NY Single-payer Health Care Would Be Hazardous to Taxpayers’ Health

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Posted by Lauren Wagner on Thursday, August 2nd, 2018, 9:14 AM PERMALINK

Finally, New York has a plan to enact a single-payer health system that will actually save money! Sounds too good to be true, right? That’s because it is, regardless of what its proponents are saying.

The headlines about a new RAND Corp. report read, “Study finds New York state’s proposed single-payer system financially feasible” and “Single-payer plan in New York could cover all without increasing spending”. As encouraging as these titles sound, the reality will make you feel sick.

In reality, single-payer in New York would more than double the state tax burden, and cost all the federal tax dollars that go into New York for public health care related spending (Medicaid, Medicare, and Obamacare related credits). All that federal spending would have to be devoted instead to single payer.

The act calls for $139 billion in new state tax revenue, 156 percent more than New York currently collects from all of its citizens.

Even for New York the added layers of taxes are shocking. The report estimates massive new income and payroll taxes on nearly everyone - including rates of over 12 percent for decidedly middle-class households making $27,501 to $141,200.

The plan is so expensive and reliant on new tax revenues that even if a few high earning taxpayers and businesses leave the state (a predictable outcome) it could collapse.

It would hammer low-income New Yorkers. Under the predicted tax schedule by RAND, roughly 700,000 low-income individuals would actually end up paying more “because their taxes would increase without the concurrent benefit of lower health care costs.”

And these are the rosy scenarios…RAND researchers noted their model is still, “highly uncertain and [depends] on providers’ bargaining power, the state’s ability to administer the plan efficiently, and the federal government’s willingness to grant waivers to the state.”

That’s right, “the state’s ability to administer the plan efficiently.”  Don’t bet your life on it.

Empire Center’s Bill Hammond took the report to task for the reliance on assumptions that are unlikely to all pan out:

“Each of these assumptions is uncertain at best. The chances that all four would bear out completely must be considered a long shot. Yet that was the basis of RAND’s findings that costs would not mushroom and that a $139 billion tax hike would be roughly sufficient to finance the system.”

Prior reports suggested added tax revenue of $90-$100 billion could cover single payer in the state, now it is becoming even more clear that $139 billion in revenues would not be enough. Single payer in New York would be an obvious disaster, sold at taxpayer expense with scenarios that don’t stand the reality test.

Photo Credit: Pat Arnow

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