My gas bill and how it affects you.

I got my utility bill in the mail today. It’s not the most I’ve ever paid for a month of utilities (I think last month might be the record) but it’s still higher than what I’ve paid on average over the last few years that I’ve lived in Provo.

You might be wondering why I’m writing about something as boring as my utility bill.

But recent events have me rethinking a lot of things. You see in the apartment complex where I live every resident gets a utility bill. I like this because I don’t have to put a utility in my name and then hound my roommates for money each month, and then be left footing the bill if they decide not to pay as is the case with many student apartments. It’s one less thing that I have to worry about. (And for the record, I don’t think any of my roommates past or present would ever leave me hanging with a bill, but it’s still easier this way.)

If any of you are like me you’ve probably resolved, after seeing the amount of your bill, to use less, be it turning off the lights, turning down the thermostat, or taking shorter showers. Not only will these things save you money, but reducing the amount of energy that we use is a good thing. For six months I’ve been living in this apartment, and trying to save money I have been very vigilant to turn off the lights and to keep the thermostat at an appropriate temperature. I thought I was doing the responsible thing by saving me and my roommates money, but I never really saw my bill go down. In fact it seemed to go up, even in December when the apartment was practically empty for half of the month. It’s never been something I can’t afford. It’s not unreasonably high plus I’ve worked hard and saved money to pay for expenses like this while I’m going to school.

I found out about a month ago that the gas portion of our utility bill (the most expensive part) isn’t billed to us based on how much we use, but the gas bill for the entire complex is split evenly between the tenants. So let’s suppose for a minute that my energy saving efforts eliminate about $5 worth of gas usage in a month. There are over 1000 residents in my complex, and again supposing that their utilities usages remain the same, that $5 that my efforts saved divided among those 1000 tenants ends up being $0.005 or one half of one cent. Among my neighbors there has to be others like me who are trying to use less, but my experience tells me that there are a lot more people in student housing that don’t think twice about what utilities cost them each month. Either because it doesn’t occur to them that having a window open and the furnace on is like throwing money out the window or because mom and dad take care of the bills.

So I started thinking, is it really worth it for me to focus so much of my attention on using less energy just to save myself half of a penny when so many others don’t seem to care. Being a responsible user really isn’t benefitting me so why should I even try. I could focus my attention on much more (or less) important things and at the end of the month the amount that I write a check for will depend on how much everyone else used. But over time that attitude will result in higher bills for everybody. Each cubic foot of gas costs money and whether each person pays for exactly what they use or if your bill is subsidized by the prudence of others that money comes out of someone’s pocket.

It would be nice if everyone decided to conserve energy because it was good for the environment, but in reality people are and only when their utility bills are ridiculously large with they start to consider how their own choices might be effecting how much money they have left over at the end of the month.

There has been a lot of talk about the new healthcare bill that was passed earlier this week. It has been called the most significant piece of legislation passed in decades. I’m not going to claim expert knowledge of the bill, but from what I understand it will force insurance companies to cover anyone who applies regardless of pre-existing conditions, and puts a limit on how much they can charge. And then the government (read tax payers) will subsidize the cost of insurance for those who “can’t afford it.” Everyone will be required to participate or they will be fined. Sounds like a good plan right? Everyone gets insurance and the government will make sure that it is cheap. Let’s think about this for a minute.

The way I understood insurance companies was pretty simple: You paid so much money each month based on how big of a financial risk you were to the company. A healthy person who would require minimal medical attention would have lower monthly premiums and lower deductibles because in the end they would require the insurance company to pay out less money. An person who is unhealthy, either because of their own bad choices or luck of the draw, would require more frequent medical attention would have higher monthly premiums and higher deductibles because in the end the insurance company would end up paying out more for that person. It’s all a calculated risk based on statistics. Either way you get help paying the bills for things that are covered by your insurance plan, and in the case of a catastrophic illness or injury (if you have a decent plan) you’ll get help paying for the enormous medical bills that usually accumulate (hence why it is called insurance). It’s the same for any other type of insurance: if the insurance company thinks that insuring you is risky because you are a bad driver or your house was built on a flood plain, then you are going to pay more for insurance.

