Originally published at National Review.​

By Vance Ginn & Deane Waldman
October 11, 2024 6:30 AM

Congress should shift the tax advantage from employers to employees to empower patients.

Employers are projected to face a nearly 8 percent jump in costs for providing health insurance to employees in 2025, marking the highest increase in their health-care spending in over a decade. Since 2017,  the costs of employer-sponsored health insurance have increased by a cumulative 50 percent, driven by inflation, rising prescription drug costs, the increasing burden of treating chronic conditions such as cancer and cardiovascular disease, and the cost of regulations.
These costs hit workers and consumers hard.

The out-of-control health-care spending spotlights the flaws of federally-facilitated, employer-sponsored health insurance, which limits competition and inflates health-care prices for everyone.

The employer-sponsored insurance system, a relic of World War II-era wage freezes, continues distorting the U.S. health-care market. Tax-advantaged employer payments for employees’ insurance were implemented to circumvent wage controls, and to attract and retain workers. After the war ended, wage freezes were repealed — but the tax advantage for employers was not.

With the wage freezes gone, health-insurance payments should have been restored as employee compensation so employees could choose how to use their hard-earned money. However, with the tax advantage to employers remaining intact, the funds continue to go to insurance and not to the workers. The system has ballooned into an inefficient approach that inflates costs and reduces consumer choice. If the tax advantage were transferred from employer to employee, this would expand the usefulness of these funds to pay for medical expenses. 

Employees believe “employer-supported health insurance” is a benefit provided by the employer, not what it truly is: Money rightfully theirs that is denied to them. About 165 million Americans rely on employer-sponsored health insurance, but workers have few choices beyond what their employers offer. Employer-sponsored insurance ties up at least $1 trillion in annual health-care spending that could be paid directly to employees, or placed pre-tax into Health Savings Accounts (HSAs) for workers to control themselves. 

As of 2023, employers’ average cost of family health insurance reached a whopping $23,968. While this exclusion saves workers from paying taxes on this amount, it also forces them to accept plans that may not meet their needs. It also disallows them from shopping for better, more affordable options. Put simply, a worker paying a 33 percent tax rate avoids paying about $7,910 in federal taxes on a family-plan premium. This tax break hides the reality that employer-sponsored insurance stifles competition, driving up costs across the system, and is really compensation denied.

Employers must absorb ever-increasing costs, along with employees who pay co-pays and elevated deductibles. In 2025, these costs are expected to rise by 8 percent, with much of the increase driven by pharmacy spending, particularly for GLP-1 medications used to treat obesity and diabetes. This pharmaceutical spending has grown to consume 27 percent of health-care budgets, up from 21 percent in 2021. While these medications could reduce health-care cost over time, we don’t have evidence of it yet.

This system inflates health-care costs by encouraging over-insurance, where employer-sponsored plans cover more than workers need, and limits the free market’s ability to drive competition and lower prices. A free-market approach would allow individuals to shop for health insurance as they do for any other product or service. 

Moreover, while employers try to manage these rising costs through plan adjustments, cost-containment strategies, and vendor partnerships, these efforts barely address the underlying problem. The employer-sponsored insurance system keeps workers from making health-care decisions and forces them into federal one-size-fits-all plans that may not provide the best value or coverage for their needs.

Congress should shift the tax advantage from employers to employees to empower patients and allow them to place these pre-tax dollars directly into their HSAs for expenses related to health care. This would introduce market competition, since workers could control their spending.  Individuals could shop for care and insurance, forcing sellers to compete for their business. Introducing competition would drive down prices, improve care service, and allow consumers to make informed choices that reflect their needs.

This would bring true transparency to health-care pricing as individuals spend their money, creating downward pressure on prices. Empowering patients to make health decisions would help cure America’s critically ill health-care system.

By restoring American workers’ right to spend their money, we would increase choice, lower costs, and further incentivize health-care providers and insurers to improve services. Shifting to a consumer-driven model through no-limit HSAs is a crucial first step to fix the system.

Employer-sponsored health insurance is increasingly unsustainable. As employers (and many employees, too) brace for a large increase in health-care costs in 2025, the need for reform is critical and immediate. By giving workers control of their $23,968 hard-earned money, we can unleash the power of the free market to empower patients and revitalize a failing health-care system.

Originally published at The Center Square. 

As Americans face skyrocketing rents, the Biden administration's Department of Justice has turned its sights on RealPage, a software company accused of promoting anticompetitive practices by helping landlords adjust prices. But this lawsuit misses the mark.

It's not private-sector tools like RealPage driving up housing costs — it's government-induced inflation, elevated interest rates, restrictive zoning laws, and excessive property taxes that artificially inflate housing prices. Instead of targeting software that improves market transparency, the DOJ and policymakers should address the real culprits behind high housing prices.

RealPage's algorithm offers data-driven pricing suggestions based on actual market conditions, not arbitrary calculations. Critics claim the software allows landlords to "collude," but this misrepresents its function.

The software simply enhances transparency by reflecting actual rental prices in the market — similar to dynamic pricing used in airlines and retail. Landlords maintain their freedom to reject the pricing suggestions, and renters retain their sovereignty to choose where to live.

