Risks of Privatization of Fannie Mae and Freddie Mac

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UCLA Luskin Professor Wesley Yin wrote a Fortune op-ed titled “Privatizing Fannie Mae and Freddie Mac the wrong way risks a second Great Recession.”

Fannie Mae and Freddie Mac are government-sponsored enterprises that play a major role in the U.S. housing market by purchasing qualifying mortgages from lenders and bundling them into mortgage-backed securities, helping keep borrowing costs lower and credit accessible for homebuyers. The Trump administration has signaled that reprivatization could begin as early as the second quarter of 2026.

Yin, a professor of public policy at UCLA Luskin with a joint appointment at the UCLA Anderson School of Management, warns that the current approach lacks transparency and could dismantle critical safeguards established after the 2008 financial crisis. “A hasty insider-driven IPO and exit from conservatorship will erode the safeguards that have kept the housing market stable, exacerbate systemic risks, and primarily enrich shareholders,” he says. “Such a move would align with the Administration’s agenda of rolling back other financial regulations and oversight.”

Rather than improving affordability, Yin argues that it would instead benefit wealthy investors and increase borrowing costs, potentially encouraging the type of risk-taking that contributed to the Great Recession.

Counteracting the Market Dominance That Keeps Health Care So Expensive Research by UCLA Luskin's Wesley Yin is one of several projects made possible by nearly $55 million in awards to the school

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Americans are facing rising health expenses year after year, with many compelled to skip or delay the care their families need. To investigate the root causes of this barrier to affordability, UCLA Luskin’s Wesley Yin has embarked on a pair of ambitious studies of market power in the health care industry — and how it might be checked.

Yin’s research, funded by the nonprofit Arnold Ventures, will seek to answer several questions:

How has consolidation in the industry — mergers among hospitals, physician practices, insurers, and pharmaceutical managers, for example —  eroded competition?

How has the market dominance of hospitals and other medical care providers suppressed wages in the health sector — an industry that accounts for 18% of the U.S. economy?

Can “public option” health insurance plans, with cost structures set by government statute, exert enough pressure to counteract the price-negotiating power of dominant providers, leading to lower health care bills?

Headshot of man in suit, white shirt, tie

Professor Yin will tap into powerful research tools to explore market forces in the health sector.

“There are a lot of markets in the U.S. economy that are no longer competitive. This can generate some benefits at times. But the broad concern is that this can create a lot of distortions in the markets, which ultimately bear down on consumers and on workers through higher prices, fewer options, and lower wages,” said Yin, a UCLA Luskin professor of public policy with a joint appointment at the UCLA Anderson School of Management.

“Health care is an industry where this concentration has been rising for decades.”

Yin’s two-year study was made possible by a $466,000 grant from Arnold Ventures, which funds research into policy solutions that address inequity and injustice. It is one of several grants and contracts that have brought nearly $55 million to the UCLA Luskin School of Public Affairs from April to October 2025.

By far the largest component of that funding — more than $47 million — is from federal, state, and county agencies that contract with UCLA Luskin Social Welfare to administer social services and training programs.

Philanthropic groups, nonprofits, community organizations, and public agencies have also stepped up to support UCLA Luskin research spanning the school’s broad portfolio: fair housing, water quality, voting rights, K-12 education, parking reform, and more.

The common thread is a desire to find policy solutions to the most pressing issues of our time, with donors turning to UCLA for its extensive faculty expertise and deep resources as a top-tier research university.

Yin’s work draws on his experience as a scholar, economist and public servant. Motivated by a desire to understand the causes and consequences of excessive market power, he recently co-authored a high-impact study of the crippling impact of medical debt in America.

In the Biden Administration, Yin served as Chief Economist of the White House Office of Management and Budget, where he helped advance policies surrounding affordability and competition. In the Obama Administration a decade earlier, he helped implement the Affordable Care Act during his service in the Department of Treasury and Council of Economic Advisors.

For his current project on the health care industry’s market power, Yin and his research team will tap into powerful resources, including the Federal Statistical Research Data Center, housed in the UCLA Luskin Public Affairs building. Access is highly selective, requiring security clearances and confidentiality agreements — but the massive trove of data opens up vast opportunities for novel research.

Yin has secured permission to analyze anonymized U.S. Census Bureau and Internal Revenue Service files to assess the impact of consolidation in the health care industry on workers’ earnings and job stability — including the potential for lopsided bargaining power and wage inequality.

