June 19 , 2019
Single-Payer Plan? It's Not The Only, Or Best, Way To Improve New York's Health
By Barbara Caress
The New York State Legislature expects to wrap up its regular annual session today. Left on the cutting room floor: Assemblyman Richard Gottfried’s proposed NY Health Act, designed to create a single-payer State-administered health insurance system. It’s a bill that has been introduced in one form or other since 1992, has been passed several times in the Assembly, but has not yet come up for a vote in the Senate. Without it, can New York City and State do anything to improve access to affordable health insurance? Answer: Yes, a lot, by paying attention to reforms that are both bold and more careful in reforming health care than the NY Health Act would be.
First, a brief review of the facts: After full implementation of the federal Affordable Care Act (ACA), there are still about one million people without any health coverage living in the state, including about 615,000 in New York City. While some are not insured because they are undocumented, a number simply can’t afford insurance premiums. Some 52 percent of New York State residents recently surveyed by the Community Service Society, including both the insured and uninsured, said they had serious problems paying for health care. Rising insurance premiums and increasing out-of-pocket payment requirements continue to make this problem worse. Add to this the Trump administration’s threat to make life very, very difficult for immigrants who, for themselves or their citizen children, use Medicaid or Child Health Plus (CHIP) insurance, and you have the makings of a catastrophe.
Gottfried and dozens of co-sponsors have offered a solution. The NY Health Act envisions a universal entitlement to all types of health services without regard to income, and possibly immigration status, paid for by a combination of new progressive taxes and the capture of Federal dollars that currently help finance Medicare, Medicaid, CHIP, and the ACA.
Their bill is, however, virtually silent about how the State will raise the estimated $159 billion needed in new local taxes, or how it will implement and administer a brand-new single-payer plan. In a bill that proposes forcing some 70 percent of New Yorkers who currently have private health insurance or Medicare coverage into the uncharted waters of a new State-run plan, the missing pieces describing what would be a profoundly disruptive and expense process are almost greater than the sum of promises made.
But there are alternatives. New York can learn from other states and localities, which have instituted or are enacting promising and more easily realized solutions to the related problems of health insurance affordability and astronomical health care costs. For example:
New Jersey has enacted several reforms expected to reduce the cost of an average ACA premium by 22 percent. They include an individual mandate replacing the one originally part of the ACA but repealed by Congress in 2017. It is backed by a 2.5 percent State income tax penalty.
Making use of another ACA provision, New Jersey also received a federal commitment of $180 million in 2019 to backstop an estimated $338 million in claims made on behalf of very sick, high-cost people. State taxes will make up the rest of those claim costs. Actuaries estimate that the combination of recent New Jersey health reforms will help pay for the care of the 330,000 residents enrolled in the state’s ACA marketplace plan.
Minnesota, Oregon, and Wisconsin have also instituted federally assisted reinsurance to soak up extremely large claims and keep premiums more reasonable.
California and Washington State’s legislatures are considering plans to use State dollars to increase ACA subsidies to low- and moderate-income families and make them available to immigrant families currently excluded from Medicaid and the ACA.
Illinois has enacted the nation’s most comprehensive mental health parity law. Most importantly, it allows patients to get prescribed mental health and substance abuse treatments and drugs without requiring that they first prove medical necessity. In New York, a similar measure would benefit not only the insured but an estimated 230,000 uninsured residents – roughly one-fourth of the state’s uninsured population – who suffer from serious mental illness.
Since 2002, “Healthy San Francisco,” a program funded by substantial assessments on businesses that provide no employee health insurance, has offered enrollment in a comprehensive provider network to working-class residents also left out of Medicaid, Medicare, or ACA coverage. Council Speaker Corey Johnson has shown interest in developing an analogous system in New York City.
And to contain health care costs New York should consider what Washington State has done with legislation creating a “virtual” public option for its ACA marketplace. The State will organize and sponsor the public plan, but will contract with private companies to sell and administer it. It will limit out-of-pocket obligations by holding down payments to doctors, hospitals, labs, and equipment makers. It set maximum reimbursement rates to them at no more than 160 percent of Medicare payments. (By way of comparison, private insurance pays, on average, twice what Medicare pays.)
New York actually has a history of similarly audacious and successful health care reforms. To cite just one example: State control of all hospital payment rates (Medicare, Medicaid, and private insurance) between 1983 and 1996 regulated a huge part of hospital and insurance priorities and policies. It very effectively controlled costs – and although it was wrong-headedly set aside by then-Governor George Pataki, a measure like it is now being considered in California.
Unfortunately, the NY Health Act is crashingly silent on the subject of cost-containment – a symptom of a too-simplistic analysis of what ails health care. Like its Medicare-for-all cousins at the national level, the NY Health Act is premised on the idea that the root of most health system problems is greedy, profit-driven insurance companies. It’s an apt characterization but not the right diagnosis. While insurance companies have far too much influence in the health system, they aren't the main reason our system is so expensive and fails to meet the health care needs of so many people. That is the fault of a system jerry-built to maximize its own power.
No question about it, making health care more affordable and accessible is crucial. It’s a puzzle with a lot of pieces and a lot of possible solutions – not just one.