In a Harsh New Hampshire Winter, Passage of Education Savings Accounts Is a Breath of Spring

As New Hampshire hunkers down for another brutal January, lawmakers are giving families something to look forward to once the snow melts: namely, more opportunities.

The state House of Representatives on Jan. 3 voted in favor of an education savings account proposal, which would give families and students more options for where and how a child learns. The proposal has already cleared the state Senate.

With an account, the state deposits a portion of a child’s funds from the state education funding formula into a private account that parents can use to buy educational products and services for their children. Lawmakers in Arizona, Florida, Mississippi, Tennessee, Nevada, and North Carolina have enacted similar laws.

These accounts allow families to hire a personal tutor for their student, find educational therapies for children with special needs, or pay private-school tuition, to name a few possible uses.

Students cannot use an account and attend a traditional public or charter school full-time, though they can purchase public school services, including public school classes in some states. Some account laws allow families to save unused funds from year to year and prepare for college expenses.

New Hampshire already allows students from families with incomes at or below 300 percent of the poverty line (approximately $72,000 for a family of four) to apply for private school scholarships, but the accounts would provide students with more options than just a private school. Parents can customize their child’s education with multiple learning services at the same time.

Families in Arizona are using accounts to hire a tutor and pay for education therapists. Some Florida families are buying textbooks and other curricular materials to educate their children at home. More than 12,500 students are using the accounts across the country.

Under the New Hampshire proposal, and similar to laws enacted in other states, 95 percent of an eligible child’s funds from the state formula would be available to students in an education savings account (approximately $3,600).

Changes to the bill in December made children with special needs and low-income students eligible to apply, along with students who were denied a private-school scholarship or charter school enrollment due to space limitations.

But district school supporters have criticized the proposal, claiming the accounts will put children with special needs at a “disadvantage relative to their peers” and take money from public schools.

Yet research from other states with account laws finds high levels of parent satisfaction among families of children with special needs. In fact, two surveys of Arizona families using the accounts find consistently positive results.

 

(Photo: The Heritage Foundation.)

Furthermore, the legislature appears to be ready to give school districts additional money (called “stabilization grants”) when students choose an education savings account. This gives the opposition less to grouse about, and those opposing more educational opportunity should explain to taxpayers why they should fund empty seats in public schools.

Andrew Cline, interim president of the Josiah Bartlett Center, explains that “[e]ven using opponents’ most dire prediction, in which 5 percent of New Hampshire students take advantage of [education savings accounts] to pursue educational opportunities outside of their assigned district, districts hold on to more than 98 percent of their funding.”

New Hampshire taxpayers and policymakers should look to states that already have education savings account laws to find ways to reduce the taxpayers’ burden. For example, according to Arizona legislative analysts, the state’s account laws save taxpayers $1,400 for each child with special needs whose parents choose an account.

Opponents to education savings accounts are trying to prevent children and families from having more opportunities in education—adding bitter political winds to an already snowy New England winter. Instead, lawmakers should continue to push for ways to give more children the chance to succeed.

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Trump Rule Aims to Extend Health Care Option to 11 Million Uninsured

Small businesses and sole proprietors will be able to band together under a new federal rule to create employee health plans that would expand coverage options for 11 million uninsured Americans, senior Trump administration officials said.

The Labor Department rule allowing “association health plans,” placed Thursday in the Federal Register, builds on an executive order by President Donald Trump from October.

One senior Trump administration official said during a background briefing Wednesday that the association health plans will “level the playing field” between small businesses and large corporations and provide “more health care for more people at a lower cost.”

Currently, 8 million Americans employed by small businesses and another 3 million sole proprietors, who do business without employees, don’t have access to a group health insurance plan.

Entry on the Federal Register opens a 60-day public comment period, and the rule could be implemented as early as summer, officials said.

“The main objective of this effort is to expand choices for people who do not yet have insurance and [create] more options for employers and employees to take advantage of,” Robert Moffit, a senior fellow in health policy studies at The Heritage Foundation and a former assistant secretary at the Department of Health and Human Services, told The Daily Signal.

In theory, individual small businesses without many employees could band together—in some cases across state lines—to create a health insurance plan covering a combined, large pool of employees, not unlike that of a health plan run by a big company with its own large pool of employees.

Such association members must have a “commonality,” which could be based on region or industry, senior administration officials said on background.