For a second investigation funded by the grant, Yin and his team will review records from Washington state’s public option health care program, the first in the nation. They hope to identify how such public-private partnerships in procurement can best be structured to act as a brake on soaring health care costs.

“In theory, a public option, if it’s structured well, could try to achieve the prices of what a competitive market would have achieved,” said Yin. “The big question is how to design a public option program with teeth that also supports a healthy hospital market. This project essentially is to understand this.”

Wesley Yin

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Wesley (“Wes”) Yin is a Professor of Economics at the UCLA Luskin School of Public Affairs, and the Anderson School of Management. He is also a Research Associate at the National Bureau of Economic Research, and a Faculty Affiliate at the Jameel Poverty Action Lab at MIT.

Yin’s research focuses on health care, consumer finance, and economic inequality. His recent work studies competition and market power, and the links between health care financing and consumer financial health and well-being.

His work has been published in leading economics and policy outlets such as the Quarterly Journal of Economics, the American Economic Review, the Review of Economics and Statistics, JAMA, Health Affairs, and the Hamilton Project at the Brookings Institution, and has been covered by the New York Times, Washington Post, New Yorker, Forbes, The Guardian, Bloomberg, The Atlantic, Vox, and others.

From 2023-24, Yin served in the Biden Administration as Associate Director for Economic Policy, and Chief Economist, in the Office of Management and Budget. Previously, he served in the Obama Administration as Acting Assistant Secretary for Economic Policy in the Department of the Treasury, and as Senior Economist in the White House Council of Economic Advisers.

Previously, he was an assistant professor at the University of Chicago and Boston University, and a Robert Wood Johnson Scholar in Health Policy at Harvard University. He received his PhD in economics from Princeton University.

Working Papers

Provider Market Power and Adverse Selection in Health Insurance Markets: Evidence from the California Health Benefits Exchange (with Nicholas Tilipman). Draft available, upon request.

Selected Publications  

The Effects of Medical Debt Relief: Evidence from Two Randomized Experiments (with Ray Kluender, Neale Mahoney and Francis Wong). The Quarterly Journal of Economics, 140(2): May 2025, 1187–1241. NBER Working Paper version (WP#32315, April 2024).

Pre-registrations: J-PAL Summary. AEA Pre-registration 1 (Collector Debt). AEA Pre-registration 2 (Hospital Debt).  Media coverage: New York Times, The Guardian, Forbes, St. Louis Public Radio, Bloomberg, Vox, The Atlantic, Vox Today, Explained (Podcast), Tradeoffs (Podcast)

The Impact of Financial Assistance Programs on Health Care Utilization (with Alyce Adams, Ray Kluender, Neale Mahoney, Jinglin Wang, and Francis Wong). American Economic Review: Insights. 4(3), September 2022: 389-407. Online Appendix.

Personalized Telephone Outreach Increased Health Insurance Take-Up for Hard-to Reach Populations (w/ Rebecca Myerson, Nicholas Tilipman, Andrew Fehrer, Honglin Li, and Isaac Menashe) Health Affairs. 41(1): 129–137, January 2022.

Trends in Medical Debt During the COVID Pandemic (with Raymond Kluender, Benedict Guttman-Kenney, Neale Mahoney, Francis Wong, and Xuyang Xia) JAMA Health Forum 3(5):e221031, May 2022.

The Role of Behavioral Frictions in Health Insurance Marketplace Enrollment and Risk: Evidence from a Field Experiment. (with Richard Domurat and Isaac Menashe) American Economic Review 111(5): 1549–1574 , May 2021. [Online Appendix] Media Coverage: Tradeoffs Podcast

Medical Debt in the United States, 2009-2020 (with Ray Kluender, Neale Mahoney and Francis Wong) Journal of the American Medical Association 326(3), July 2021. Media Coverage: NY Times, Washington Post, Vox, Marketwatch, CBS Evening News, Marketplace. JAMA editorial.

The Market for High-Quality Medicine: Retail Chain Entry and Drug Quality in India. 2019. (with Daniel Bennett) Review of Economics and Statistics 101(1) p.76-90 [Appendix]

Insurers’ Negotiating Leverage and the External Effect of Medicare Part D. 2015. (with Darius Lakdawalla), Review of Economics and Statistics 97:2 p.314-331 (an earlier version appears as NBER working paper no. 16251). Media coverage: New Yorker

Value of Survival Gains in Chronic Myeloid Leukemia (with John Penrod, J. Ross Maclean, Darius Lakdawalla and Tomas Philipson) American Journal of Managed Care 2012 Nov;18(11 Suppl):S257-64

R&D Policy, Agency Costs and Innovation in Personalized Medicine. 2009. Journal of Health Economics 28(5): 950-962.