This isn't price-fixing; it's the market working as it should.

In a related misguided move, San Francisco has outright banned RealPage and similar tools from being used. This ban restricts transparency in one of the most expensive housing markets in the country, making it harder for landlords and renters to have an accurate picture of real-time market dynamics. In a city where progressive housing policies have already exacerbated costs, cutting off a tool that provides clarity is a bad idea.

Instead of helping alleviate the housing crisis, San Francisco's decision to ban these tools further compounds the issue by limiting market information.

The DOJ's case relies on the false assumption that landlords blindly follow RealPage's recommendations, but this patronizing narrative overlooks the realities of market behavior.

Algorithms don't set rents — supply and demand do.

RealPage helps landlords better understand market conditions, increasing efficiency and transparency. It's a tool for better decision-making, not a means of manipulating prices. Blaming RealPage is a convenient distraction from the real problem: the government's role in inflating prices.

Since 2020, Congress's massive deficit spending has given the Federal Reserve ammunition to pump trillions of dollars into the economy, driving up prices, including rents.

Since the pandemic, rents have risen by over 20%. Instead of addressing these causes of inflation, the administration is scapegoating private actors like RealPage to avoid accountability for its failed policies.

In addition to inflationary pressures from Washington, state and local governments exacerbate the housing crisis with restrictive zoning laws that limit new construction and burdensome property taxes that raise costs for homeowners and landlords, ultimately passed down to renters.

In cities like San Francisco, these regulations artificially limit housing supply, pushing prices higher.

If policymakers were serious about addressing housing costs, they would focus on removing these government-imposed barriers, not attacking private sector tools like RealPage. Markets work better when participants have access to more information—not less.

Algorithms like RealPage's provide landlords with real-time data about market conditions, allowing for more efficient price adjustments based on supply and demand.

In an environment with a housing shortage and just three months of housing inventory available at current demand, the market must be allowed to operate freely without heavy-handed government intervention.

Dynamic pricing mechanisms efficiently allocate scarce resources, ensuring that housing units are priced according to their value in the marketplace. This is no different from how airlines price seats based on demand or how restaurants adjust prices for specials.

Attacking this type of transparency ignores how these markets actually function, benefiting consumers and businesses by improving price discovery.

Rather than embracing market-based solutions, the DOJ is wasting time attacking private innovation. Instead of scapegoating software, policymakers should focus on spending less, lowering interest rates, easing local zoning restrictions, reducing property taxes, and encouraging new construction.

This would increase the housing supply relative to demand, reduce prices, and address the real root causes of the housing crisis.

RealPage and similar tools are part of the solution, providing better information and transparency in an already constrained housing market. The Biden administration's misguided focus on private actors won't lower prices —free-market reforms will.

​Andrew McVeigh and Vance Ginn with Texas for Fiscal Responsibility to break down the Texas Budget and our path to property tax elimination.

Originally posted at Kansas Policy Institute. ​

With the Federal Reserve recently cutting its federal funds rate target by 50 basis points to a range of 4.75% to 5%, Kansas must reassess its economic policies to prepare for the challenges ahead. Lower interest rates may offer short-term relief by reducing borrowing costs, but the continued risk of inflation demands long-term reforms. Kansas can withstand the economic uncertainty created by the Fed by state policymakers taking proactive steps to reform taxes, reduce spending, and deregulate to improve economic freedom and opportunity.

Economic Freedom Ranking and Implications

According to the Economic Freedom of North America 2023 report, Kansas, currently ranked 14th in economic freedom, lags behind neighbors like South Dakota (5th), Nebraska (13th), and Missouri (15th). Kansas’s ranking reflects areas needing improvement, including high taxes and government spending.

There is abundant evidence that people in countries and states with more economic freedom thrive while those with less don’t. A recent academic study considered information from 54 published articles on relationships between economic freedom and different measures of prosperity and found that “economic freedom is positively related to growth, income, and investment.” This applies with Kansas and other states with higher economic freedom have lower unemployment rates and faster job creation, underscoring the benefits of increasing economic freedom.

The following figure from the report shows the benefits between higher economic freedom and higher income per capita across North America.

Kansas’s tax and regulatory environment has prevented the state from achieving stronger economic outcomes despite its relatively low unemployment rate. To compete with neighboring states and others, Kansas must focus on policies that reduce taxes and remove obstacles to starting a business.

Tax Reform: The Key to Growth

Kansas has made strides in tax reduction, but its personal income tax and high property taxes still pose significant obstacles to business growth and household wealth. States like Texas and Tennessee, which have no personal income tax, consistently rank higher in economic freedom and experience faster population growth and job creation. Phasing out the personal income tax and reducing property taxes would help Kansas attract new businesses and residents. Lower taxes would give businesses more capital to reinvest in jobs and innovation, while making the state more competitive.

