but it would also spur competition with rate regulation, community rating, and other factors that drive up health care premiums. But now that the Shadegg idea is largely being fought at the state level—seven states have introduced versions of the Health Care Choice Act—Fortenberry’s legislation would be a big step towards achieving federal-level reform. That makes Fortenberry’s plan worthy of consideration by conservatives and market advocates.
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Sunday, June 29, 2008More Americans Delay CareBy Paul GessingAccording to a new study from the Center for Studying Health System Change, more Americans delayed "necessary" care in 2007. According to a write up in the Wall Street Journal:
Obviously as costs increase and patients are forced to pay a greater percentage of their care, this result was inevitable. The question is, how "necessary" is necessary and is this trend necessarily a bad thing? After all, while there are certainly "cut-and-dry" cases when immediate treatment is a must, one's definition of "needed" changes dramatically based on who is paying for the care.
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