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Myths and Realities about the NY Health Act

The NY Health Act would radically transform the State’s entire healthcare system. With more than 95% of New Yorkers currently insured, creating a government-run system would result in massive disruptions for New York patients, with longer wait times for treatment and no guarantee that they could see the doctor or specialist of their choice. A recent study by the RAND Corporationexamining the NY Health Act single payer proposal concluded such a system could result in savings from 1-3%, but would also require new taxes totaling $139 billion (rising to $210 billion by year 10). Both the feasibility of the NY Health Act and the accuracy of projected savings and costs are based on a number of assumptions that even the RAND report called “highly uncertain.” Even “highly uncertain” appears to be overly optimistic as the MYTHs of single payer continue to mask the REALITIES of adopting such a program in New York.

REALITY:

Advocates claim it will not cost New Yorkers more to cover all individuals under the NY Health Act, but massive State tax increases would be needed to pay for health care costs of a government-run, single payer system. RAND estimates the State would immediately need to raise taxes by $139 Billion each year – a 156% increase in what the State currently collects in taxes. That would quickly rise to $210 Billion each year by 2031. These tax increases would be: (i) on top of the $82 Billion already spent on health care; (ii) are based on a number of ambitious, if not unrealistic, savings assumptions; (iii) fail to include the cost of long term care expenses, one of the highest costing components of the health care system.

REALITY:

The savings from a government-run system would come from “administrative efficiencies” and reducing the reimbursement rates the state pays doctors, hospitals, drug makers and other providers. It is hard to imagine state government running the health care system more efficiently than a highly regulated private sector. Moreover, hospitals today rely on increased private sector health insurance payments to subsidize inadequate payments from the state for Medicaid. Reducing, or even eliminating those subsidies will place financial constraints on hospitals forcing many of them to reduce services and, as noted by the RAND study, force many physicians to move out of New York.

REALITY:

While the NY Health Act would eliminate out-of-pocket costs for healthcare, the money needed to finance a government-run system would require massive new taxes. The single payer system would be funded through a premium payroll tax paid by employers and their workers, and other taxes on New Yorkers. As the NY Health Act would impose new payroll taxes, it would reduce individuals’ take-home pay, leaving less money in the pockets of New Yorkers.

REALITY:

The NY Health Act’s supporting economist estimates that New York will lose 150,000 jobs if the bill is implemented, approaching the job losses experienced during the Great Recession.

REALITY:

By creating a government-run system, the NY Health Act would eliminate Medicare as it exists today for seniors in New York by lumping them into a larger healthcare program run by the State. Individuals currently covered by Medicare would lose their Medicare coverage.

REALITY:

The RAND study says the NY Health Act would result in increased healthcare “congestion,” such as “long wait time for appointments or providers not accepting new patients.”

REALITY:

According to the RAND study, the NY Health Act would create an increase in demand for healthcare that will not be  met. In fact, RAND concluded  that only about half of new patient demand would actually be met.  The study also shows that a single payer system can cause long waits for appointments, providers not taking new patients, and “changes in providers’ recommendations regarding courses of treatment or constraints on technology and equipment.”

REALITY:

Today, more than half of all New Yorkers receive coverage through their employer. These individuals would lose their coverage under a government-run system, taking away the ability of employers to effectively manage their healthcare costs while still be subjected to massive tax increases. Since many large businesses and government employers collectively bargain their health benefits with organized labor, these union members would lose their right to negotiate benefits with large employers and state and local government.

REALITY:

Implementation of the NY Health Act is contingent on the State receiving waivers from the federal government to both revise the State’s current Medicaid wavier and include Medicare beneficiaries in the new system. The head of the federal Centers for Medicare and Medicaid Services has said the agency would deny waiver applications from states seeking to implement their own single payer system. It is almost certain that all of this could not be accomplished within two years of passage of the NY Health Act.

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