Myths, misinformation and facts: About the New York Health Act and single-payer health care
By the time you read this, the New York Health Act, otherwise known as New York’s single-payer health care bill, will have been passed by the New York State Assembly for the fourth consecutive year. California has a similar bill in its state Assembly for the second year in a row. Bernie Sanders introduced his “Medicare for All” In the U.S. Senate early last year, and proponents of his plan have just launched a nationwide information campaign to promote it. Another single-payer bill, H.R. 676, was resubmitted to the U.S. House at the same time and will likely be voted on, and possibly approved next year should the Democrats regain control of the House this November.
Like most new things, single-payer’s growing popularity has provoked not only increased interest but a proliferation of myths and misinformation. Which is why I’ve written this article.
First, single-payer health care is not socialism. The health care system will not be taken over by the state but will remain as is, with existing hospitals and providers caring for their patients just as they now do. The fundamental change is that the payer of all costs incurred will be one, the state of New York, and not the hundreds of private insurance companies that now perform that task. Next, and contrary to the contentions of conservative economists, the goal of single-payer is not the transfer of wealth from rich insurance companies and their stockholders to the “have nots,” but universal access to comprehensive health care for all New Yorkers, 16 percent of the cost for which will be derived from savings realized from reduced insurance administrative costs, $28.6 billion; reduced physician and hospital administrative costs, $20.7 billion; the bulk purchasing of drugs and medical devices, $16.3 billion; and from reduced fraud, $5.4 billion. (For a complete financial analysis of the New York Heath Act, log onto the Campaign for New York Health’s website, www.nyhcampaign.org, and download Dr. Gerald Friedman’s study on the Resources page.)
The most damning piece of misinformation about single-payer is that the high cost of the program will necessitate health care rationing. To the contrary, the savings in health care costs will allow all New Yorkers access to health care and put an end to the rationing that currently takes place in the U.S. health system: the consequence of high out-of-pocket expenses for private insurance policy holders, $33 billion; consisting of high deductibles and co-payments in 2016, $7,983 for a family of four and $4,338 for an individual (E-Health Insurance, 2017); and that serves to discourage use of health care services in the U.S. In Japan, the average person visits her/his physician 14 times annually, in contrast to the four visits per year made by the average American (“Fix It,” 2015).
Finally, critics contend that the cost of single-payer will burden taxpayers with crushing tax increases. Friedman has estimated that health care costs and related taxes will be reduced for 98 percent of all New Yorkers. He has also determined that 30 percent of the total cost of single-payer, or $91.5 billion, will need to be raised from a progressive or graduated New York Health Tax: $59 billion from payroll assessments, $32.5 billion from assessments on dividends, interest and capital gains. I’ll focus on the former to illustrate the savings that will accrue to most New Yorkers.
¯ American families currently pay an average of $13,697 per year for health care: $5,714 for insurance coverage plus deductibles and co-payments amounting to $7,983 (E-Health Insurance, 2017). Employers providing insurance pay the remainder of health insurance coverage, $13,050 (total cost of employer-provided health insurance, $18,764, Kaiser Employer Survey, 2017).
¯ The MEDIAN — half above, half below — household income in the U.S. in 2017 was $59,089.
¯ The progressive tax rate on annual earned income for New York single-payer health care, with 80 percent paid by employers and 20 percent by employees, for a household earning the U.S. median of $59,089 is determined along a multi-factor scale.
¯ Given the limited space afforded an op-ed, suffice it to say that the total annual New York health tax for such a household is $3,249.79, with the employee’s share $646.96, at a factor of 20 percent, and the employer’s, $2,599.84, at a factor of 80 percent. (As per Friedman, 2015. If you’d like to know how I arrived at these figures, just contact me.)
¯ Subtracting the employee’s tax of $649.96 from her/his total health care costs of $13,6797 results in a savings of $13,047.04; subtracting the employer’s tax of $2,599.84 from her/his health insurance cost of $13,050 results in a savings of $10,450.16.
The foregoing is a generic example; actual costs and savings will vary in accordance with income and out-of-pocket health care expenses. Overall, Friedman estimates that state health care costs will decline from $287 billion per annum to a projected $242 billion in 2019, with all resident New Yorkers covered for their health care costs. There are currently 1 million New Yorkers with no health care coverage.
On June 5, the Campaign for New York Health will conduct its annual Lobby Day in Albany. Its purpose is to generate support for the New York Health Act among those legislators who have yet to support it while thanking those who did. Our North Country contingent, representing towns from Glens Falls to Essex and to Long Lake and Raquette Lake, has appointments to meet our North Country state Sens. Betty Little, James Tedisco and Patty Ritchie to discuss their positions on the New York Health Act. Join us in this endeavor. Call Jack Carney at 518-624-4000, or email him at Jacarney4214@gmail.com for further information, or log onto the Campaign for New York’s website, www.nyhcampaign.org.
Jack Carney lives in Long Lake.