screen-shot-2018-03-23-at-5-29-43-pm-300x183-4062154As Albany lawmakers consider imposing costly new taxes and mandates on health insurance, a report from the New York State Health Foundation offers a timely reminder: The state’s premiums are already among the highest in the country, and rising fast.

The foundation’s “data snapshot” analyzes cost trends in the state’s employer-provided insurance market, which is where 56 percent of New Yorkers get their coverage. Among its key points:

  • The state’s average family premium in 2016 was the third highest in the country at $19,375. Its average single premium was fifth highest at $6,614.
  • From 2008 through 2016, premiums for employer-sponsored plans increased at more than double the rate of the median household income.
  • New York’s deductibles, which had been relatively low, leapfrogged the national average in 2016, when the average jumped 36 percent (from $1,317 to $1,789) in a single year

These findings dovetail with a December 2017 report by the United Hospital Fund, which documented a 35 percent drop in New York’s small-group enrollment, from 1.7 million to 1.1 million, over the past decade. This trend, it warned, was “likely exacerbated by rising premiums.” It also makes the goal of universal coverage that much harder to reach.

Rather than trying to solve these problems, Governor Cuomo and the Legislature are debating steps that could only make them worse.

Cuomo is proposing two additional taxes on health carea 14 percent surcharge on the underwriting gains of for-profit insurance companies, and a 2 cents-per-milligram tax on prescription opioids. Directly or indirectly, both would inevitably push insurance rates higher.

The governor further aims to seize billions in proceeds from the planned takeover of the non-profit Fidelis Cares health plan by the for-profit insurance company Centene. He would put part of the money into a health care “shortfall fund” to be used in case of future revenue losses—a tacit acknowledgement that the state does not need the funds as of now.

All of these measures would be piled on top of $4 billion-plus in health insurance taxes imposed through the Health Care Reform Actwhich are the state’s third largest source of revenue.

This push for additional health taxes is predicated on the idea that New York’s health funding is under attack in Washington. But none of the threatened cuts has actually become law, and Congress’ most recent votes have restored or continued billions in aid that otherwise would have lapsed.

As a result, New York’s already generous level of federal health aid is rising, not falling. The state’s Essential Plan, which covers low-income New Yorkers, is projected to run a hefty surplus, which Cuomo is using to plug holes elsewhere in his budget.

Another premium-boosting provision in the governor’s budget calls for the state Department of Financial Services to study whether insurers should be required to pay for in vitro fertilization. That would be a particularly expensive addition to Albany’s long list of coverage mandates.

While Republican leaders in Congress are still contemplating cuts to Medicaid and other programs, that crisis remains theoretical for the time being.

The affordability crisis is quite real, as the Health Foundation’s analysis confirms. Legislators should keep that in mind as they rush to their budget deadline.

About the Author

Bill Hammond

As the Empire Center’s director of 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

Hospitalization rising in some areas

Coronavirus hospitalizations are surging in parts of upstate, including three regions that the Cuomo administration authorized to begin reopening today. Read More

Uneven ‘relief’ for NY providers

A review of federal emergency payments to New York health-care providers reveals a striking disparity: Four of Manhattan's most prosperous private hospitals collected more individually than the 11 city-owned hospitals combined. Read More

Essential Plan surplus hits $3B

As Governor Cuomo pleads for financial help from Washington, one of his state's programs is sitting on $3 billion in unspent federal aid: the Essential Plan. Read More

A grim toll gets worse

The full toll of the coronavirus pandemic in New York is likely thousands higher than the official death tallies, according to newly released federal data. Read More

More fiscal turmoil for Medicaid

In a sign of pandemic-related strain on state finances, the Cuomo administration is postponing a series of multi-billion-dollar Medicaid payments over the next three months. Read More

Upstate escapes the worst

With the coronavirus pandemic hitting some parts of New York much harder than others, Governor Cuomo has signaled that he will begin to relax shutdown restrictions in low-virus parts of the state. Here's a closer look at how infection and fatality rates vary from region to region. Read More

NY outlook: worse than 2008-09

#NYcoronavirus: The outlook for New York's economy is the grimmest on record, according to the first post-pandemic lockdown round of credible economic surveys and forecasts. Start with the Federal Reserve Bank of New York, whose regional economists today issued a notably pessimistic report based on their monthly Empire State Manufacturing Survey and a broader Business Leaders Survey that take sin the northern New Jersey and metropolitan New York. Read More

Another Medicaid payment delay

State Medicaid spending dropped to nearly zero in March as the Cuomo administration again delayed payments to balance the state's books. Comptroller Tom DiNapoli's cash report for March, posted on Wednesday, showed just $9.2 million in Medicaid disbursements. The state's share of Medicaid spending averages almost $2 billion per month. The comptroller's numbers reflect so-called Department of Health Medicaid, which covers the bulk of the program but excludes most spending on recipients with mental disabilities. Read More

Subscribe

Sign up to receive updates about Empire Center research, news and events in your email.

CONTACT INFORMATION

Empire Center for Public Policy
30 South Pearl St.
Suite 1210
Albany, NY 12207

Phone: 518-434-3100
Fax: 518-434-3130
E-Mail: info@empirecenter.org

About

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.