Finding Market-Based Solutions to Health Care

Health care is a critical issue for Arizonans, particularly in light of the current environment we all find ourselves living in. However, the answer to reducing costs, increasing access, and improving quality does not lie in heavy-handed, one-size-fits-all “solutions” that would cede control of our health care system to the federal government. Proposals like the public option would only cost taxpayers and reduce access while delivering an inferior quality of care.

Hard-working Arizonans—and all Americans—deserve better than that. Instead of trying to create a new, government-controlled health care insurance system, our leaders in Washington should concentrate on finding market-based solutions to improve current system by building on what’s working and eliminating or addressing what isn’t.

A public option would disrupt the insurance marketplace, pushing private and employer-sponsored plans out of the market because they would be unable to compete on an unlevel playing field. Eventually, the public option would be the last option standing, leading to fewer choices and less flexibility for individuals. 

Moreover, if enacted, the public option could become the third-most expensive government program in the country, coming in just behind Medicare and Social Security, both of which face their own set of problems, including solvency issues. To fund such a bloated program, some estimates conclude, the average worker in the U.S. could be stuck with a massive $2,300 payroll tax increase. With so many Americans struggling right now, the last thing we need is higher taxes.

Another study illustrates just how devastating a public option would be on local health care efforts, particularly in states that have become hotspots for the pandemic like Arizona. Nationally, the study found that hospitals are expected to lose more than $49 billion this year. However, under a public option scenario, things would be much worse as those losses could exceed more than $79 billion. These losses could undermine the ability of local health care providers to meet the needs in their communities and weaken access to care for patients.

The right way to address the health care needs of Arizonans and all Americans is through market-based solutions that ensure all parties—including providers, insurers, and government programs—are working together to find efficiencies and improvements that will bring down costs while expanding access for more Americans. We don’t need the government controlling our health care system to do that.

Oppose the APS Rate Hike

Oppose the APS Rate Hike

MFA has filed on the docket for the APS rate case.

Remember when APS cared about it’s customers? So do we. Sadly that isn’t the case anymore.

APS was focused on keeping prices lower while providing service and a grid that was beneficial to all. Sadly, the new leadership team has gone on a very different path, fully embracing the Tom Steyer/Bernie Sanders agenda.  Oddly, they now want to California our Arizona with crazy gimmicks, that are sure to cost the ratepayers even more money.

Disturbingly it appears that APS is colluding with Tom Steyer to implement a “Green New Deal.” APS has rolled out a near carbon copy of the Steyer agenda and adopted it as their own which will lead to significant rate increases.  We strongly urge you, through your authority, to seek any and all documents and communiques between APS and their agents and Tom Steyer and his agents. While we realize you can’t compel Mr. Steyer, you most certainly can compel APS.

This possible collusion must be uncovered.

Second, the rate increase proposed by APS must be rejected. SRP, a company that provides nearly the same service, does so at nearly 20% lower the consumer cost as APS. Put another way the Arizona Corporation Commission is picking winners and losers by creating a hidden energy tax on millions of Arizonans whose only crime is to live in the service territory of a monopoly that cares not a wit about their customers.

Third, APS’ return on equity must come in line with our new economic realities. As you know APS’ ROE was set at 10% by the Commission. As you also know, APS illegally made over $28.4 million dollars by exceeding the 10% ROE. For the large part ROE is determined by the profitability of a given company. The authorized 10% and the illegally gotten 10.45% were obtained during times of fantastic economic growth.

Sadly, due to the global pandemic we are seeing a real financial contraction. No monopoly should be given carte blanche profitability levels while the rest of the economy and the people of Arizona suffer.

We do find with great interest the proposal from Commissioner Dunn on performance based rate design that puts customers first, and urge you to give it serious consideration. Coupled with our new economic reality, and the fact that APS illegally obtained over $28.4 million dollars we would urge you to set the ROE at a baseline of no higher than 7.5% and then institute performance based rates which would allow APS to move their ROE to no higher than 8.5% for a period of 3 years.

Lastly, we would urge you to protect ratepayers. During the previous legislative session Market Freedom Alliance, the Goldwater Institute and the Free Enterprise Club worked to establish a Ratepayer Bill of Rights. Unsurprisingly, APS and their legion of lobbyists and lawyers, went to work to kill this important legislation. As a regulated monopoly APS should be allowed a reasonable profit margin without the need to trick customers into bad rate plans.  While APS apparently opposes their customers having basic rights, we believe it completely unconscionable that they were given $5 million dollars to educate their customers about the true nature of their rates, and then fail so miserably at it.  Since this plan was an abject failure, we urge you to reclaim the $5 million dollars and give it back to customers as a rebate.

The Dangers of Cronyism

The United States economy suffers from corporatism and cronyism, which occurs when businesses collude with government to obtain special benefits. The Occupy Wall Street movement has decried this rampant cronyism, but what is the best solution? Professor Jason Brennan contends that while it may seem like the solution is to allow government more power to control and police the economy, this “solution” may actually be causing the problem.

He argues that giving government the power to control and regulate the economy benefits the rich and well connected for two reasons:

  1. The power to “regulate the economy” is really the same thing as the power to distribute favors. For example, many of the regulations we have today were influenced by and sometimes even partially written by one or more of the corporations.
  2. Regulations actually hurt small businesses more than big businesses. It costs a lot of time and money to comply with regulations, making it difficult for small businesses to enter heavily regulated markets.

According to Brennan, less government power means corporations have less power to compete for, fewer privileges to seek, fewer subsidies to enjoy, and no agencies to capture.