For example, companies in a specific state could band together for a plan. Already, industry groups such as the National Association of Restaurants and the National Homebuilders Association have expressed support for the concept.

However, Moffit contends this is not alone a reason to oppose the plans.

“That’s a matter of how they are governed,” Moffit said. “Medicaid is prone to fraud. Nobody is saying we should ban Medicaid. If that’s a reason for opposition, you could apply such a rationale across the board to welfare programs and food stamps.”

While association plans are targeted for small businesses, a larger corporation could join one. However, these companies already have existing plans, so there would be less incentive to do so, the senior administration officials said.

Conceptually, the association health plans would be comparable to certain union-sponsored plans, such as that of the United Brotherhood of Carpenters, in which an individual entrepreneur may buy into a larger health insurance plan, officials said.

Administration officials who briefed state leaders on the idea described them as “cautious but not antagonistic” and “intrigued.”

States will be free to regulate to ensure the solvency of the plans.

America’s Health Insurance Plans, the health insurance lobby, has warned that such plans could be prone to fraud without state oversight.

“For example, between 2000 and 2002, insurance scams through associations left more than 200,000 policyholders with unpaid medical bills totaling $252 million,” a research brief from the organization says.

Participating companies will be required to have a role in governing the health plans, senior administration officials said.

Another potential point for opponents is that fewer people who are uninsured will turn to the existing insurance exchanges created under the Affordable Care Act, better known as Obamacare.

This could drive up the cost of the exchange plans, because they would have fewer participants. But Trump administration officials contend their plan will increase consumer options.

The rule will go into place administratively under an existing law, the Employee Retirement Income Security Act of 1974, known as ERISA.

When signing the executive order Oct. 12, Trump predicted:

Insurance companies will be fighting to get every single person signed up, and you will be hopefully negotiating, negotiating, negotiating, and you’ll get such low prices for such great care.

Trump’s executive order primarily does three things:

—Allows more small businesses to form associations to buy insurance plans, with the goal of creating more competition and expanding options across state lines.

—Reviews establishment of “short-term limited duration insurance,” which would not be subject to Obamacare’s expensive and comprehensive coverage regulations.

—Makes it easier for businesses to offer health reimbursement accounts, allowing more employees of small businesses to get coverage through work.

Sen. Rand Paul, R-Ky., who had opposed other administration-backed health care plans, said at the signing ceremony that the Trump executive order was “the biggest free-market reform of health care in a generation.”

Paul added that the reform, “if it works and goes as planned, will allow millions of people to get insurance across state lines at an inexpensive price.”

This report has been updated to include Moffit’s comments.

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GOP Lawmakers Target Another Obamacare Mandate in States

Republicans in Congress are working to chip away at programs mandated under Obamacare following their inability to repeal the health care law.

Rep. Mark Meadows, R-N.C., and Sen. Ron Johnson, R-Wis., introduced a bill Tuesday to end what they called Obamacare’s “failing” plans that competed with private health insurers in the states.

“Multistate plans were a poorly conceived provision of an even more poorly conceived bill, Obamacare, and repealing these plans would be a good step toward getting our health care system back on track,” Meadows said in a written statement.

The plans create two national health insurance plans facilitated by the Office of Personnel Management to compete with insurance plans in each state, and are required in all 50 states.

“This mandate is the definition of government waste,” Johnson said in a prepared statement. “The program has failed to meet statutory requirements and is diverting necessary resources from what should be the OPM’s priorities, such as retirement and security backlogs. Congress needs to let the OPM focus on its job, eliminate this failed program, and work to ensure health care is more affordable for all Americans.”

Arkansas will be the only state to offer multistate plans in 2018, and Meadows, chairman of the conservative House Freedom Caucus, says the health care market would be better served without government interference.

Robert Moffit, an assistant director at OPM under President Ronald Reagan who is now a senior fellow for health policy studies at The Heritage Foundation, said that the fact Arkansas is the only state to offer the plan is telling:

It failed not only in terms of the metrics, in terms of generating insurer participation or coverage numbers, it failed to achieve its fundamental goal, which was to enhance competition in the health insurance exchanges. And the fact that it’s supposed to be in all 50 states and now only exists in Arkansas is a testimony to … the gravity of the monumental nature of this failure in public policy.

Meadows said government should not be part of the health care business.

