June 20, 2019 | Updates

Experts Warn: Costs Of One-Size-Fits-All System In N.Y. ‘Would Be Exorbitant’

WASHINGTON – As the push for a national one-size-fits-all government-run health care system “falters” in the U.S. Congress, a proposed state-level Medicare for all system in New York is also earning bipartisan criticism over concerns about its high costs and elimination of patient choice and control.  Newsday reports that the proposed state-level one-size-fits-all system “would lead to higher taxes and deep revenue cuts at area hospitals, experts said” at a meeting of the Long Island Association:

Critics of the legislation on the panel said the cost of the new plan would be exorbitant, especially if the state used Medicare rates to make payments to providers.  “Ninety-three hospitals would lose more than 10 percent of revenue,” said Bill Hammond, director of health policy at the Empire Center for Public Policy, a fiscally conservative  Albany think tank.  “Three-quarters of hospitals would lose money.  It would have a ripple effect through the economy,” Hammond added.  A study last year by the RAND Corp., a nonprofit analytical think tank, concluded that a single-payer system would force New York to raise another $139 billion in state tax revenue to cover the program for 2022, the year it modeled.

When it comes to its enormous costs, “[t]he bill doesn’t have a specific funding plan.  But it calls for higher capital-gains taxes and a new payroll tax,” The Wall Street Journal reports.  The need for massive tax hikes on working New Yorkers under a government-run system has sparked criticism from both sides of the aisle.

Discussing the legislation in an interview with The Atlantic earlier this year, Democratic Governor Andrew Cuomowarned that “no sane person will pass it,” and “you’d double everybody’s taxes” to pay for it.

A recent hearing in the state legislature also exposed serious bipartisan concerns with the proposal’s high costs and the massive tax increases needed to bankroll it.  As the Albany Times Union reports, many “are worried about the unpredictability and unknowns associated with upending an entire health care system, not to mention the idea of entrusting such an important system with the state government.”  They continue:

Lawmakers on both sides of the issue appeared particularly concerned about any possible effect on retirees, who fear they may lose hard-fought benefits obtained through years and sometimes decades of union negotiations … “These are things we fought for and we’re not about to give them up,” said Peter Meringolo, chair of the NYS Public Employee Conference, an organization with 82 member unions.”

As The Wall Street Journal reports, others pointed out in the hearing that “more than 95% of New Yorkers have health insurance …  [and] said it would be more feasible and a better investment of resources to target the estimated one million New Yorkers who now lack coverage, and questioned the cost of the plan.”

In Massachusetts, a similar state-level proposal is drawing the same criticisms.  The Boston Globe reports that the state-level “so-called Medicare for All legislation would raise taxes and eliminate private health insurance while putting the state in charge of all payments to doctors and hospitals,” and “calls for a series of payroll and capital gains tax hikes, to generate an estimated $15 billion to $20 billion a year.  For a middle-class family, that could be an additional $15,000 in taxes per year,” according to the bill’s author. “The controversial measure is unlikely to become law anytime soon,” The Globe notes.

Serving as a cautionary tale to lawmakers in Albany, Boston and other state capitals, high costs and unaffordable tax hikes have doomed similar plans to implement single-payer health care on the state level.  The New York Times editorial board noted recently that “[i]n Vermont and Colorado, legislators dropped bids for a state-run single-payer system when it became clear that people would not support the tax increases needed to sustain such a program.

And Roll Call reported that Peter Shumlin, Vermont’s Democratic former governor, who campaigned on a platform of single-payer health care, later admitted that the 11.5 percent payroll tax and 9.5 percent income tax that were proposed to finance the system were too much for taxpayers to accept: “The final bill was too much for the state to bear, he said.  ‘The biggest problem was money,’ Shumlin said …  And he couldn’t promise lawmakers that they wouldn’t need to hike taxes again later to accommodate rising health care costs.  ‘I couldn’t with a straight face turn to them and say, no, we’ve got this figured out,’ he said.”

National leaders should also take note of these state-level failures.  The Washington Post reported recently that the failed attempt to implement a costly single-payer system in Vermont “offers sobering lessons for the current crop of Democrats running for president, including Vermont’s own Sen. Bernie Sanders (I), most of whom embrace Medicare-for-all,” adding: “Then as now, many of the advocates shared ‘a belief that borders on the theological’ that such a system would save money, as one analyst put it – even though no one knew what it would cost when it passed in Vermont.  That belief would prove naive.”

Meanwhile, new government insurance systems – including so-called “moderate” proposals, such as “buy-in” or “public option” – are intended to be stepping stones to a one-size-fits-all system, and would expand the already at-risk Medicare program.  As the debate over America’s health care future continues, expect to hear more about these proposals’ harmful impacts on patients and taxpayers – who would be forced to pay more to wait longer for lower-quality care.



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