Checking In On New York’s (Health Care) State Of Mind

Empire State progressives are giddy about the prospect of passing a single-payer health care bill in 2019.

Every year for the past four years, the liberal State Assembly has approved the New York Health Act, which would establish a statewide single-payer plan. But the bill always died in the State Senate, where Republicans have held the majority since 2011. These Republicans united with the centrist members of the Independent Democratic Conference to oppose single-payer.

Most of those Independent Democrats, as well as a handful of Republicans, lost their elections to progressive challengers in 2018. So when the new Democratic majority is sworn in this January, there may be enough single-payer proponents to radically reform New York’s health care system. State Senator Gustavo Rivera, a Bronx Democrat, has pledged to put forward a new single-payer bill in January. Assembly Member Richard Gottfried, a Democrat from Manhattan, confidently predicted the legislature is “on track” to pass the proposal.

Gov. Andrew Cuomo has been skeptical of statewide single-payer in the past — he’d prefer to pursue such reforms at the federal level. But he’s also rumored to have presidential ambitions — and vetoing a single-payer bill would be political suicide. If Gov. Cuomo does reluctantly sign a single-payer bill, New Yorkers will face crushing taxes and long waits for care.

It’s understandable why so many New Yorkers have fallen for the siren-song of single-payer. The sales pitch is deceptively simple: When people need health care, they can just get it. No premiums, no deductibles, no copays. The government pays for the entire system out of tax revenue.

Disastrous Costs

But in practice, statewide single-payer would prove disastrous. Consider the cost alone. Implementing the New York Health Act would require $139 billion a year in additional tax revenue by 2022, according to a RAND study. That tab grows to $159 billion if the single-payer system also covers long-term care.

For reference, the entire New York state budget totaled $168 billion this year.

Such crushing levies would send New York’s economy into a death spiral. Wall Street won’t sit idly by as Albany politicians bleed it dry. Banks and hedge funds, which already account for an outsized share of New York’s tax revenue, would head to Connecticut or New Jersey — or even to Florida, North Carolina, Texas, and other banking-heavy states with more favorable business climates.

Even these crippling tax hikes might not be enough to fund single-payer. The RAND study assumes that New York would receive a waiver to redirect its share of federal Medicare and Medicaid dollars to the new system. It’s almost inconceivable that the Trump administration would grant such a waiver.

Single-payer would also be enormously disruptive. It would outlaw private insurance — including the employer-sponsored plans that roughly half of Americans get through their jobs. All New Yorkers would be herded into the new one-size-fits-all plan, regardless of whether they like their current coverage.

Worsening Coverage

Even New York’s public-sector unions — which are hardly bastions of free-market conservatism — fear single-payer could prove too disruptive. They’re concerned the bill would offer worse coverage than their members currently receive through the commercial insurance market.

The combination of tax hikes and massive upheaval explain why several blue states have rejected single-payer. Vermont abandoned its efforts to create a single-payer plan in 2014 after concluding it would destroy the economy. Colorado voters rejected a single-payer ballot referendum in 2016 by an 80-20 margin.

In California, the State Senate passed a single-payer bill SB 562 — in June 2017. But Democratic Assembly Speaker Anthony Rendon shelved it out of concern about its $400 billion price tag — more than double the state budget. If the Senate and Assembly do pass the bill this year, it will be interesting to see whether incoming Governor Gavin Newsom, who publicly favors single-payer, will sign it.

Single-Payer Suffering

Patients suffer immensely in single-payer systems. In the United Kingdom, the government-run National Health Service rations care to control costs. In September, more than 4 million patients were waiting to receive routine treatments — a 60% increase from 2011. More than 3,000 Britons had to wait more than a year.

Canadian patients fare poorly too. Specialists report a median wait time of 19.8 weeks before they can treat patients referred by primary care physicians, according to a new report from the Fraser Institute. In 1993, the wait time was just 9.3 weeks.

Wait times are far longer in some specialties. Patients wait nearly 15 weeks just to get initial appointments with orthopedic specialists after receiving referrals from general practitioners. Another 24 weeks generally lapse before the surgeries take place.

Such lengthy wait times are unimaginable in New York. Currently, it takes an average of just 10 days for New York City residents to schedule an appointment with an orthopedic specialist, according to an analysis by Merritt Hawkins.

Single-payer would be a disaster for New York. Let’s hope Gov. Cuomo learns from the failures of Vermont, the United Kingdom, and Canada and rejects any single-payer proposals that reach his desk.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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