Targeted Regulatory Reforms for Small Businesses

Kansas also faces barriers in its regulatory environment, particularly for small businesses. Burdensome regulations, including licensing requirements and other red tape, slow business formation and expansion, hindering economic dynamism. Lawmakers should comprehensively review regulations and focus on removing outdated or excessive rules that stifle small businesses. Streamlining occupational licensing would make it easier for entrepreneurs to start and grow businesses, creating more jobs and opportunities for workers.

Spending Restraint and Fiscal Responsibility

Reducing taxes must go hand-in-hand with controlling government spending. Excessive spending forces higher taxes and crowds out private-sector investment, creating a drag on economic growth. Implementing fiscal rules that limit state spending growth to the maximum rate of population growth plus inflation would ensure that Kansas maintains fiscal discipline. By restraining spending, Kansas can fund critical infrastructure and education without placing additional burdens on taxpayers.

Conclusion: A Path to Greater Freedom and Prosperity

Kansas has the potential to move up the economic freedom rankings, but achieving this requires bold action. By reducing taxes, cutting unnecessary regulations, and controlling government spending, Kansas can build a more vibrant and competitive economy. Following the lead of states like South Dakota and Texas, which prioritize pro-growth policies, Kansas can improve its labor market outcomes, attract investment, and create a more prosperous future for all residents.

Originally published at Mackinac Center. 

​There is no such thing as price gouging. During crises, we see price signals that help allocate scarce resources to those who need them most.

But some Michigan lawmakers are proposing new laws to prevent "price gouging" during emergencies, an approach that misinterprets how markets work. Suppressing these signals, as the proposed laws intend, will result in shortages and ultimately harm consumers.

For example, after the March 2017 windstorm that left many Michigan residents without power, hotel prices surged from $59 to $400 per night. Critics called this gouging, but the price increase wasn’t about greed — it ensured that limited hotel rooms went to those who urgently needed them rather than being snapped up by people with less immediate needs. Higher prices, in this case, helped ensure resources were available for those who needed them most.

In times of crisis — a hurricane, blizzard, or pandemic — demand for certain goods and services soars while supplies become constrained. In a functioning market, prices rise to reflect these changes. This serves two key purposes. First, it encourages consumers to buy only what they truly need, preventing hoarding. Second, it motivates businesses to increase the quantity supplied, so shortages are only temporary. These price signals are essential in ensuring that goods flow where they are most needed.

The proposed legislation in Michigan, such as SB 954 and SB 955, would cap price increases at 10% during emergencies. While this might sound like a consumer protection measure, it sets the stage for greater problems. Price caps prevent businesses from responding effectively to surges in demand. If prices are kept artificially low, consumers have no reason to limit their purchases, which leads to empty shelves and shortages. The result is that the people most in need may be left without essential goods.

Moreover, these price caps discourage businesses from entering the market. When prices rise, new suppliers are incentivized to meet the demand. But if businesses know that prices are capped, they may decide it’s not worth the effort or cost to increase supply during a crisis. This means fewer goods are available, harming consumers.

Critics often argue that businesses raise prices unfairly during emergencies to exploit consumers. While prices may rise, this doesn’t mean businesses are being greedy. Temporary price hikes are often a natural response to increased costs. Even if a business temporarily becomes the sole supplier of a product, new competitors will eventually enter the market, bringing prices back down. Markets correct themselves quickly when competition is allowed to flourish.

We saw this dynamic play out during the COVID-19 pandemic. Demand for products like hand sanitizer and masks surged, but price controls prevented the market from adjusting. As a result, stores ran out of stock because prices couldn’t rise enough to reflect higher demand. If prices had been allowed to increase, this would have signaled to producers to ramp up production and encouraged new suppliers to enter the market.

But will these proposed laws matter if a company can demonstrate that its costs increase to produce or deliver a good during an emergency? No. The laws create a mechanism where government officials can investigate and second-guess their price and cost increases after the fact and punish the company for perceived abuses. Not many companies will look at Michigan in a temporary crisis and try to find solutions for Michigan residents if they’re going to get dragged through the mud and penalized for their good deeds.

Price caps also limit vulnerable consumers' access to goods. Wealthier or quicker buyers often purchase large quantities when prices are held artificially low, leaving fewer resources for those without. In contrast, when prices rise, consumers think more carefully about what they need, ensuring that goods are more widely available for everyone.

Michigan’s proposed price-gouging laws are based on a misunderstanding of how markets work. Price signals are essential in balancing supply and demand, especially during emergencies. Instead of capping prices, which will only create shortages and inefficiencies, Michigan should trust the market to function effectively. When prices rise during a crisis, they help allocate goods to those who need them most, encourage conservation, and motivate suppliers to increase production.

Price increases during an emergency are a rational marketplace response to changing conditions. By allowing higher prices, Michigan can ensure that goods are available during emergencies as businesses are incentivized to meet demand. Price signals matter for bringing goods to the people who need them. Making them illegal will harm consumers.

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.

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.

​Check out episode 76 of This Week's Economy. I discuss whether the Fed will cut interest rates, the anti-growth message by Harris-Walz, problems with tariffs by Trump-Vance, support by RFK, Jr. of Trump, school choice in Texas, and a boom in cities in red states, and much more. Get the show notes at vanceginn.substack.com.