Third-Party Payer Hurts American Healthcare

I’ve shared many videos (here, here, here, here, here, and here) explaining how government has made America’s health system expensive and inefficient. I especially recommend my 2019 speech to the European Resource Bank. Now let’s add this video to our collection. One lesson to take from all these videos is that the main problem with America’s […]

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In a Single Graph, Everything You Need to Know about Third-Party Payer

The main problem with America’s health care system is government intervention (Medicare, Medicaid, the tax code’s healthcare exclusion, etc). The main symptom of all that intervention is pervasive “third-party payer,” which is the term for a system where people buy goods and services with other people’s money. And pervasive is no exaggeration. According to government […]

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Screwing Up Healthcare with Government-Created Third-Party Payer

In addition to speaking on tax competition at the European Resource Bank in Moldova, I also appeared on a panel about healthcare. I used the opportunity to explain how government-created “third-party payer” has crippled market forces in the United States and produced inefficiency and needlessly high costs. There are two visuals from my presentation I […]

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Government-Subsidized Third-Party Payer Is a Great Recipe to Make a Sector of the Economy More Expensive and Less Efficient

What’s the most effective way of screwing up a sector of the economy? Since I’m a fiscal policy economist, I’m tempted to say that bad tax policy is the fastest way of causing damage. And France might be my top example. But other forms of government intervention also can have a poisonous effect. Regulation, for […]

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Subsidies and Third-Party Payer = Inefficiency and Higher Prices

People sometimes think I’m strange for being so focused on the economic harm that results from third-party payer. But bear with me and we’ll see why it’s a very important issue. If you’re not already familiar with the term, third-party payer exists when someone other than the consumer is paying for something. And it’s a […]

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Birth Control, Third-Party Payer, and the Politicization of Health Care

America’s health care system is a mess, and we can assign almost all the blame on government. Simply stated, we don’t have functioning and efficient markets because Medicaid, Medicare, tax-code distortions, and other forms of regulation and intervention have created a system that is crippled by a third-party payer crisis. There’s no logical reason to […]

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The Higher-Education Bubble and Third-Party Payer

Taxes and spending are two of the most obvious burdens imposed by government, and I’m glad that many people are fighting against a political class that seems to have a limitless appetite for a bigger public sector. But politicians also can do great damage to an economy with mandates, regulations, and other forms of intervention. […]

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Government-Created Third-Party Payer Is the Number One Problem in America’s Health Care System

John Goodman of the NCPA has a great article about how the current healthcare system is heavily distorted by government policies that result in people making decision with other people’s money (or at least what they perceive as other people’s money). The excerpt below is a good summary of John’s key points, but I’ll add […]

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Abortion, Third-Party Payer, and the Cost of Health Care

A major problem with America’s healthcare system, both before and after Obamacare, is the fact that consumers very rarely spend their own money when obtaining healthcare. Known as third-party payer, this problem exists in part because government directly finances almost 50 percent of healthcare expenditures. But even a majority of supposedly private healthcare spending is […]

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Don’t Copy the United Kingdom’s Government-Run, Single-Payer Health System

I’m on my way back to the United States from England. My election-week coverage (starting here and ending here) is finished, but I’m still in the mood to write about the United Kingdom. Yesterday, I shared some “Great Moments in British Government” and today I want to look at the U.K.’s single-payer health scheme. The […]

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Taxpayers Are Getting Drowned by Government-Subsidized Flood Insurance

Government subsidies have an unfortunate habit of causing widespread economic damage and often result in huge burdens for taxpayers (though sometimes consumers are the ones getting pillaged). Fannie Mae and Freddie Mac subsidies contributed to a massive housing bubble that destabilized the entire financial system. Means-tested subsidies have undermined progress on poverty by trapping people […]

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Clinton and Trump (Clump?) vs. Taxpayers and Free Enterprise

When Donald Trump and Hillary Clinton agree on things, it’s always bad news for taxpayers. They both want to boost the capital gains tax rate on private equity investment. They both want to let the entitlement problem fester and worsen. They both want more federally financed pork-barrel spending on infrastructure. Now they both agree that […]

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Instead of Fighting to Protect Taxpayers, Politicians Are Enabling Medicare Fraud

Yesterday, I shared several stories that exposed the festering corruption of Washington. Today, let’s look at one issue that symbolizes the pervasive waste of Washington. Medicare is the federal government’s one-size-fits-all health program for the elderly. Because of its poor design, it bears considerable responsibility for two massive problems. It contributes to the systemic third-party […]

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The Left’s Pro-Single Payer Health Care Graphic: Right Diagnosis, Wrong Prescription

The new leftist website, Vox, has an article by Sarah Kliff on Vermont’s experiment with a single-payer healthcare system. But I don’t really have much to say about what’s happening in the Green Mountain State, other than to declare that I much prefer healthcare experiments to occur at the state level. Indeed, we should reform […]

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The Economics of Unholy Alliances: Bootleggers and Baptists

The class-warfare crowd and tax lawyers don’t have a lot in common, but both groups oppose the flat tax. An even stranger unholy alliance involves the War on Drugs, which has the support of both the activists who despise drugs and the criminals who get rich selling drugs in the black market. Professor Bruce Yandle […]

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The “Public Option” and the Future of Employer-Provided Health Insurance

Last night’s train-wreck debate reinforced my disdain for politicians. But let’s ignore the immature theatrics from Trump and Biden and focus on one of their policy disagreements. The two candidates squabbled over whether creating a government-administered health plan (see page 31 for a description of Biden’s so-called  “public option“) would lead to the demise of […]

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The Case Against the Public Option

Even though Joe Biden has embraced a very left-wing agenda, I suspect many of the items on his wish list are designed to placate Bernie-type activists who have considerable influence in the Democratic Party. As such, I don’t think Biden will push “Medicare for All” if he’s elected. But I fear he may support a […]

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Dealing with Coronavirus: What Can Be Learned from Germany and the United Kingdom?

