Albany Democrats never got the memo that there’s no such thing as a free lunch. They’re peddling a universal health-care plan they claim would not only cost nothing more, but leave the state $45 billion richer.

The plan might as well be signed by a Nigerian prince.

The seemingly magical solution is a “single-payer” law called the New York Health Act. Authored by longtime Assembly Health Chairman Richard Gottfried of Manhattan, the legislation would shift all 20 million New York residents into one health plan, operated by the state and financed by taxpayers.

AlbanyCare would cover everything for everyone — theoretically enabling people to see the highest-priced specialists, check in to the highest-tech hospitals, receive the costliest procedures. All without paying a dime in premiums, copayments or deductibles.

The new plan would seek federal permission to take over for Medicare, Medicaid, the Veterans Administration and every other existing form of coverage. Private insurance would be effectively outlawed.

Few would shed tears for the paperwork-burying, claim-denying, premium-soaring status quo — other than the tens of thousands of insurance workers put out of work.

Also much to be desired is the promise of blanket coverage for 1.3 million New Yorkers who remain uninsured, and the prospect of never again holding a bake sale for a cancer patient who has coverage but still can’t pay the astronomical bills.

But how could Albany possibly afford to absorb one-sixth of the economy? The Democrats’ answer: Single-payer would cost dramatically less than the status quo.

That far-fetched claim is based on the say-so of Gerald Friedman, an economist at the University of Massachusetts at Amherst, who wrote an analysis of Gottfried’s bill two years ago.

Friedman asserts that single-payer will save so much — mostly by eliminating insurance-related bureaucracy and squeezing deep discounts on drugs — that AlbanyCare could spend $25 billion more on medical care and other expenses and still come out $45 billion ahead.

Friedman acknowledged Albany would have to hike taxes by $92 billion — more than doubling New York’s heaviest-in-the-nation state burden — to make up for the premiums companies and their employees would no longer be paying. But he insists most New Yorkers would be better off, in large part because the new taxes on payroll and investment income would be steeply progressive, conveniently shoving most of the cost onto a wealthy minority.

Friedman is an unabashed booster of the single-payer concept. He has written similarly rosy assessments of proposed single-payer systems in other states, including one for Vermont that even the governor who was its chief sponsor ultimately rejected as fatally expensive.

Likewise, Friedman’s AlbanyCare study is seriously flawed. It relies on a high-ball estimate of administrative savings, assumes the state can get away with chopping drug prices by 37 percent and fails to account for the cost of non-New Yorkers who would flock to the state for free care.

His conclusions conflict with those reached by more sober analysts, including at the left-of-center Urban Institute, who have projected that single-payer systems would increase overall health-care spending, not reduce it. A more conservative study by the Foundation for Research on Equal Opportunity estimates that AlbanyCare would quadruple the state’s tax burden and destroy 175,000 jobs.

Yet Friedman’s too-good-to-be-true numbers were cited as gospel by Gottfried and most of his fellow Democrats in the Assembly as they voted 94-46 to pass the New York Health Act for a third year in a row.

It’s as if the House Republicans had outsourced the cost-benefit analysis of their health plan to Rush Limbaugh instead of the Congressional Budget Office.

Lest anyone dismiss last Wednesday’s vote as empty grandstanding: The bill has 30 cosponsors in the 63-member Senate, which will almost certainly rise to 31 after a special election this month. That leaves it just one vote, and one governor’s signature, shy of becoming law.

It’s true other countries with single-payer-style plans, such as Canada and the United Kingdom, provide universal coverage while spending far less than the United States does. But those systems achieve their savings by doing more than simply reducing red tape: They pay lower salaries to their doctors and nurses and restrict access to high-cost care — methods that supporters of single-payer in Albany avoid bringing up.

The reality is that no conceivable health-care system will give New Yorkers something for nothing, and Albany lawmakers should stop pretending otherwise.


About the Author

Bill Hammond

As the Empire Center’s senior fellow for health policy, Bill Hammond tracks fast-moving developments in New York’s massive health care industry, with a focus on how decisions made in Albany and Washington affect the well-being of patients, providers, taxpayers and the state’s economy.

Read more by Bill Hammond

You may also like

NY must prune its bloated Medicaid program — and focus on improving low-quality care

The coronavirus pandemic exposed a fundamental imbalance in New York’s approach to health policy: Albany spends too much money on its bloated Medicaid plan but neglects the public-health programs that used to be the Health Department’s main focus — Read More

A Corona Commission for New York

New York is finally ahead of the coronavirus, but its outbreak stands as a world-wide horror story. A sophisticated city was caught unprepared and suffered some of the worst levels of infection and death. The need for an investigation is clear. The harder question is who can credibly take the lead. Read More

New York, beware Warren’s Rx

Elizabeth Warren is an unabashed believer in wealth redistribution, so it was predictable that her Medicare for All plan would hit high-income individuals and large corporations with trillions in tax hikes. More surprising are the two other targets she chooses to soak: states that spend most heavily on Medicaid, and employers that offer the costliest health benefits. Read More

Blame Cuomo for New York’s Medicaid crisis

When it comes to New York’s latest Medicaid mess, the buck stops with Gov. Andrew Cuomo. Read More

What is ailing New York’s hospitals? They’re taking in lots of money but operating in the red

These should be boom times for New York’s hospitals, whose collective revenues have been surging by the billions for several years. Read More

Banishing Profit Is Bad for Your Health

Eliminating profit from an entire sector of the national economy would be unprecedented. But the example of New York, on a smaller scale, shows why it is a recipe for dysfunction. Read More

Single-payer health care could cost some hospitals

The debate about a proposed single-payer health plan for New York State has mostly focused on its potential cost. But far less attention has been paid to the radical impact it may have on hospitals and physicians across the state. Read More

How single-payer would disrupt NY’s hospitals

At stake is not only the quality of care for 20 million New Yorkers, but also the fate of a fifth of the economy and the livelihoods of 1.2 million health workers. Read More