With the Obamacare debate still raging on Capitol Hill, two leading health care experts had a debate of their own, over the creation of a single-payer system here in New York.
Assemblyman Richard Gottfried, who has been chairman of the Assembly Health Committee since 1987 and is one of the leading health care policymakers in the nation, has been pushing the idea for years.
But Bill Hammond of the Empire Center for Public Policy, who has written extensively about health care, is skeptical it would work as advertised.
Both joined the New York Slant podcast to explain what exactly we mean when we say “single-payer,” the cost of such a system and what it would mean to set one up without the blessing of the federal government. The discussion has been edited for length and clarity. You can listen to it in full here.
C&S: Assemblyman Gottfried, your health care bill has passed the Assembly four times. What would it do?
RG: It’s a single-payer system. The New York Health Act would eliminate insurance companies and their ever-rising premiums, and deductibles, and copays and restricted provider networks. It would replace them and absorb the Medicare and the Medicaid programs into a single, universal, comprehensive, complete health coverage (system) for every New Yorker. There would be no restricted provider network; any doctor or hospital would be free to participate. There would be no user charges, no deductible, no copays. The funding would be by a broad-based, progressively graduated tax, that’s to say, based on ability to pay.
That tax would be levied on payroll income and it would also be levied on taxable unearned income like dividends and capital gains. New Yorkers would contribute based on ability to pay because, today, insurance companies want the same premium. They want to impose the same deductible whether you are a multimillion-dollar executive, or the janitor, or the receptionist in the office. So you would no longer have people going without coverage. You would no longer have people going with coverage that is really not worth anything to them because they have to spend thousands of dollars on care before they reach the deductible. You would no longer have insurance companies telling you what doctor or hospital you can go to. And funding based on a household’s ability to pay, which means almost every New Yorker would be paying substantially less than we now pay with premiums and out-of-pocket spending.
C&S: Bill has argued that this plan will cost too much. How much would we have to raise taxes to pay for your bill?
RG: Well, New Yorkers by our estimates would be spending about $45 billion a year less than what we’re currently spending on premiums to insurance companies and out-of-pocket costs. We would all be paying a tax to the state based on ability to pay. That tax would be around $90 billion because there are a variety of other revenue sources that would be going into the system. If someone told me I could pay $100 to an insurance company or $85 to a single-payer system, I’ll pay the $85 and keep the $15 in my pocket.
C&S: And Bill, what do you think of this?
BH: As he was describing his bill I found myself saying that’s right, that’s right. I was agreeing with every point until he got to the part about how much it was going to cost and how it was going to save money. I just don’t think that’s plausible. I’m not here to say single-payer systems don’t work. They obviously do work. Other countries have them. Although it shouldn’t be confused with universal coverage. Universal coverage means everybody has coverage. Single payer means there is only one health plan basically … but the question is not whether single coverage is a good idea. The question is whether this particular piece of legislation is a viable, workable thing for New York state, and I don’t think it is.
It starts with this idea that you can cover everybody – take away all the copays and network restrictions and deductibles – and allow people to see any provider they want in the state and it’s going to save money. It just doesn’t pass the smell test. I think if you look at it realistically, you’re going to dramatically increase costs. And that $92 billion tax increase – which by the way would more than double our total taxes in the state – that tax increase could be substantially more than that. I’ve seen estimates that may be triple that.
C&S: In lieu of going all the way toward a single-payer system, is there a way to strengthen the exchange system that the state has now without federal action?
RG: We could pump more state dollars into insurance subsidies. I don't think that would help bring costs down. There is an old Chinese expression saying you cannot carve rotten wood. There is a limit to how much you can do with a system that is rooted in insurance companies.
BH: I think the most effective solutions are nationwide solutions. But if there were a way for the state to strengthen the personal mandate so there are fewer people who are taking the risk but are not going to get sick; they’re paying a very modest penalty right now. Then when they do get sick they become a burden on the public system. Either they are getting charity care from a hospital, which taxpayers ultimately partially reimburse, or they become impoverished and go on Medicaid. So I would favor a system that demands people take responsibility for their own health care financial responsibilities based on their ability to pay to some extent.
C&S: Bill, if the Republicans successfully repeal Obamacare, would you reconsider your opposition to the assemblyman's bill?
BH: No. If we go through with the New York Health Act and the state is the health plan for everybody, it ends up being a majority of what the state spends. And what is that going to do to all the other priorities that we have as a state? If we want to improve the schools and fix the infrastructure, that requires resources. Meanwhile we’re going to have a health plan that is chronically running deficits because that's what health care is in this country. It’s continually growing with constant shortfalls in funding. You see it in the Medicaid system. You see it in the Medicare system. Suddenly everybody’s health care depends on the state having enough money. They would inevitably have to raise taxes and they would certainly be more than double what they are now and they would probably continue going up in the future. And they would have to cannibalize the rest of state government. I just think it deserves, at the very least, a serious thoughtful analysis beyond what it’s received so far.
RG: The financing for the New York Health Act would be completely separate from the rest of the state treasury. A completely separate tax and trust fund. Neither would crowd out the other. Whatever happens in Washington, unless there is a complete breakdown of the Trump administration, we are going to see billions of dollars ripped out of health care. The only way New York has a prayer of surviving and filling those gaps is with the savings that can come from eliminating the administrative costs of the insurance industry.
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