Originally published at Kansas Policy Institute. 

​Medicaid Expansion: The Wrong Prescription for Kansas
Should Kansas pass Medicaid expansion? That is the question. 

Proponents argue that expansion will bring more Kansans under healthcare coverage and boost the state’s economy. However, a closer examination reveals a troubling picture. Medicaid expansion would saddle Kansas with unsustainable costs, strain the healthcare system, and hinder future economic growth—all without significantly improving healthcare quality.

Financial Burden and Inefficiency
Kansas already spends over $4 billion annually on Medicaid, with the federal government covering about 62% of the costs and the state covering the remaining share. Although proponents of Medicaid expansion highlight that the federal government would cover 90% of the expansion costs, Kansas would still face an additional burden—about 10% of the total cost. While this may seem manageable, Medicaid expansion could increase Kansas’ annual spending by $1 billion or more.

Expanding Medicaid increases overall costs and diverts funding from critical areas like education, infrastructure, and tax relief—investments that drive economic growth and job creation. Medicaid expansion has consistently failed to deliver meaningful improvements in healthcare quality, creating a vicious cycle of inefficiency and waste.

Poor Access and Quality of Care
Medicaid’s existing system is already straining to provide quality care, and expanding it would only worsen the situation. Low reimbursement rates to healthcare providers mean fewer doctors are willing to accept Medicaid patients, leading to longer wait times and reduced access to quality care. Medicaid recipients often experience delays in receiving medical attention, sometimes waiting months to see a specialist.

Rural healthcare is especially vulnerable. Many rural hospitals struggle with declining patient volumes and financial pressure, and Medicaid’s low payments exacerbate these issues. While expansion advocates claim that more funding will solve rural healthcare challenges, this strategy will unlikely reverse trends like population decline in rural areas.

A better solution would be to tackle these issues with targeted reforms. Kansas could reduce barriers for healthcare providers by reforming Certificate of Need laws to allow more facilities to be built. Additionally, expanding the scope of practice for nurse practitioners and occupational licensing reform that recognizes out-of-state clinician licenses would increase the availability of doctors and other medical professionals. Encouraging virtual healthcare services like telehealth would also improve access to care in underserved areas.

The Hidden Costs of Medicaid Expansion
Kansas should also be wary of the unintended consequences of Medicaid expansion. Nationwide, the cost per enrollee for Medicaid expansion was 64% higher than originally projected as of 2022. Moreover, Medicaid’s fiscal inefficiencies are staggering: in 2020, one in five dollars spent on Medicaid was an improper payment, amounting to $86 billion in waste nationwide that year. This figure remained high in fiscal year 2023, with $31.2 billion in improper payments. These inefficiencies raise concerns that Kansas could face a growing fiscal burden if expansion moves forward.

Medicaid expansion has consistently failed to meet enrollment projections, leading to higher state costs. In Montana, for example, initial enrollment projections for expansion were far lower than the actual outcome, leading to significant cost overruns. Kansas should be wary of falling into the same trap.

Economic Downside of Medicaid Expansion
Beyond the direct costs, the broader economic implications of Medicaid expansion are equally concerning. Expansion advocates argue that it will create jobs and stimulate the economy, but such benefits are temporary and pale compared to the long-term consequences of higher taxes and increased dependence on federal dollars.

As the federal government faces its fiscal challenges, Kansas risks being left to shoulder a greater share of Medicaid costs in the future. This could lead to higher state taxes, stifling private-sector growth, and deter investment in Kansas. Expansion would merely create a larger, costlier system without addressing the underlying problems that plague healthcare access and affordability in the state.

A Better Path Forward: Reform, Not Expansion
Kansas can address its healthcare challenges without expanding Medicaid. Reforms should focus on tightening eligibility requirements and instituting work incentives for work-capable adults. This would ensure that resources are targeted to those who genuinely need assistance while reducing the program’s financial strain on the state.

The state should also look to market-driven solutions to reduce healthcare costs. Expanding the use of Health Savings Accounts (HSAs), enhancing price transparency, and encouraging competition among healthcare providers are proven strategies to make healthcare more affordable while maintaining high-quality care.

Reforms that reduce unnecessary regulation will also have a positive impact. Easing restrictions on short-term, limited-duration insurance plans would provide Kansans with more affordable coverage options that better meet their needs.

Conclusion
Medicaid expansion is not the answer to Kansas’ healthcare challenges. The state is already spending billions of dollars on a system that delivers subpar outcomes and inefficient care. Expansion would only exacerbate these issues while putting Kansas on a fiscally unsustainable path. Instead of expanding a broken system, Kansas should focus on reforms that reduce costs, improve access, and ensure long-term healthcare sustainability. Market-based solutions that encourage competition and innovation hold the key to a healthier Kansas—both financially and medically.

