Our education system in the U.S. isn’t perfect—it’s got its problems. And yet it is an impressive achievement that we are able to provide a free education to every child. While a few people may grumble about paying taxes, we all share the cost of education, and we’ve gotten used to the idea that every child has a right to go to school. Our economy, living standard, and quality of life are more prosperous because of universal education.
It’s unfortunate we didn’t see the wisdom of providing universal health care in the U.S. as well. Instead, we’ve accepted a system that leaves millions of people without health care, bankrupts families that cannot pay their enormous hospital bills, and denies care to the sickest people. While ObamaCare is bringing welcome reforms, we’re still stuck with health insurance companies acting as expensive, unnecessary middlemen.
How did we come up with such a ridiculous way of providing health care in America? Why are we able to provide a universal education in our country but shy away from a universal health care system? Imagine if we had a similar lapse of judgment when we set up our education system in the United States. Here’s what it might have looked like. – Rachel
About “Education Insurance” and “Educaid”
In the United States the government pays the educational expenses for only the poorest families. The rest of Americans have to pay to educate their kids. But most families do not pay teachers and schools directly. Rather, they pay a middleman. Families purchase what are called “education insurance policies” sold and managed by “education insurance companies.”
The insurance companies issue students a card with a policy identification number. Students go to teachers to get educated and then teachers submit their bills to the education insurance companies, who then pay the teachers. Most schools have billing departments, since the payment process can be a complicated mess of paperwork. Sometimes, there is disagreement as to whether the education service provided was actually needed, and the education companies refuse to pay the teachers.
Education insurance is quite expensive, and most American families cannot afford to pay the premiums on their own. About 60 percent of families work for employers who offer “education benefits”—in such cases, employers split the cost of education insurance with their employees.
Education of the very poorest kids is provided by the government (and funded by taxes) through a program called “Educaid.” Educaid does help children get access to education, but there are some problems. Educaid usually pays teachers less than education insurance companies, so more and more teachers are refusing to teach children on Educaid. As a result, some kids must travel long distances to find schools willing to teach them.
Still, Educaid is better than having no education at all. The unlucky kids whose parents do not get education benefits from their employers, but who earn too much to be on Educaid, fall through the cracks. In such cases, parents often pay out-of-pocket for a couple hours of instruction for their kids when they can afford it. Some families go bankrupt trying to cover school expenses. Other kids get no education at all.
The Fight over Education Reform
For decades, Americans have realized that the education system is broken. It is too expensive, and there are too many kids who cannot afford even a basic education. Over the years, the American people have proposed various education reforms—most of which have failed to pass. Some groups have proposed getting rid of education insurance companies and replacing it with a universal public education system managed by the government and paid for by taxes–making education free and accessible to all children. The reforms have failed because: 1) education insurance companies have a strong political lobby; and 2) lots of people would lose their jobs if we got rid of education insurance companies. About 500,000 people work in the education insurance industry. Add to these all the people employed in school billing offices and you see significant job losses.
Republicans opposed to education reform are also concerned that universal education would make rich people pay too much in taxes resulting in job loss for millions of middle class Americans. Democrats dispute that raising taxes on the rich to pay for universal education would result in job losses—particularly since businesses would no longer have the burden of providing expensive education benefits to their employees.
The Affordable Education Act of 2010 or “ObamEd”
Despite the opposition to education reform, Barack Obama and the Democrats in the House and Senate managed to push through the most significant education reform since Educaid was created in 1965–The Affordable Education Act of 2010, informally known as “ObamEd.”
The Affordable Education Act (AEA) will bring several important benefits: more Americans will get an education; students with special needs will no longer be denied education insurance; and insurance companies will no longer charge higher premiums for students with cognitive or physical disabilities. The cost of education insurance premiums should go down with a new education mandate (see below) and with pure capitalist competition in the education insurance marketplaces (also see below).
However, ObamEd has been a really tough sell, mostly because of misinformation and propaganda spread by groups and politicians trying to derail the AEA. For instance, Americans were incorrectly told that ObamEd would include “education denial panels,” where the government would decide which kids were worth educating. In reality, ObamEd does not institute a system of “denial panels.” Arguably, it gets rid of the “denial panel” created by the education insurance companies. Propaganda groups also warn that ObamaCare is a socialist plan which will, by its very socialist nature, bring down our economy and take away all our liberties.
Education Insurance Exchanges and Educaid Expansion
President Obama and his fellow Democrats insist that ObamEd is rooted in capitalism–so no worries that we are becoming socialists or communists. In fact, one of ObamEd’s core reforms is the creation of “education insurance exchanges”—a purely capitalist marketplace where families and small business can buy education insurance.
The exchanges will be online marketplaces—similar in structure to Orbitz or Travelocity. There will be several education insurance plans available in the exchanges: a bronze, silver, gold, and platinum plan. The plans differ in the costs of their premiums and copays. For example, in the cheapest plan, which is bronze, insurance premiums are lowest but families pay 40% copays to teachers. In the platinum plans, monthly premiums are highest, but families only pay 10% copays.
The AEA will provide help to low- and middle-income families. Educaid will be expanded in most states to cover families bringing in 138% or less of the federal poverty line (FPL). And Families earning between 138% and 400% ($92,400 for a family of 4) of the FPL can get an education tax credit to help them afford insurance in the education insurance exchanges.
Education Insurance Mandates
Perhaps the most controversial aspect of the AEA is the mandate for all Americans to buy education insurance. If families refuse to buy education insurance, they will have to pay tax penalties (and still not get an education for their kids).
Advocates of the AEA say that mandates will make education insurance more affordable for everyone because it will increase the number of people paying into the system, and provide education for more kids. But, even many liberals are uncomfortable with the mandates. It hardly seems fair or progressive for the government to abandon kids who have modest incomes, and then slap their parents with an ultimatum: buy education insurance you cannot afford, or pay a penalty you cannot afford.
Education Insurance and ObamEd are Ridiculous, Inefficient, and Unfair
Thank goodness this was all just fiction. My own kids attend New York City public schools. In reality, the United States provides a universal public education through a single-payer system—meaning it’s paid for by the government with money collected through taxes. While it’s not perfect, it sure beats an “Education Insurance system” and an “ObamEd” fix.
But wait! Health insurance and ObamaCare are real! Why are we putting up with it?
Why not go for a Single-Payer, Universal Health Care System instead?
The United States is the only developed country that does not have a universal, nationalized health care system–and we suffer as a result. Americans pay an average of 2 ½ times more on health care than other developed countries, yet our health isn’t so great. The U.S. has the lowest life expectancy and highest infant mortality rate among developed countries. We also have fewer doctors per person than most developed countries.
Have you ever asked a European or Canadian what they think about their national health care systems? I have, and have gotten fairly favorable responses—with a few minor grumblings. Do you know that in Britain’s National Health Service (NHS), doctors make house calls—for free!
Britain’s NHS has also accomplished the miracle of keeping Stephen Hawking alive despite his struggle with Lou Gehrig’s disease—and without bankrupting him! In response to a statement in the American press claiming that the NHS in Britain would have killed him (not realizing that Hawking is a British citizen who gets his medical treatment in England), Stephen Hawking said, “I have received excellent medical attention in Britain, and I felt it was important to set the record straight. I believe in universal health care. And I am not afraid to say so (NYT, May 9, 2011).” I also believe in universal health care, and wish we had it here in the U.S. too. — Rachel