Market Incentives and Pharmaceutical Innovation. 2008. Journal of Health Economics 27(4):1060-1077.

Female Empowerment: Impact of a Commitment Savings Product in the Philippines. 2010. (with Nava Ashraf and Dean Karlan) World Development 38(3): 333-344.

The Effect of the Medicare Part D Prescription Benefit on Drug Utilization and Expenditures (with Anirban Basu, James Zhang, Atonu Rabbani, David Meltzer, and Caleb Alexander) Lead article at Annals of Internal Medicine 148(3): 169-177. Annals’ Summary for Patients.

Designing Targeting Schemes with Poverty Maps: Does Disaggregation Help?. 2007. (with Berk Özler, Chris Elbers, Tomoki Fujii, Peter Lanjouw) Journal of Development Economics 83(1).

Tying Odysseus to the Mast: Evidence from a Commitment Savings Product in the Philippines. 2006. (with Nava Ashraf and Dean Karlan) Quarterly Journal of Economics 121(2). Winner of TIAA-CREF 2006 Certificate of Excellence.

Deposit Collectors (with Nava Ashraf and Dean Karlan). 2006. Advances in Economic Analysis & Policy 6(2), Article 5.

 

Other Publications and Policy Articles  

Options To Improve Affordability In California’s Individual Health Insurance Market, (with Peter Lee, Katie Ravel and Nicholas Tilipman), a Covered California report for Gov. Newsom, California State Senate and State Assembly pursuant to AB1810, February, 2019

How retail drug markets in poor countries develop (with Dan Bennett) VoxDev.org, August, 13th, 2018.

Potential Impacts of Graham-Cassidy-Heller-Johnson on Californians and the Individual Health Insurance Market (with John Bertko) Covered California Report, September 25, 2017

Evaluating the Potential Consequences of Terminating Direct Federal Cost-Sharing Reduction (CSR) Funding (with Richard Domurat) Covered California Report, January 26, 2017  [Appendix]

Trump’s “populist” economic proposals come with massive catches. Here’s what to watch for. Vox, November 18, 2016

Strengthening Risk Protection through Private Long-Term Care Insurance. Brookings Institution, Hamilton Project Discussion Paper 2015-06, June 2015. Policy Brief.

The impact of Medicare Part D on Medicare-Medicaid Dual-eligible Beneficiaries’ Prescription Utilization and Expenditures (with Caleb Alexander and Anirban Basu), Health Services Research, February 2010, 45(1), pp. 133-151   

Valuing health technologies at NICE: Recommendations for Improved Incorporation of Treatment Value in HTA (with Dana Goldman, Darius Lakdawalla and Tomas Philipson) Health Economics October 2010, 10(11) pp. 1109-1116

Solutions and Challenges to Curing Global Health Inequality Innovations 2(4), October 2007, 2(4), pp. 72-80

Testing Savings Product Innovations Using an Experimental Methodology (with Nava Ashraf and Dean Karlan), Asian Development Bank, Economics and Research Department Technical Paper No. 8. November, 2003

A Review of Commitment Savings Products in Developing Countries (with Nava Ashraf, Nathalie Gons, Dean Karlan) ERD Working Paper, July 2003.

 

Teaching

Public Finance and the Economics of Inequality (Econ 415)

Health Care Finance and Management (MBA and MPP elective) (MGMT298 & PP290)

Econometrics for Policy Analysis (MPP Core) (PP208)

Applied Policy Project (APP) Capstone Advisor (PP298)

Wesley Yin Appointed Chief Economist of White House Budget Office

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UCLA Luskin’s Wesley Yin has been appointed chief economist at the White House Office of Management and Budget (OMB). Yin heads OMB’s Office of Economic Policy, where he will help formulate President Biden’s budget and work on a wide range of issues, including national tax policy, health care and social insurance, climate policy, labor and student loans. OMB assists the president in meeting administration policy, budget and management objectives across the federal government. “There’s the saying, ‘Don’t tell me what you value. Show me your budget — and I’ll tell you what you value.’ This saying resonates with me, and now more than ever at OMB,” said Yin, whose research focuses on economic inequality, health care and household finance. During his government service, Yin will be on leave from UCLA during the 2023-24 academic year. He previously served on the White House Council of Economic Advisors and as the U.S. Treasury Department’s deputy assistant secretary of economic policy during the Obama administration.

