Earlier this week the New York State Legislature held a hearing on the New York Health Act, which proposes a single-payer system to replace the conventional public and private insurance model within the state. Supporters and opponents, including our own New York State Association of Health Underwriters, packed the assembly as legislators and witnesses debated a bill that would upend healthcare as New Yorkers know it.
Although many states have been considering various versions of public option systems, the majority of which are a stark departure from the conventional public option system, New York has been debating a Sanders-esque single-payer bill for quite some time now; in fact, murmurs of single-payer have circulated within left-leaning corners of the state legislature for almost two decades. Now that Democrats control the state Assembly, Senate, and governorship, they have the opportunity they need to institute a single-payer system that they approve of.
According to the single-payer bills, Assembly Bill A5248 and Senate Bill S3577, introduced by Democrats Richard Gottfried and Gustavo Rivera, New Yorkers would no longer have to pay premiums, deductibles, co-pays, out-of-network charges or have limited provider networks. Instead, a comprehensive government-run insurance plan, funded by federal support and radically different state tax brackets, would cover 100% of New York residents. There is no doubt that healthcare costs are on New Yorkers’ minds; a recent state-wide survey shows that more than half of respondents believe their current healthcare costs are unaffordable. “Either we say ‘that’s not acceptable but oh, that’s too bad’, or we do something about it,” Assemblyman Gottfried said.
As with every proposed single-payer system, the main concern is funding. According to analysis by the think tank RAND Corporation, which has been utilized by both supporters and opponents, the state would need to raise an additional $161 billion in tax revenue in order to cover all New Yorkers, and raise an even greater $210 billion by 2031. Considering that the state collected $76 billion in tax revenue between 2017 and 2018, this number immediately appears unrealistic. However, proponents of the measure claim that a new tax system, which includes placing the bulk of the tax burden on the wealthiest citizens, would solve the issue. They are also offering the familiar argument that any tax increases residents see will be offset by the lack of premiums and other fees related to private insurance. One of the suggested tax increases would see the state tax rate on a household reporting $150,000 increase from 6.45% (in 2017) to 18.3%.
Jamie Schutzer, Legislative Committee Co-Chair of NAHU’s New York state-wide chapter, testified in front of the state assembly on Tuesday, where he had the opportunity to outline the numerous problems with the single-payer bills. “It’s worth noting that approximately 70% of NYS income tax revenue is generated by New York City Metro area businesses and residents – many of whom could easily relocate,” Schutzer pointed out in his opening statement. “If only one half of 1 % of the top earning residents of New York move out of state, the non-payroll tax rates needed to fund the New York Health Act projected in the Rand Report would need to rise almost 380% by 2022.” Schutzer also mentioned several ways that New York could improve access to healthcare without instituting a single-payer system, including: repealing the Cadillac Tax, developing community outreach programs to uninsured New Yorkers who are eligible for already existing public health insurance options, and more.
Whether these bills will pass is currently up in the air. Despite the Democratic majority, the state Senate has opted not to put the bill to a vote prior to the end of the legislative session. Many legislators who previously supported single-payer have grown more cautious as the idea is closer to becoming reality, and it seems proponents will need to have much more detailed discussions before anything is passed.