Classic cartoon characters have an entertaining knack for suspending the basic laws of physics–for example, when Wile E. Coyote propels himself in pursuit of the Road Runner through the use of a sail “pushed” by a fan strapped to his back.  So perhaps that was coyote logic at work in yesterday’s news release from the advocacy group Single Payer New York, hyping a state-sponsored Urban Institute study of options for expanding health insurance coverage in the state.  The advocates said the study showed that a government-funded health insurance program in New York would “save” $20 billion–a claim dutifully highlighted in various news accounts.

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(c) Warner Bros.

Free health insurance for all New Yorkers–and at a lower cost, too?  There’s only one way to describe this.

In fact, on closer inspection, the Urban Institute analysis suggests a single-payer plan would require the state government to assume responsibility for an additional $57 billion in health insurance now financed by employers and individual New Yorkers.  Total annual spending on health care under the new, 100 percent government-funded program would be a whopping $86.3 billion—$2.5 billion more than the current system (see chart on page 16 of this summary).   And, keep in mind, this estimate reflects optimistic assumptions about the ability of a state-run plan to save money through “lower payment rates to providers and lower administrative costs,” no doubt assisted by Giant Rubber Bands from the Acme Corp.

The study also says a single-payer plan would entail $402 million in “an unmet demand for services” — i.e., medical treatments denied through rationing, although the Urban Institute avoids using the “r” word.

A closer reading of the study reveals the universal single-payer plan would “save” money only when compared (at just the right acute angle, of course) to other “universal” coverage options, including individual health insurance mandates.

Oh, well.  It was probably too much to hope that single-payer advocates would reach the obvious conclusion.  Instead, after calling on Governor Paterson to propose a universal health care plan for New York, they’re off to Washington, DC, to lobby for a national version of the same thing–which would undoubtedly “save” even more.

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About the Author

E.J. McMahon

Edmund J. McMahon is Empire Center's founder and a senior fellow.

Read more by E.J. McMahon

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