Near the beginning of the croronavirus crisis, I observed that “government-run health systems have not done a good job” of dealing with the pandemic. And I’ve repeatedly noted the failure of government bureaucracies to respond effectively in the United States. Is there, perhaps, a lesson to be learned about what happens when politicians get more […]

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The Worst Coronavirus Policy Proposal: Restoring the Deduction for State and Local Tax Payments

The crowd in Washington has responded to the coronavirus crisis with an orgy of borrowing and spending. The good news is that the legislation isn’t based on the failed notion of Keynesian economics (i.e., the belief that you get more prosperity when the government borrows money from the economy’s left pocket and then puts it […]

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Best and Worst of 2019

Time for my annual column highlighting the “Best” and “Worst” policy developments of the year, a tradition I sort of started in 2012 and definitely did in 2013, 2014, 2015, 2016, 2017, and 2018. I’m trying to be a glass-half-full kind of guy, so we’ll start with the best policy developments for 2019. Boris Johnson’s […]

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Education Week, Part III: How Subsidies from Washington Are Making Colleges More Expensive and Bureaucratic

As part of National Education Week, I’ve looked at the deterioration of K-12 government schools and also explained why a market-based choice system would be a better alternative. The good news is that we have a choice system for higher education. Students can choose from thousands of colleges and universities. The bad news is that […]

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Buttigieg’s Greek-Style Fiscal Policy

Candidates such as Elizabeth Warren and Bernie Sanders supposedly are competing for hard-left voters, while candidates such as Joe Biden and Pete Buttigieg are going after moderate voters. But a review of Buttigieg’s fiscal policy suggests he may belong in the first category. In the interview, I focused on Buttigieg’s plan to subsidize colleges. Hopefully, […]

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Senator Warren’s Looney Medicare-for-All Scheme

I’ve always considered Senator Bernie Sanders to be the most clueless and misguided of all presidential candidates. But I also think “Crazy Bernie” is actually sincere. He really believes in socialism. Elizabeth Warren, by contrast, seems more calculating. Her positions (on issues such as Social Security, corporate governance, federal spending, taxation, Wall Street, etc).) are radical, but it’s an […]

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Taxes Are Unpleasant and Obamacare Is Awful, but there’s a Strong Case for the Cadillac Tax

When I followed public policy in my younger days, I periodically would see stories about legislation that was approved by the House of Representatives with only one dissenting vote. My memory isn’t perfect, I’m sure, but it seems that Ron Paul was always that lonely member. And my recollection is that he was (as usual) […]

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The Middle Class in America Is Benefiting from “Almost Capitalism”

The candidates for the 2020 Democratic nomination are competing to offer the most statist agenda, with Crazy Bernie, Elizabeth Sanders, and Kamala Harris being obvious examples. But let’s not overlook Mayor Pete Buttigieg. He has a moderate demeanor, but he’s been advocating hard-left policies. And he justifies his class-warfare agenda by arguing against Reaganomics and […]

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“Medicare for All” Would Copy the Bad Features of the U.K.’s Government-Run System

The so-called Green New Deal is only tangentially related to climate issues. It’s best to think of it as the left’s wish list, and it includes a paid leave entitlement, government jobs, infrastructure boondoggles, and an expansion of the already bankrupt Social Security system. But the most expensive item on the list is “Medicare for […]

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Subsidies for Higher Education Are Emptying the Pockets of Students and Lining the Pockets of Bureaucrats

I’m not as eloquent on the issue as Professor Daniel Lin, but I recently explained on Fox Business that government subsidies for higher education have enabled big increases in tuition, an outcome that has been good for bureaucrats and bad for students. In effect, this is simply a story of “third-party payer,” which happens when […]

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Trump and the Economy

In a recent interview, I got a chance to pontificate about the recipe for growth and prosperity. Free market capitalism revolutionized the western world, creating prosperity where there used to be deprivation. But that observation is the easy part. Later in the interview, I was asked to give my two cents on whether Trump’s policies […]

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The Pernicious Impact of Government Intervention in Healthcare, Captured in a Chart

America’s healthcare system is a mess, largely because government intervention (Medicare, Medicaid, Obamacare, and the tax code’s healthcare exclusion) have produced a system where consumers almost never directly pay for their medical services. This “third-party payer” system basically means market forces are absent. Consumers have very little reason to focus on cost, after all, if […]

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The Upside-Down Logic of Subsidized Birth Control

When writing about the Obamacare and its birth-control mandate, I’ve made a handful of observations. First, it is very bureaucratic and inefficient to use insurance for routine medical expenses. Sort of like using auto insurance to cover the cost of getting an oil change. Second, insurance coverage means third-party payer, which means birth control will […]

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