Choice: Solutions for Education and Insurance

Imagine if our food choices only included fish, or meat, or only vegetarian foods. Of course, such a scenario is patently ridiculous. Our society encourages as much variety and choice within food as possible. We have so many varieties listing them here would take many blog posts. In fact, our society encourages variety and choice in almost every area of society. There are two glaring exceptions and in my opinion the lack of choice contributes to part of the problem in both.

In education, our government has in fact done everything it can to limit parent's choice as much as possible. Every innovation in education has been met with resistence and many times the government has even tried to put in roadblocks to choice. The failure of the public school system in most urban areas is no secret. Here in Chicago, we have over 600 public schools, and a handful, Whitney Young, Lake View, Lincoln Park, and a few others, can be considered anything but a total disaster. One of the beacons of hope in the Chicago public school system has been the emergence of charter schools. Charter schools operate outside the system in many ways. Their curriculum is freed from many of the chains that handcuff many traditional public schools. Furthermore, their teachers are not required to be part of the teacher's unions.

These very charter schools have given parents some much needed choice within the confines of the Chicago Public School system. So, what has the State government done to help charter schools flourish?

Legislators had plenty to keep them occupied this spring besides passing legislation. Distractions included primary races in new legislative districts, federal prosecutors who continued to tighten their circle around Gov. George Ryan's office and a budget crisis that grew worse as the session went on.

That didn't leave them much time or energy to deal with controversial issues, and the result was a fairly uneventful legislative session. The Chicago Board of Education got a bill through that limited student choice under the new federal No Child Left Behind law, but proposals to add more charter schools in Chicago and to tweak the Chicago School Reform Act to give teachers a greater leadership role in schools fizzled quietly.

The Chicago Teachers Union made surprising headway with its proposal to undo a section of the 1995 Chicago reform law that blocks the union from negotiating over class size, layoffs and other working conditions. It got Chicago Mayor Richard M. Daley to move from strong opposition to negotiation. Sources say a compromise version might come up for a vote in this fall's veto session.

Many times parents take matters into their own hands, and they home school their kids. So, what has government done to help home schooling flourish?

Parents who lack teaching credentials cannot educate their children at home, according to a state appellate court ruling that is sending waves of fear through California’s home schooling families.Advocates for the families vowed to appeal the decision to the state Supreme Court. Enforcement until then appears unlikely, but if the ruling stands, home-schooling supporters say California will have the most regressive law in the nation.

“This decision is a direct hit against every home schooler in California,” said Brad Dacus, president of the Pacific Justice Institute, which represents the Sunland Christian School, which specializes in religious home schooling. “If the state Supreme Court does not reverse this . . . there will be nothing to prevent home-school witch hunts from being implemented in every corner of the state of California.”

The institute estimates there are as many as 166,000 California students who are home schooled. State Department of Education officials say there is no way to know the true number.Unlike at least 30 other states, home schooling is not specifically addressed in California law. Under the state education code, students must be enrolled in a public or private school, or can be taught at home by a credentialed tutor.

Finally, the third major tool of choice is vouchers. Vouchers allow parents to use credits to opt out of the public school system entirely and send their children to private schools. Yet, for the most part, vouchers have been resisted by politicians over the country.

Choice encourages competition. Competition encourages accountability, and it also eliminates those schools and programs that fail. When the government limits choice by placing undo restrictions on agents of change all it really does is encourage the status quo that has created a handful of public schools in Chicago being anything above a disaster out of over 600.

So, why is the government doing its damndest to discourage competition? The answer unfortunately lies only in nefarious reasons. Most agents of choice also challenge one of the most powerful lobbying groups in education, the teacher's union. Because much of government is more beholded to the teacher's union than to the kids, most of the agents of change that would expand choice within education oppose it. They oppose not because it is bad policy, but because their allegiance lie with the unions rather than good policy.

On health insurance the story is much the same. Much of the exploding costs of health insurance could be resolved if folks were given more choice. Of course, the way that health insurance is structured limits choice. Most people don't know this but health insurance providers enjoy limited immunity from the Sherman Anti Trust. Furthermore, it is illegal for folks of one state to buy health insurance from a provider located in another state. These two relatively unknown statutes combine to create regional monopolies within health insurace. As such Blue Cross/Blue Shield of Texas controls one third of the market in Texas. Since health care providers enjoy limitied immunity and it isn't allowed for folks in Texas to look out of the state for their insurance, BCBS enjoys a near monopoly in that state. In fact, most states face a similar monopolisitic force.

Monopolies drive up prices. They are a corrupting influence and they contribute to a lack of innovation. Yet, that's exactly what we have in health insurance, and once again, we have it because our politicians are beholden more to a special interest (health insurance providers) than they are to good policy. We could expand choice ten fold by simply reversing these two things. If health insurance providers were no longer given limited immunity from Sherman and folks could buy insurance from outside their home state, we would see competition expand ten fold. Competition would drive down costs. It was increase choice, and it would punish corrupt and failing health insurance providers. Because, in part at least, we have no choice in health insurance, here is an example of how Blue Cross/Blue Shield has corrupted the market in Texas..

Choice is such a simple concept. It makes life better in nearly every field and endeavor, and yet our government has gotten behind the concept of status quo in two very important fields, insurance and education, and unfortunately, they have done it because they have been corrupted by special interests looking to line their own pockets rather than make good policy.