fedgazette

Letters to the Editor

Reader opinion on fedgazette articles.

Published July 1, 2002  |  July 2002 issue

Re: Health Care Costs (May)

To The Editor:
"Health Care Costs" in the May issue of fedgazette found the theories of economics and a free economy just don't apply to health care. Try as you might to defend these theories as they relate to health care, you couldn't.

I've been a business owner since 1965 (truck equipment and school bus distributor with up to 12 employees). I've always provided health care for my employees. I've defended the system and fought unwaveringly over the years against increased government intervention in the system.

I can no longer do so. In the last six years I've been involved in a second business, an aerial lift manufacturer with 48 employees. Between the two businesses, health care costs and the inequities of underwriting the plans have made it impossible for me to be a fair and reasonable employer. Both companies have individual ratings applied to each employee; costs vary from $200 per month to as high as $1,100 per month for a family. Seniors (employees on Social Security) still working at the manufacturing company with more than 20 employees have a rate in excess of $600 per month; seniors at the other with fewer than 20 employees have a rate less than $200 per month. (Medicare is secondary at the one and primary at the other.) With these disparities how can one NOT look at employees differently depending upon health care cost?

A year ago last fall Jere Glover, then the chief counsel for advocacy at the Small Business Administration, came to Duluth as my guest speaker at Skyline Rotary. During that visit I expressed my frustration with health care issues. I told him I wanted the government to take the whole system over, get it off my back as a businessperson. He indicated that Medicare had a delivery cost of approximately 4 percent, and even if another 4 percent were factored in for fraud, the system delivers 92 percent direct benefits. No other system is making this type of efficient return. Further, he stated that if Medicare eligibility were lowered to age 50, the SBA had data that showed that the private system would cost as much as 60 percent less because those who use the system increase in frequency and severity at age 50 or older.

The Federal Reserve has been a champion of free markets. Businesses in the United States cannot be competitive in the world economy you espouse strapped with health care costs that businesses in other countries don't have to absorb. All the other developed countries of the world have made health care their government's responsibility. It is about time we face the fact our system is too costly, does not work, and that it should be completely overhauled with the goal of taking "businesses and employers" out of the health care business.

Kelvin R. (Kelly) Herstad
President/Treasurer, United Truck Body Co. Inc.
and Board Chair, NorStar Products International Inc.
Duluth, Minn.

Re: High-Speed Rail (March)

To the Editor:
Because of my professional affiliations I follow details of the Midwest Regional Rail Initiative (MWRRI) more closely than your average reader, who may rely on articles in the fedgazette for a major source of their opinion formulation.

The fedgazette article states that MWRRI projected one-way fare, Twin Cities—Madison, Wis., 260 miles, is $83 business/ $53 "nonbusiness," and that an automobile trip would be "considerably less expensive." Fact: The Internal Revenue Service allows 36.5 cents/mile for auto expenses, or $94.90 to operate an auto that distance.

Implied in the fedgazette: Since trains, or planes, are not "door-to-door" there is an added public transportation cost vs. private auto. Fact: Parking costs in big cities are high. A taxi or transit bus for local transportation coordinated with intercity rail eliminates auto parking fees.

According to the fedgazette, "The $40-$60 fare quoted for the 85-mile Milwaukee-Madison trip is five times higher than the auto cost." Fact: The IRS cost is $31.05. "Five times higher."

The fedgazette says, "The FRA study predicted that high speed rail would divert a significantly higher percentage of intercity air traffic ... but given the limited destinations sprouting from any single high-speed rail hub (in the case of the Twin Cities that would be just one-Chicago). ... The broader impact on airport congestion would be negligible." Fact: Don't La Crosse, Madison and Milwaukee count as destinations? Added to the cities between the Twin Cities and Chicago, the additional cities that would be reachable by convenient rail, such as St. Louis and Detroit, and intermediate points, it is a significant number of destinations that could be accessed alternatively by a mode other than air out of the Twin Cities.

According to the fedgazette, "For the most part the money that goes in to intercity highways comes from the user tax or user fees." Fact: Most people don't live on a federal/state system road that receives user fee support. The most important road we use every day, the road in front of our house, is not user supported, but rather subsidized.

The story also says, "All of the spending on airports in this country, for 30 years, has been through the user fees that are included in the price of a plane ticket." Fact: The Aviation Trust Fund was established in 1971. With the exception of the new Denver and Dallas airports, built since 1971, all the major U.S. airports, including O'Hare and Minneapolis/St. Paul, were already essentially built and in place before 1971. Major improvements had been made since then to all airports, but the major site acquisition, design and construction was done with general funds. The Trust Fund didn't start off in the early '70s fully funded, so general funds were used well into the 1970s before user fees began to build up significantly. Now, approximately 85 percent of major project funding is from the Trust Fund, but the 15 percent "local" funding comes from other sources, including general tax fund subsidies. Remember, operational functions that serve the national air transport system, such as the National Weather Service and Federal Aviation Administration air controllers, are paid for by general taxes.

And finally, the fedgazette says, "This is 19th century technology—we should never forget that." Fact: When was the automobile invented? Answer: in the 19th century. When was the airplane invented? Well, 1903, but I rest my case.

Transportation planning and modal allocation comes down to choice, convenience, practicality and safety. As baby boomers age into their 50s, night vision is not as sharp, the back aches when made to sit immobile in a car seat for too long and point-to-point drives, with no intended side trips, begin not to be as exciting as when you're younger. A choice becomes a safety and health necessity. There are real people of importance who do not own cars, or drive! There are people in their older years who should not be driving; there are cities where real people live that have no commercial air service.

Robert G. Fisher, AICP
La Crosse, Wis
.

Editor's note: In his letter Mr. Fisher does not distinguish between statements by the fedgazette writer and quoted sources. Read the article in the March fedgazette.

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