Texas Insurance Rates

Texas has ended up in the top 10 states again. In this case, the news is not good.

The Texas Office of Public Insurance Counsel (OPIC) reports that Texas has the third highest insurance rates in the nation. In fact, the OPIC compares the average rates paid by a homes valued between $175,000 and $200,000. Texan’s paid an average of $1,440. That’s 76% higher than the national average.

The OPIC has a number of suspects in these high costs. Their analysis concludes (and emphasizes): “While catastrophe losses explain why premiums are high relative to other states, evidence suggests they are not the primary driver of recent premium increases.”

They ascribe some of the problem to “inefficient markets” and suggest that consumers spend more time shopping for different policies. That begs the question why the Texas market is more inefficient than those in other states and why company expenses, sales commissions, and company profits are higher in Texas than other states. OPIC is in a position to report these sources of higher premiums, but it is not in a position to regulate them.

The bottom line (for the moment) is that state regulation is not going to bring down rates. If Texans want chapter insure it’s up to consumers to shop around. OPIC suggests using tools online at www.opic.state.tx.us or at helpinsure.com.

 

Texas Dental Board

The Texas Tribune had a story (“Texas Dental Board is Accused of Ineptitude“) that reflect one of the worries behind the bureaucracy in Texas.

The Texas State Board of Dental Examiners is composed of 15 member appointed to six-year terms by the governor: 8 dentists,  2 dental hygienists, and 5 public members. Thus, like most of the commissions that oversee our licensing and regulatory boards, the board is dominated by professionals in the field. Of course, it makes a lot of sense to make sure that the board has some understanding of what they are regulating. However, it also builds in a potential for conflict of interests that will worry citizens.

Here’s the challenge for Texans: Do you want to hand agencies like this entirely to professional bureaucrats, or do you allow citizen-commissioners with potential conflicts of interests?

Making it easier to get benefits

Stateline has an interesting article (“States retool food stamp, benefits systems“) about how Texas and other states are getting rid of fingerprinting or similar requirements for getting benefits like “food stamps” (SNAP is the new name for the food program in Texas). It turned out that the new security features were costing more to implement than they realized in savings.

By the way, if you’re curious about what kind of benefits are provided by the state or it takes to get these benefits you can check out the state’s website: Your Texas Benefits.

The lack of accountability for accountability standards

The latest school accountability ratings are out and few people can make much sense of them. A story in the  Corpus Christi Caller Times  (“Complex accountability system frustrates educators, confuses parents“) provided several examples of parent who found the state’s rating system useless and instead took the revolutionary action of actually talking to teachers and principals.

The Victoria Advocate (“Move over TAKS, state has new STAAR test“) reminds us that Texas will have brand new standards. The STAAR (State of Texas Assessments of Academic Readiness) test will appear this school year and give Texans an entirely new foundation for  judging schools. The STAAR tests are designed to encourage a deeper understanding of the material.

A story in the Texas Tribune (“With Change in Formula, Texas School Ratings Drop“) takes a look at the recently released state-wide school ratings. They noticed that dropping the “Texas Projection Measure” produced a dramatic shift.

Texas Education Commissioner Robert Scott tried to assure Texans that these latest results were “absolutely real and valid.” You have to wonder what kind of dramatic variations in results would lead Scott to question the validity of these scores. If shifts this big do not lead Scott to ask serious questions, nothing will.

Clearly, the leadership in the state will continue to deny even the most obvious signs of a problem. This is the risk of having one regime in power too long. It can not afford to admit its mistakes.

As I noted at this time last year, the ratings had become so inflated that they held no credibility and the Texas Legislature voted unanimously to make the Texas Education Agency (TEA) revert to a more realistic measure. The absurdity of this scheme is nicely illustrated by the 200+ pages of the  “Accountability Manual” that the TEA provides.

We have allowed our elected officials to scapegoat the state’s teachers for too long. Standardized tests serve as a shell game that political forces use to constantly shift blame away from themselves. In the process, Texas public school students suffer. I have never heard a college faculty member or employer say that students today are better prepared for college or the workforce. At best, Texas public school students have simply been better programmed for the useless task of taking standardized tests. At worst, they have lost the creativity and critical thinking skills they need to succeed.

The state’s political leaders have an incentive to perpetuate these phony scores. Some teachers may be struggling in the classroom and local school boards my be struggling to put together a quality education for every student. However, it seems clear that they are doing a better job than the state’s education bureaucracy.

State Employee Benefits in Texas

Those of you who work for state universities in Texas should take a look at a story in the Texas Tribune (“Benefits and Drawbacks“) about the shortfall in the system and the changes they will spawn. It looks like the  Employee Retirement System will have a $140.4 million shortfall next year and another $880 million over the two following years. That’s on top of $476 million needed to replenish a contingency fund.

Not good.

Remember: Many state legislators think professors and bureaucrats are already pampered. They’re not going to make protecting our benefits a high priority. Health care is not going to be an issue that anyone is anxious to talk about. State employees can expect some significant and enduring increases in health care costs.

A little more amateur government

Abby Rapoport at the the Texas Tribune has a story that illustrates some of the problems with having part-time amateurs running state agencies. In “No Experience Necessary,” Rapoport describes some of the controversies surrounding the State Board of Education‘s management of the Permanent School Fund.

