Claims that a state-run single-payer health care system would save money do not add up, according to an analysis released today by the Empire Center for Public Policy.

“The idea of having the state government take over delivery of health care in New York has been based on one very big assumption: that the state could do it for less money,” said report author Bill Hammond, the Center’s director of health policy. “Instead, it looks like the advocates are making rosy assumptions about their ability to control costs and to raise revenues. Private health plans have an important role to play in limiting spending, curbing fraud, and offering choice to consumers.”

Hammond analyzed claims made last month by Assembly Health Committee Chairman Richard Gottfried, who authored legislation to enact a state-run single-payer system and said it would reduce health-care expenditures in 2019 by $45 billion, or 16 percent. Gottfried’s statements were based on a report prepared in 2015 by a University of Massachusetts at Amherst economics professor.

Hammond raised several concerns, including:

  • Gottfried’s proposed system would require $92 billion in new state tax revenue, more than double the state’s current annual revenue of $77 billion. The top income tax rate in New York City would more than double, from 12.7 percent to 28.7 percent.
  • Funneling all health-care spending through Albany would increase opportunities for corruption and mismanagement.
  • New York would risk becoming a magnet for people from other states seeking expensive care at no cost to them.

Hammond also notes that the State has been achieving savings by moving in the opposite direction, enrolling Medicaid patients in private managed-care health plans.

The Empire Center, based in Albany, is an independent, non-profit, non-partisan think tank dedicated to promoting policies that can make New York a better place to live, work and do business.

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The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.

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