Pass the New York Health Act

By Alec Pruchnicki, MD

For about 30 years, progressive politicians in New York State have been advocating for the New York Health Act. It would establish a single payer state-run insurance program that would provide medical coverage for everyone in the state and eliminate the need for private insurance, Medicare, Medicaid, and virtually all out of pocket costs for the public. But why is such a program needed?

There are massive problems with healthcare in the U.S. It is incredibly expensive compared to other industrialized nations, both by costs and share of GDP. The U.S. spends about 17% of its GDP on healthcare whereas the other most industrial nations spend 12% or less. Yet U.S. healthcare outcomes are poor in virtually every medical outcome from maternal and childhood mortality to average lifespan. About 8% of Americans have no insurance and all medical costs must be borne by the individuals.

The inflated costs are due to several factors including high drug prices, high hospitalization rates, and overall administrative costs. Private insurance covers about 65% of people and so the overhead for private insurance, both profit-making and non-profit, are about an order of magnitude above public programs like Medicare and Medicaid (about 25% vs. 2-5%). Private insurance companies have administrative costs to track monthly enrollment, high compensation for upper management and stock holders, profits, advertising, and bureaucracies needed to administer prior authorizations. Not only do these costs fall on the insurance companies but also on any medical practice or facility which must interact with them.

A single payer system eliminates many of these costs. Although a national system would be the best long-term arrangement, and bills have been proposed over the years in Congress, any chance for this is minimal, at least for the next few years. Many states have tried to control costs and improve outcomes, and the New York Health Act is designed to do this. It would cover all benefits currently covered by all private insurers and public plans. This would include preventive care, in-patient care, community-based care, medications, medical equipment (glasses, hearing aids, dental work, walkers and wheelchairs) and even long-term nursing home care. It would be available at no cost to all New York residents.

Not only would enrollees save money, but they would have a greater freedom to pick their own doctors and hospitals rather than have it dictated by their insurance plan. Patients want to choose their own providers and whatever insurance plan gives the widest choice is the one most people would want. A single payer system gives the widest choice and puts the final decision in the hands of the individual.

A system this extensive is going to be expensive. It is estimated that it would have a total cost of about $40 billion. But the same estimates have projected a $60 billion saving spread throughout all aspects of the healthcare system. The $20 billion difference would allow coverage of all New York residents so that all other expenditures, which can be substantial and unpredictable, are completely eliminated. Any additional costs would be covered by a progressive tax on high income individuals (and maybe businesses) and a share of the tens of billions of dollars the federal government sends to New York every year.

We are constantly warned that anything that sounds too good to be true probably isn’t true. But we don’t have to guess about this system and hope for the best since every other industrialized country has a single payer system of some type. They have overall better medical outcomes at a significantly lower cost. They believe that it is an obligation of government to provide healthcare — not private individuals or the invisible hand of the profit driven marketplace.

Opposition to a single payer system in New York comes from several sources. Republicans have never supported the New York Health Act, or any other single payer system on the federal level. All support so far has been from Democrats. Insurance companies are opposed to this existential threat to their profits. Also, many labor unions are opposed to this approach. By obtaining medical insurance coverage through negotiations, they can justify their existence and success to their members. Also, they might be more comfortable with a medical plan that they manage and are familiar with rather that something as new as a single payer system. However, each negotiation requires some give back and over the years attacks on union-provided medical insurance have increased. The recent narrowly avoided attempt by New York City to force retirees into managed care insurance plan demonstrates this.

What can individuals do to support the New York Health Act? The Campaign for New York Health (nyhcampaign.org) organizes lobbying for this legislation and has extensive information about the act along with political action suggestions. Union members can approach, or maybe demand, that their unions support it rather than go through a life-or-death negotiation with every new contract. This will vary from union to union but if successful it would show that unions can bring about progress for the general public and not just themselves. This is how we got Medicare 60 years ago.

Many Democratic politicians support this legislation at various levels of intensity, depending on their closeness to unions involved with the issue. Mamdani supported this bill when he was in the legislature and might re-address the issue once he is mayor. Letters to the governor could also help.

There is even acknowledgement of the benefits of a single payer system by a very unexpected source. During his first term in office President Trump spoke very well of the single payer systems in other countries. He praised the Scottish system where he has one of his golf courses. He complemented the Prime Minister of Australia and admitted that they have better healthcare than we do. His clearly stated opinion was that it works in other countries and the tone of his voice made it seem that even he understood that it would work in the U.S.

You have to start somewhere while waiting for a national system, and New York is as good a place as any.