The State Board of Education (SBOE) has been facing criticism as some members have rejected the recommendation of staff and experts in putting together curriculum for public school students. In this case the Board is facing scrutiny for putting aside advice from staff in its handling of the Permanent School Fund (PSF). The PSF’s origins go back to 1854 when the new state of Texas set aside $2 million of the $10 million it received from the US for giving up claims to some of the land it had claimed as the Republic of Texas.  The Constitution of 1876 revived the fund and granted the proceeds of the sale of certain public lands to fund.  Since that time monies from the sales and leasing of these public lands have gone into the PSF with the returns on the investment of the funds being made available for use in Texas public schools. The PSF was valued at about $22.6 billion dollars at the end of fiscal 2009.

Tasking the SBOE with management of these funds puts Board members in a challenging position. Of course, the SBOE doesn’t try to directly manage every detail of the fund itself. The Board works with consultants and the staff of the Texas Education Agency. Still, the role of the Board is to supervise these investments. This creates two sets of problems:

1. Asking a set of part-time board members to manage the very different areas of high finance and education curriculum. Would you ask your high school’s principal to manage your portfolio? Would you ask your stockbroker to decide how the sciences should be taught?
2. Concerns about possible conflicts of interest you might expect when you’ve got that much money on the table.

There is a good case to made for having amateur boards watch over the professional bureaucracies we have in Texas. However, asking citizens to supervise many different functions effectively undermines the ability to supervise any one function. Sometimes, too much supervision results in no supervision. The safety net seems to be stretched a little too far.

So… What are the limits of amateur bureaucracy? Is it better suited for some areas than others.

Texas Youth Commission’s ombudsman indicted

The Dallas Morning News and Austin American Statesman are reporting that the new head of the Texas Youth Commission‘s ombudsman office was indicted for trying to bring a knife,  cellphone and prescription drugs into a TYC facility. Her defense was that she forgot she had a small knife on a visit during one visit. She has also said that she was testing security at the facilities. Either way, a grand jury felt that it merited an indictment and Governor Perry seemed to be happy to kick her to the curb. It is embarrassing. However, I understand why Perry’s staff wouldn’t think to include questions about contraband in the standard set of questions they asked in September before she was appointed.

In the meantime, the Texas Youth Commission gets another black eye.

Perry’s staff and agency appointments

The Austin-American Statesman has an interesting story about how frequently Rick Perry turns to his staff when making key appointments to head important agencies. According to the story, this helps Perry establish a stronger degree of control over the state bureaucracy.

Governor Rick Perry

It is interesting that Perry turns to his staff so more than George W. Bush and Ann Richards. A couple of sources in the article argue that Perry could find people who were equally loyal by looking beyond his staff. This may be true. However, someone who had worked with Perry should know his philosophy/style/politics better than anyone else. It would also help create a communication network between Perry’s gubernatorial staff and executive agencies.

Unlike Perry’s highly questionable use of at least one regulatory chief as a fundraiser, there’s nothing necessarily improper about this. It is reasonable for Perry to develop communication and control across the state bureaucracy. While this influence could be abused, any form of power could be. As chief executive, Perry has every right to influence the executive branch. The over-use of staff does raise to possibility that these appointments might be personal rewards, it’s better to reward competent staffers than large donors.

Shaking down restaurant owners

The Dallas Morning News is reporting that head of the Texas Alcoholic Beverage Commission has been soliciting campaign contributions for Perry’s re-election campaign from the owners of the bars and restaurants that TABC regulates. José Cuevas, a Perry appointee, has written a letter asking for large donations ($1,000- $5,000) for a fund-raising event for Perry’s campaign.

Apparently, this violates no law. In Texas the head of a regulatory agency can solicit campaign contributions from individuals whose fate they control.

As I’ve noted before, Texas is very uneven in how it regulates conflict of interest. I am forbidden to make a contribution to a State Board of Education campaign because I’ve written a textbook while Cuevas can solicit funds from the people he regulates?

The Perry defense is: “In this case, you have a letter from someone who is a longtime restaurant owner who is soliciting money from people in the same business.” This only reveals the degree to which we’ve allowed conflict of interest to become institutionalized. To paraphrase: “Of course, he soliciting money from people he does business with–that’s who we put him in charge of.”

Perry spokesman Mark Miner said that he has absolutely no reservations about the solicitation. When asked about state regulators soliciting those they regulate he declined to comment on “hypotheticals.”

That’s not a hypothetical–it is principle. You either have principles or you don’t.

We usually only see restaurant owners being shaken down on television crime dramas.  It’s wrong. Texas has a serious problem if Perry can’t see this. Let’s hope that this blind spot is limited to one campaign person.

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Update: According to the Midland Reporter-Telegram, Rick Perry doesn’t “have a problem in the world” with his appointee soliciting restaurants for donations. That’s too bad. Texas government needs a higher standard of ethics. Apparently, ethics cramps his campaign’s style.

I wish Cuevas would change his ways. Anybody who would run a place call “JumBurrito” is generally okay with me.

Medicaid fraud in Texas

The Fort Worth Star-Telegram has a story outlining Medicaid fraud in Texas. An investigation [summary | full report in pdf ] by the Government Accountability Office found dead doctors writing prescriptions and dead patients receiving medication. Much of the fraud supported prescription drug abuse.

People often forget that Medicaid and many similar programs are administered through state governments. The Texas Health and Human Services Commission is blamed in this case for not providing adequate supervision despite the fact that the Legislature has given the commission’s inspectors general office additional funds for investigators. The story is a good illustration of how the state governments shares responsibility  with the national government in  modern federalism.