Utah is not the only Western state that is rejecting the left’s global warming regulation policies. This week Arizona Gov. Jan Brewer (R) signed an executive order stating that Arizona will not endorse any emission-control plan that could raise costs for consumers and businesses. The Arizona Republic reports:
Arizona will no longer participate in a groundbreaking attempt to limit greenhouse-gas emissions across the West, a change in policy by Gov. Jan Brewer that will include a review of all the state’s efforts to combat climate change.
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State officials said the policy shift was rooted in concerns that the controversial emissions plan would slow the state’s economic recovery.
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The governor’s order is another blow to the Western Climate Initiative, a group of seven states and four Canadian provinces that joined forces in 2007 after growing impatient with the federal government to address climate change.
The economic costs of cap and trade for the nation as a whole are bad enough. A study by The Heritage Foundation’s Center for Data Analysis found that a national cap and trade program would make the United States about $9.4 trillion poorer by 2035. Much of this decline would be from reduced economic productivity and job loss. Under the House legislation there would be 1.15 million fewer jobs on average than without a cap-and-trade bill. And as Heritage fellow Ben Lieberman has testified, Western states would be particularly hard hit:
Coal mining will be very hard-hit, so Montana and Wyoming and other coal-producing states will see this important sector of their economies shrink significantly. Western oil and natural gas producers will face higher costs as well. The promise of oil shale in Colorado, Utah, and Wyoming will never be realized under Waxman-Markey. As I mentioned, agriculture is hard-hit, and that particularly includes things common in parts of the West that are not well positioned to partially defray their costs by availing themselves of offsets, like ranching on federal lands, fruits and vegetables, and potatoes. And of course the long distances rural Westerners have to drive in the course of each day means that gasoline and diesel price increases hurt them more than other Americans.
Extending health care to the uninsured and those who can’t get coverage for pre-existing conditions is the epicenter of Democrats’ health care bills, but achieving that goal requires adding younger, healthier Americans to insurance pools to hold down costs. And achieving coverage for sicker populations comes at a significant price to young Americans, according to a recent report by Rea Hederman and Paul Winfree of Heritage’s Center for Data Analysis.
Two provisions in the bills ensure that those with pre-existing conditions will be able to get coverage at an affordable cost. ”Guaranteed issue” requires that insurance companies provide coverage to anyone, regardless of their medical history, and age rating would entail insurance companies charging older or sick customers no more than twice as much (three times as much in Senate bill) as they charge younger enrollees. This guarantees that premiums for the young will increase to subsidize the cost of covering the older and more sickly population.
Increased premiums would inevitably discourage more youth, not less, from purchasing insurance. In order to counter this effect, the bills include provisions to ensure that younger Americans still join the risk pool: an individual mandate to purchase insurance and subsidies to purchase insurance for low and middle-income singles and families.
But, according to Hederman and Winfree, “Unfortunately, trying to fix one flawed policy (the rating restrictions and guaranteed issue requirements) by adding another flawed policy (the mandate and costly subsidies) only makes the policy outcome even worse.”
CDA’s findings echo predictions from the Congressional Budget Office that premiums in the non-group market will increase as a result of the bills. CDA shows these premiums increasing 10 to 13 percent. Rather than encouraging younger Americans to purchase insurance, this will achieve the opposite, thereby increasing premiums for the older and sicker population who must purchase insurance as younger Americans leave the market.
The individual mandate is intended to force youth into the market, but further CDA analysis shows that this will not occur. Instead, most youth will opt out, largely because of the higher premiums that would result from the guaranteed issue and age rating provisions, but also because the penalty for not purchasing insurance would be significantly lower than premiums.
For those to whom the individual mandate will apply and who are eligible for the health exchange, CDA predicts only 12 percent of single uninsured individuals under 35 will purchase insurance. Only 20 percent of families in the same category would bcome insured, and of the uninsured that don’t qualify for subsidies in the exchange, only 5 percent are expected to buy insurance. Altogether, CDA finds that greater than 93 percent of insured households would sooner pay the penalty and than purchase insurance at higher premiums.
As Hederman and Winfree explain, “this quickly becomes a downward cycle as insurance costs increase, which will drive out more and more of those who are less costly to insure. Insurers will have no choice but to raise premiums, as they face paying out far more in benefits to cover a sicker pool…” Clearly, the consequences of Obamacare are disadvantageous for everyone.