ALBANY — The proposed NY Health Act came under fire Tuesday at a conference in Albany sponsored by the Empire Center, a fiscally conservative think tank.
Opponents of single-payer insurance, funded by a payroll tax that would hit the richest hardest, tried to float several other options.
Proponents, including the Assembly Health Committee chairman who first proposed NY Health in 1992, acknowledged there’s a great deal of work ahead. If a revised version of the act is passed this year, they predicted it would take two to three years to get it started.
In addition to developing a raft of regulations to prepare for a new payroll tax and other bureaucratic matters, the state would have to recruit more doctors, particularly for underserved areas like the North Country, said Health Committee Chairman Richard Gottfried, D-Manhattan.
That’s because many people don’t go to a doctor now, thanks to high deductibles. Those patients would likely hurry in to get help, because NY Health would eliminate all co-pays and deductibles.
Opponents noted that would increase health costs, saying the system might not even be able to handle that many patients.
But Gottfried said the current system shouldn’t be kept because it’s cheaper to prevent some patients from getting health care they need.
“That’s pretty outrageous,” he said.
Fellow supporter Senate Health Committee Chairman Gustavo Rivera, D-Bronx, added, “We’re saying your wealth should not determine your health.”
The Empire Center and other analysts at the conference presented concerns that the system would cost about as much as the current system costs. Rivera said he was fine with that.
“The goal is to shift the cost,” he said.
That might push some of the richest people out of New York, one analyst warned.
Bill Hammond, director of health policy for the Empire Center, said if 50,000 of the richest people left, the state’s tax base would collapse.
It was a stark moment, as he described through graphs what would happen to the state’s taxes — used to pay for not just health care, but also schools and infrastructure.
Gottfried dismissed the argument, saying that people predict such a crash every time the state raises taxes on the upper brackets.
“It never happens,” he said. “And by the way, a good number of these people will have their savings wiped out by long-term care costs. Under the NY Health Act, that will never happen again.”
But that means the proposal will cost even more, said Sean Doolon, a lawyer for the New York State Conference of Blue Cross and Blue Shield Plans.
Regular health care would cost $139 billion a year, and long-term care would cost another $50 billion, Doolon said. That’s $189 billion for a state of 20 million people.
It averages out to $9,400 per person per year.
As Doolon put it, paying for such a plan would lead to “the biggest tax hike in history.”
It computes to a payroll tax of about 12 percent, by some analysts’ calculations.
That’s $3,600 a year on a salary of $30,000. The average family plan employee contribution is $5,218, before deductibles and co-pays, according to federal data on employer-provided plans.
The analysts did not take into consideration the positive impact to the economy from the influx of cash that low- and middle-class workers would have by reducing their health care costs. It’s likely that all those who get free health care now would be exempted from the new payroll tax, and that the tax would be lower than current costs for most middle-class workers as well.
A report from the nonpartisan research group the RAND Corporation, which started from the assumption that no one would get an exemption to the payroll tax, said that households making at least $218,000 a year would pay more than they pay now for family health care. However, after paying the payroll tax, they would see some relief in that they would have no deductible, co-pay or long-term care insurance costs.
State-funded health care has been implemented successfully in dozens of countries around the world.
But analysts said there were less costly options than the NY Health Act.
Michael Sparer of Columbia University urged legislators to consider who actually needs affordable health insurance. The working poor and those with high-deductible employer plans could be helped by allowing them to buy in to Medicaid or the Essential Plan, which are currently available only to those who make very little and have no access to an employer-provided plan. The Essential Plan fills a gap for those who make just slightly too much money for Medicaid. At most, it costs $20 a month with low co-pays.
The state could offer a subsidy for more people to buy into those programs, at much less cost than the $189 billion, he added.
“You really have the opportunity to give them a decent health program at an affordable price,” he said. “I think it provides the most plausible path to get there. You have to think: Who’s the target audience?”
Two speakers representing health insurance companies defended the current system.
Eric Linzer, president and CEO of the NY Health Plan Association, warned against letting people buy in to Medicaid or the Essential Plan. He said those making at least 400 percent of the poverty line — which is $100,400 for a family of four — should be given a subsidy to stay in the commercial market, to “stabilize the market.”
He suggested the state could also give subsidies to employers so they could lower their employees’ premiums.
Michael Capaldo, a spokesman for the NYS Association of Health Underwriters, suggested helping insurance companies cut costs rather than getting rid of the commercial insurance system altogether.
“It’s got a lot of good. It’s not worth throwing away yet,” he said.
He suggested the state require all medical claims be submitted to NY Connect. The group publishes data on all Medicaid and Medicare claims, in an effort to show true costs for procedures. The patients’ names and other identifiable information are not published.
If every claim was submitted, insurance companies would calculate the average for each doctor and facility and use the data to negotiate lower rates, he predicted.
He also said patients should be allowed to pick any doctor willing to “do the job for less money,” and that insurance companies could offer cost-sharing to give the patient some of the savings.
Gottfried said he has heard many ideas over the 27 years he’s spent advocating for better health care.
“Is there a way to get rid of the restricted doctor networks and the co-pays and the deductibles? To get administrative costs down to 2 percent?” he said. “People who say there should be a better way, I sure haven’t heard it. If there’s a better way, tell me.”
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