​In episode 77 of This Week's Economy, I break down the flawed economic promises of presidential candidates who ignore that nothing is truly free. From proposed AI regulations and fracking policies to tax plans and protectionism, I explore the impact these issues have on innovation, energy independence, and economic growth while highlighting why free-market solutions are key to prosperity. Get the show notes and more information at vanceginn.substack.com.

Originally published at KTRH News Houston.

State budget officials believe Texas would have to spend about $81.5 billion a year to end property taxes.

Reducing or even eliminating the state’s high property taxes has been something on the minds of Texas lawmakers for a handful of years now.

The Texas Senate Finance Committee were presented the costs from the Legislative Budget Board recently. Just over half ($42 billion) would go to cover the property taxes collected by cities, counties and special taxing districts from last year.

Economist Vance Ginn calls property taxes "fundamentally immoral."

"I believe that they should be eliminated at the end of the day but of course with any sort of policy change nothing is free," he said.

School property taxes make up a large portion of the figure too. Budget officials say that getting rid of all property taxes collected by school districts would cost the state $39.5 billion.

"That's really where the focus is is the state eliminating the school portion first," Ginn said, who believes would take about a decade if state spending is seriously limited.

Ginn also suggested using surplus money to buy down the school maintenance and property tax over time wouldn't be a bad idea either in eliminating nearly half of the state's property taxes.

"There are ways to do this in a fiscally conservative way that can allow for Texas to get rid of property taxes within about a decade, certainly about half the property taxes, but they could even do all the property taxes if local governments would also limit their spending," Ginn said.

According to Ginn, state lawmakers have put around $18 billion towards property tax relief with $12.7 billion in new relief approved during the last legislative session. However, there has not been much change overall in Texas property taxes.

"There's more that needs to be done to reign in government spending at the local levels and the state level," said Ginn. "Reducing property taxes for Texans would be a huge relief for them."

Interview on NTD News.

Vice President Kamala Harris has announced plans to raise both the corporate tax rate and the rates on capital gains taxes.
According to Vance Ginn, the founder and president of Ginn Economic Consulting and a former chief economist at the White House’s Office of Management and Budget, these provisions will slow the economy and stifle investment. NTD spoke to him to find out more.

​Joining the show today is Vance Ginn. Vance is the founder and president of Ginn Economic Consulting, where he leverages data-driven insights to shape economic policy discussions across the nation. 
 
Over the course of the show, Veronique and Vance discuss state and local government spending, federal spending, and the connection between the two.

Don't miss it!

Originally published at Washington Examiner.​

Government intervention in markets is back in vogue after Vice President Kamala Harris proposed price controls on groceries and food. But this isn’t the only price control the government is eyeing. The Federal Reserve is picking sides in a fight between banks and big-box retailers concerning who pays what when a customer makes a purchase using a debit card.

The proposed regulation, known as Regulation II, limits the amount that large banks can legally charge merchants to process a debit transaction. It was first enacted in 2011 as required under the Dodd-Frank Act. At the time, retail lobbyists tried to justify this price cap by arguing that lower debit card interchange rates would translate to savings for consumers at the register.

​Surprise, surprise: Those savings never transpired. Only about 2% of large retailers reduced consumer costs after the initial implementation of Regulation II, per research from the Federal Reserve Bank of Richmond. Instead of passing on savings, these large merchants often pocketed the difference, undermining the very premise of the regulation.

Letting large companies such as Walmart fight their own battles seems like a no-brainer in a free market economy. Companies come together, negotiate a contract, and, if they don’t like what they’re paying, find an alternative provider.

Yet, retail lobbyists have somehow convinced the Federal Reserve to tip the scale in their favor by further lowering the legal limit that large retail stores have to pay to process debit transactions. Meanwhile, banks and card networks such as Visa and Mastercard will be forced to cover the cost.

​This change could have serious consequences for consumers and small financial institutions, but it also sets a bad precedent for the government’s role in the marketplace. Should the Federal Reserve’s mission be to pick winners and losers when it comes to the activities between private companies? The answer is no.

The Federal Reserve isn’t oblivious to the politics here. It knew it would be controversial, therefore, it only applied Regulation II to institutions with over $10 billion in assets. That way, it wouldn’t also have to justify the changes to frustrated community banks and credit unions. Yet, the regulation had unintended consequences hitting even these exempt institutions. Between 2011 and 2021, debit card interchange revenue for exempt issuers fell by 13% for single-message network transactions, a clear sign that the ripple effects of price controls extend far beyond their intended targets.

