This has been a busy, busy, busy week. Today has given me a bit of a breather, so here are a few topics from the news that are worth some deep discussion:
- The Underlying Dilemma of Health Insurance. The LA Times has an article titled “Putting a price on prolonging a doomed life“, telling the story of a man who had to fight his health care insurer to get an experimental procedures his doctor wanted to prolong his life. This raises all sorts of questions, especially as most of us are insulated from the actual cost of the procedures we get or the medicines we take. First and foremost, I’ll note that we should be able to get any medicine or procedure we want… assuming we can pay for it in full ourselves. Most of us, however, cannot pay full fare, so we need to get health insurance to cover it, and that is where practicality meets sentimentality. From a business point of view, it is reasonable for health insurers to want to pay only for things that are cost effective and known to be efficacious. To do otherwise would be a waste of premiums, and might deny funds to another subscriber. This is why we get directed to generics, to drugs on a formulary, to well-known procedures. But when the insured is a loved one, we want all measures taken, damn the cost. Balancing these two decisions is the hard part, and failure to do so is one reason behind our escalating health care costs.
- Pay Me Now or Pay Me Later. Amazon is attempting to get out of California’s demand it pay sales taxes by offering instead to build warehouses in the state, employing 7,000 people, and providing California purchasers with the information they need to pay Use Taxes. What should the state, which needs money, do? Amazon wants to be exempt from sales taxes so the prices on their website have a competitive advantage over physical retailers in California. They sell more books, and thus make more profits. Arguably, they are selling in California, and the Sales/Use Tax must be paid anyway. If they employ people, those people will (a) have jobs, (b) pay taxes, and (c) consume more, improving the states economy. However, California purchasers would have to pay the Use Tax themselves… and most won’t. So which will bring in more money: Amazon paying sales tax, or the ancillary effect of the jobs?
- Pricing Disasters. Although the teapartiers won’t admit this, government does have a function. Government should provide those things that it makes no economic sense for private folks to provide. Public goods, such as lighthouses are a classic example. So where does disaster response fit into this? Hurricane Irene devistated states such as Vermont and New York that are not thought of as traditional hurricane states. Those states didn’t have insurance, so should government pick up the cost? Another billion dollar disaster looms from the current tropical storm in the Gulf. Throughout all of this, we have an underfunded Flood Insurance program, and underfunded FEMA… and the Republicans saying that folks should have been prepared for the disasters, and government shouldn’t have to pay. Democrats counter that this is the purpose of government, and one reason why governments occasionally take on additional debt. What’s your thought? Is this a government responsibility?