There are ways that this can work in your favor. By keeping a clean driving record or taking a defensive driving course some insurance companies will lower your auto insurance premiums. If you take care of your health (i.e. eat right, exercise, don’t smoke, etc.) then when you apply for health insurance you’d most likely be considered a low risk and you’d save money. By being required to pay a relatively small amount out of pocket for each doctor visit that incentive to stay healthy continues. If I take care of my self then at the end of the year I’ll have more money in my pocket.

Under this new bill an insurance company will be forced to cover everyone, including those people who consist on a diet of Cheetos and Bud Light (at least it’s light) and consider running to the refrigerator during a commercial break exercise. I know not everyone is like this; I’m just trying to illustrating a point. Because of these people’s poor lifestyle choices they are usually considered high medical risks because they are more likely to develop illnesses such as heart disease and diabetes among others. But the insurance company won’t be able to charge them according to the risk that they pose; they’ll only be able to charge the federally mandated limit. So how does that affect the rest of us? Everyone else’s rates go up. Since they can’t charge the high risk people more they will make up the difference by charging the rest of us more, even though we’ve been careful to make sure that we are “low risk.” The insurance company is going to have to make up that money somewhere, remember that the bill has to be paid out of someone’s pocket. And what’s the incentive for the insurance company to charge less than the mandated maximum? Remember that we are now legally required to have health insurance.

Now that the cost will be divided equally among everyone the thousands of dollars that I “save” every year by living healthy are divided among millions who might not be as careful. Do you think those savings will show up on my bottom line? Probably not. Why should I work hard to benefit “the system” when there are so many who, whether they are cognizant of it or not, are a drain on the system? Not only will my insurance costs go up, but I will be taxed more to pay for all of the subsidies and tax credits. Remember, the money has to come from somewhere. And if there ends up being less money to pay for things like medical procedures and doctors visits, do you think that those services are going to improve? Do you think that the bright young minds in our country are going to aspire to be doctors when can go to half as much school and make twice as much money? There will be no incentive for innovation in the health industry and then everyone suffers.

There are motivations for me to make good choices: my own health, and the benefit of society, both noble causes. But in my experience there are enough people out there who care little about either. I look at other government assistance programs as evidence. Working for several years at a grocery store I could see that most of the people getting help through food stamps or WIC somehow needed that money to buy “food,” but in that same trip to the grocery store could drop fifty dollars of their own money on cigarettes and beer. (I know that not everyone on assistance programs behave like this, but ask anyone who has worked at a grocery store, it’s a majority.) And whether we like it or not we as humans are motivated by self preservation. There are few people out there who make decisions based solely on how it will benefit society.

You might be wondering how I could be so naïve and heartless. For the record I have been denied coverage because of a preexisting condition, one that is not totally under my control. I can understand where those people are coming from, but we all have different challenges in our lives. I already donate to programs that help provide for people who have fallen on hard times both through taxes and other donations of my own free will and choice. I’m not opposed to helping other people; I’m opposed to a bureaucrat in Washington D.C. telling how and when. I’m not saying that this new plan is socialized medicine, but I do believe that it is a step in that direction.

It all comes down to the fact that I’d rather have less government than more. If people weren’t so burdened with taxes maybe they’d be able to take care of themselves instead of becoming more dependent on the government. Or maybe the government ought to find ways to help people fix their own problems instead of trying to fix it for them. Making everyone dependent on the government does not make us a stronger nation. I believe that our founding fathers were inspired when they created this nation. A nation based on the rights of individuals to carve out their own destiny, not to have everything handed to them.

If you’ve made it this far, I sincerely thank you for your time.