 

Yin on L.A. County Proposal to Erase Medical Debt

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UCLA Luskin Public Policy Professor Wesley Yin spoke to the Los Angeles Times about a proposal by the L.A. County Board of Supervisors to purchase and forgive more than $2 billion in medical debt owed by constituents. A growing number of local and state governments have launched similar efforts to purchase such debt at a steep discount, relieving patients and their families of a heavy burden. Yin, who has researched the impact of these programs, said they are particularly beneficial if they erase debt early on, when patients are still working to pay it off. If L.A. County focuses on purchasing the cheapest debt, the kind of years-old medical bills that most people have long forgotten about, “it might not impact people’s financial situations that much anymore,” he said. In addition to debt forgiveness programs, solutions such as hospital financial assistance programs and health insurance expansions would help ensure that bills are paid more quickly, Yin said.

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Yin on the Burden of Medical Debt in L.A.

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Wesley Yin, associate professor of public policy at UCLA Luskin, spoke to LAist about the burdens of medical debt. In Los Angeles County, 1 in 10 adults are currently in debt due to medical care. Yin’s research shows that when hospitals wipe out patients’ debt and temporarily reduce how much they pay in co-pays, they are more likely to fill prescriptions and utilize health care resources. Yet within six months, even those whose debt was forgiven had returned to getting less care due to high costs. “Getting rid of medical debt may help in the short term, but a one-time cancellation doesn’t impact the future debts they may incur,” Yin said. He added that medical credit cards and other loans for medical bills can have high interest rates that deepen debt and threaten patients’ financial security.

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Yin on Alarming Methods for Repaying Medical Debt

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Wesley Yin, associate professor of public policy and management at UCLA Luskin, spoke to the New York Times about new options for paying off medical debt that can ultimately be more costly than using regular credit cards. Medical debt is a burden that has plagued many Americans throughout the years, with about 23 million adults owing more than $250 in health care debt. Yin said some financing plans for repaying this debt have alarming consequences. Some lenders provide small loans at a zero-percent interest rate if it is paid over the course of a few weeks. If the debt cannot be repaid by the deadline, however, high interest will be charged retroactively from the start of the loan. Other financing plans charge extremely high interest rates, with the annual percentage rate of a typical medical credit card being 27%. 

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Yin on Effects of Mass Medical Debt Forgiveness

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Wesley Yin, associate professor of public policy and management, was cited in an article by NOLA News about an initiative in New Orleans to erase $130 million in medical debt held by the city’s residents. The New Orleans City Council voted last year to allocate funds to a New York-based nonprofit that purchases medical debt on secondary markets, then forgives it. Yin, who is working with the nonprofit to observe the effects of debt forgiveness, said that eliminating newer debt is potentially more impactful than eliminating older debt. He also said there are limits to what providers can do to curb the effects of patient debt. “The problem of debt is something that’s beyond what a hospital really controls, and a much larger problem about inequality and financing in health care systems,” Yin said. “The best place to do this is prevention, and just have more generous health insurance to begin with.”

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Yin on Growing Efforts to Wipe Out Medical Debt

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Wesley Yin, associate professor of public policy and economics, spoke to the New York Times about local governments’ efforts to address the high cost of health care by canceling their constituents’ medical debts. People with medical debt are less likely to seek needed care, and carrying a sizable debt load can damage credit and make it difficult to find employment, research shows. So across the United States, city and county officials are using funds from President Joe Biden’s American Rescue Plan to provide medical debt relief to eligible residents. Erasing this debt could be a “game changer” for some people, said Yin, who is studying the impact of medical debt relief programs on people’s livelihoods. He added, however, that governments should also address the root causes of medical debt, including high costs and limited access to good health insurance.

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Yin on Strategies to Reduce Medical Debt

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Wesley Yin, associate professor of public policy and management, spoke to the podcast Tradeoffs about how Americans can reduce their medical debt. Currently, about 100 million Americans have amassed more than $140 billion in medical debt. Yin explained that simply forgiving a person’s medical bills is a short-term solution to the greater problem of accumulating medical debt. When a hospital erases debt and temporarily reduces service costs, patients became more likely to receive care; however, within six months, they are likely to go back to getting less care as their debt again piles up, a study by Yin has found. Yin and his colleagues also published a paper in JAMA showing that states with Medicaid had far less medical debt than those without it. “In the states that expanded Medicaid, the amount of debt basically was halved. And in places that didn’t, it was essentially unchanged,” he told the podcast in a segment beginning at minute 10.

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