Moreover, the proposed regulation’s stricter routing requirements could further strain smaller banks by limiting their flexibility in negotiating better terms with networks. This could reduce their ability to offer competitive pricing and services to consumers, stifling innovation and increasing operational costs. In 2014, a survey found that 73.3% of exempt banks reported that the policy hurt their earnings, indicating that even institutions not directly subjected to the cap suffer from these market distortions.

Given these harms, it’s unsurprising that groups representing community banks, credit unions, and minority depository institutions oppose the Federal Reserve’s proposed changes. By imposing these price caps, the Fed is not leveling the playing field but rather tilting it in favor of bigger firms, leaving financial institutions, especially smaller ones, at a disadvantage.

Government intervention in pricing inevitably leads to market distortions. Whether it’s rent control, wage control, or debit card fees, price fixing creates artificial shortages, misallocates resources, and stifles innovation. When the government dictates prices, it disrupts the natural balance of supply and demand, leading to unintended consequences that ripple through the economy.

The Fed’s willingness to cave to retail lobbyist demands ignores the lessons of the past decade. Instead of fostering competition or benefiting consumers, these price controls have distorted the market, harmed smaller institutions, and failed to deliver on their promise of consumer savings. It’s a textbook case of the government picking winners and losers, propping up large retailers while putting additional strain on institutions that are the backbone of many communities.

The reduced debit card transaction fee revenue for smaller, exempt banks directly affects their ability to offer competitive services and maintain profitability. As these institutions struggle, the services they provide, often vital to underbanked or rural communities, could diminish, leading to fewer options for consumers. This contradicts the goal of financial inclusivity and broad access to banking services.

The reality is that government price setting rarely benefits the average consumer. While lower costs are appealing, the savings seldom materialize where they’re needed most. Instead, the benefits accrue to large retailers while smaller banks, credit unions, minority depository institutions, and their customers bear the brunt of the costs.

As the Fed considers its next steps with Regulation II, it should be wary of further entrenching these market distortions. The path forward should focus on enhancing competition and innovation in the payments ecosystem, not embracing failed price controls and doing the bidding of corporate lobbyists. If the goal is to create a more equitable financial system that benefits all consumers, the Fed should reconsider its involvement and allow market forces, not government mandates, to determine prices.

​Read the full testimony with charts and data here: https://www.vanceginn.com/letpeopleprosper/testimony-before-the-texas-senate-committee-on-finance-presented-by-vance-ginn-phd-on-september-4-2024

Join me for Episode 112 of the Let People Prosper Show with Dr. Abby Hall as we discuss her fantastic book "How to Run Wars: A Confidential Playbook for the National Security Elite." She is an Associate Professor in Economics at the University of Tampa and received her PhD in Economics from George Mason University in Fairfax, Virginia. 

Subscribe, share, and rate the Let People Prosper Show, and visit vanceginn.com for more insights.

​Unlock the Secrets of Housing Market Regulations and Real Estate Growth!
​
Discover how housing market regulations are reshaping real estate growth and affordability in 2024. Join Mike Mills and economist Vance Ginn, Ph.D., as they dive deep into the key policies, economic strategies, and insider insights every real estate professional needs to know.

In this episode, you'll learn about the critical changes in housing market regulations and how they impact real estate growth and home affordability. Understand how fiscal policy, zoning laws, and commission structures are influencing market dynamics. Vance Ginn provides expert analysis on navigating these challenges to help Realtors and real estate professionals thrive in today's evolving landscape.

Key Takeaways:

Housing Market Regulations Explained: Learn how recent policy changes affect home prices, market competition, and Realtor strategies.

Impact of Economic Policies: Understand how inflation, interest rates, and government spending shape the real estate market and what it means for your business.

Navigating Property Tax Reforms: Discover actionable strategies to adapt to changes in property tax policies and maintain your competitive edge.

Leveraging Knowledge for Growth: Get expert tips on using economic insights to drive real estate growth and stay ahead of market shifts.

Don't miss out on these game-changing insights that could redefine your approach to real estate. Watch now to stay informed and ahead of the curve in 2024!

🔔 Like, Comment, and Subscribe for more in-depth discussions on real estate trends and strategies. Share your thoughts on the episode in the comments below and let us know which topic you'd like to see next!

Links and Social Media:

🌐 Podcast Website: https://www.thetexasrealestateandfina...
🏠 Mike Mills Mortgage Website: www.millsteammortgage.com
📊 Vance Ginn's Website: https://www.vanceginn.com/