“The OPM should not be in the business of contracting health insurance plans,” the North Carolina Republican said. “I’m grateful to work with Senator Johnson on this bill as we seek to restore common sense, market-based principles to our health care industry that will bring premiums and overall costs down and help make quality care affordable for all Americans.”

Democrats in the House and Senate passed Obamacare, formally known as the Affordable Care Act, without a single Republican vote in 2010, the second year of Barack Obama’s eight-year presidency.

Republicans have sought to repeal Obamacare on 70 occasions, and the House has voted over 50 times to repeal the law.

In a July 28 Senate vote, three Republicans—Lisa Murkowski of Alaska, Susan Collins of Maine, and John McCain of Arizona—blocked what lawmakers dubbed the “skinny repeal” of Obamacare.

Government has failed in its attempts to be a health insurance provider, Moffit said.

“The federal government has no business sponsoring health insurance plans to compete against other private sector plans in any case,”  he said.

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Student Debt Is a Symptom of Our Broken Education System. This Bill Would Spark a Change.

We are facing an education crisis in this country.

While the value of continued education after high school is undeniable, our nation’s singular focus remains on the necessity of traditional four-year degrees, which come at a soaring cost to students and their families.

For many students, a classic bachelor’s degree earned at a brick-and-ivy university is a worthwhile investment that provides the necessary knowledge to succeed in their given field post-graduation. But that is certainly not the case for all students.

Estimates suggest that a quarter to nearly half of college graduates are underemployed, and often work in jobs that do not require a college degree. And college tuition does not come cheap—the amount of student loan debt held by the American people is now higher than credit card debt.

There has to be a better way to give our students the opportunities they deserve while helping drive down the astronomical educational costs that are burdening working-class families.

I recently introduced the Higher Education Reform and Opportunity (HERO) Act, a bill that would foster innovative solutions to the process of higher education accreditation and would essentially put choice and affordability back into the hands of students.

Our country’s burgeoning student loan debt has been driven, in part, by the accrediting agencies that accredit higher education bodies and decide who is worthy of government funding by way of student loans.

The regional accreditation bodies, the universities, and the Department of Education essentially act as a cartel that controls who can enter the system. This impede the innovation that is needed to tackle high costs, lack of school choice, and the decline of value in four-year degrees.

The HERO Act aims to break up that cartel, opening up higher education to more Americans by empowering individual states to develop their own systems of accrediting educational programs. All accredited programs would then be eligible to receive federal student loan money.

The HERO Act would enable our post-secondary education system to become as diverse and nimble as the industries that are looking to hire.

States would be able to accredit non-traditional education options, such as single courses or vocational programs, to meet the particular needs of their local economy. Students would be able to use federal loan money to put toward single learning courses, online opportunities, and apprenticeships in skilled trades.

Freeing up states to decide how they wish to accredit education options would spark a new era of competition. Trade schools and non-traditional organizations could directly compete for funding, making their appeals to students who have a variety of interests and seek a return on their investment.

Florida could decide to accredit specialized mechanics apprenticeship programs to cater to our robust flight industry, while California might empower Silicon Valley companies to teach coding programs to students who do not necessarily need a four-year degree.

Not only would the HERO Act allow states to fulfill the educational needs they have identified, but it would give students far greater flexibility to tailor their education to their needs. With the fast pace of innovation and an ever-changing economy, workers can often find themselves in need of educational programming mid-career.

Under the reforms proposed by the HERO Act, students could take shorter courses catered to their specific educational needs rather than leave the workforce completely to go back to school.

It is important to note that this bill would not alter current federal accreditation systems. Federal agencies would, however, have to recognize that individual states are on equal footing to know where the current system is failing, and to accredit programs that will fill this void.

Greater competition would force colleges and universities to reassess their federally subsidized pricing practices and help break the cycle of government subsidies that contributes to rising tuition rates. Some students may no longer choose time-consuming and costly four-year degrees if another educational opportunity at a lower cost could impart the necessary knowledge and skills.

Additionally, the HERO Act would require institutions to publish information regarding student success, to prove that they are fiscally accountable, and to ensure schools are held accountable for student loan defaults.

The HERO Act would expand higher education opportunities to millions of Americans who are underserved by our current system. We cannot allow the iron triangle that currently controls accreditation to stifle innovation and shut out potential students from accessing higher education in a manner that works for them.

Simply put, receiving a four-year degree is not the only means of achieving career success, and our federal education policy should reflect that truth.

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