Stopping the Health Care Bleeding in NY


What’s to be done about skyrocketing health care costs and the growing number of New Yorkers without health insurance? Two new op-ed pieces by Manhattan Institute senior fellows suggest an answer to that question.

In today’s New York Post, Prof. Regina Herzlinger of Harvard Business School challenges the view that the solution lies in more government intervention. As things now stand, she notes,

…government-controlled health insurance is so expensive that nearly 40 percent of New York’s non-elderly uninsured are middle-class families, with annual incomes at least double the poverty level. The uninsured rate is well above the national average in the state’s wealthiest region — New York City and its suburbs.Why can poor people afford to buy cars while middle-class people can’t afford to buy health insurance?

Her answer: the auto industry is consumer-driven, responding to the same market forces that could shape a better, less expensive forms of health insurance.

E.J. McMahon reaches a similar conclusion his Syracuse Post Standard piece. Government, he points out, is a big part of the problem.

For example, the tax burden on health insurance sold in New York has been steadily increasing … In 2005-06, the state will collect roughly $2.1 billion in taxes and assessments from private health plans. In fact, private health insurance plans now rank as the Empire State’s third largest source of non-federal revenue, behind the personal income and sales and use taxes. It’s axiomatic, of course, that when you tax some thing more, you get less of it — at a higher price.A second big problem is the state’s insistence on requiring all health insurance policies to cover a large array of treatments, conditions and providers. New York imposes 43 health insurance mandates — among the most of any state and well above the national average.

The issue will be explored in more detail by Prof. Herzlinger and other speakers at the Empire Center’s health policy forum at the State Capitol in Albany on Thursday, May 26.