Single-Payer Health Care In NY Could Work With Tax Hikes: Study

NEW YORK, NY — "Medicare for all" could work in the Empire State if New Yorkers are willing to pay for it. State lawmakers could feasibly set up a single-payer health care system funded by a hefty increase in taxes without driving up overall health spending, a new report concludes.

The New York State Health Foundation and the California-based RAND Corporation released an analysis Wednesday of a bill that would create a statewide universal health care system.

The proposal, dubbed the New York Health Act, would give every state resident comprehensive health care coverage without deductibles, co-pays or other costs. But paying for it would require about $139 billion in new taxes in 2022, the report says — about 156 percent more than what the state is currently expected to collect that year.

Total health care spending statewide would be 3 percent lower in 2031 than under the current system, assuming provider payment rates increase more slowly over time, the study found.

"Our analysis finds that a single-payer plan in New York does not have to increase the amount of money spent overall on health care in the state, but it would substantially change who pays for health care," Jodi Liu, a RAND associate policy researcher and the study's lead author, said in a statement.

The Health Act proposes funding the program with a new payroll tax and a separate tax on other income such as interest, dividends and capital gains. While the bill does not specify tax rates, researchers evaluated the impact of a 6 percent payroll tax for the lowest earnings bracket, 12 percent for the middle bracket and 18 percent for the highest bracket, plus similar rates for the non-payroll tax.

By paying taxes instead of premiums and out-of-pocket costs, the study found the vast majority of New Yorkers would pay an average of $2,800 less for health care under the taxation scheme researchers examined.

The richest taxpayers would bear the biggest cost. The top 5 percent of the state's earners — who would be raking in more than $1.2 million on average in 2022 — would see their health care payments increase by an average of over $50,000 per person that year, while the 5 percent below them would see an increase of about $1,700 on average, the study found.

Single-payer health care has gained momentum in recent years thanks to the likes of left-wing Sen. Bernie Sanders and his political progeny. The actress and gubernatorial candidate Cynthia Nixon got behind the New York Health Act last week in her Democratic primary campaign against Gov. Andrew Cuomo.

But there are several obstacles to implementing such a system in New York. Federal officials would have to grant waivers allowing Medicare, Medicaid and Affordable Care Act funding to be used by the single-payer system, according to the study. The Trump administration's hostility toward former President Barack Obama's landmark health law suggests such approvals would be unlikely in the near future.

Even if the bill gets through the Republican-controlled state Senate, the new taxes tied to single-payer could lead some residents and businesses to leave New York, which would potentially change the plan's financing, the study says.

Despite the study's cautions, one of the Health Act's sponsors called RAND's findings an "important validation" of the bill.

"RAND shows we can make sure every New Yorker gets the care they need and does not suffer financially to get it; save billions of dollars a year by cutting administrative costs, insurance company profit, and outrageous drug prices; and pay for it all more fairly," Assemblyman Richard Gottfried (D-Manhattan) said in a statement.

(Lead image: Photo from Shutterstock)