Much of the public says they want universal health care. Michael Moore made a movie about it. But no one has quite figured out how to pay for it and despite plans and plans to make plans, don’t look for anything solid on the 2008 New York legislative agenda.
Assembly Health Committee Chairman Richard Gottfried offered a proposal last week promising to cover all New Yorkers and reduce overall costs by eliminating private insurance premiums and raising taxes _ either income or business, or a combination of both.
But critics, including E.J. McMahon, director of the Empire Center for New York State Policy, point out the state raises a total of $61 billion from all taxes annually, including $36.3 billion in personal income tax. To absorb the estimated $59 billion cost of Gottfried’s plan, income tax would have to nearly triple and the total tax revenues nearly double, McMahon said. The Empire Center is part of the conservative Manhattan Institute.
Gottfried said New Yorkers pay about $63 billion a year for private health coverage, including co-payments and deductibles. He said he can provide coverage to those currently insured and the 2.5 million uninsured for $59 billion _ a $4 billion savings. But he can’t explain how much this would cost an individual or employer and can’t say exactly where the money will come from.
Gottfried’s proposal, called New York Health Plus, also suggests a surcharge on business income taxes, an idea that would receive a chilly response from the business sector. His proposal offers no specifics about how much taxes should be increased, but raises the idea as an “option.”
“I can’t imagine that this plan will go anywhere in the Legislature, I would be shocked if it did,” said David Primo, assistant professor of Political Science at The University of Rochester.
Primo said businesses would fight the proposal and that Gottfried’s plan is hurt by its lack of a clear funding concept.
Gottfried said his proposal will save about $8.5 billion in property taxes by relieving local governments and school districts of the cost of health benefits for employees and retirees.
Instead of taking insurance premiums from a paycheck, Gottfried said his proposal would deduct a smaller amount in progressive taxes _ meaning the more you make, the more you pay. He argues New Yorkers won’t care where the money is being pulled from as long as it’s less overall. If they don’t want public health coverage, they can opt out.
Gottfried, who described his funding plans as a “rough estimate,” insists the moral obligation of providing care to all is more important than determining how to pay for it.
But with a $4 billion deficit, and the state’s projected $40.7 billion spending plan for Medicaid _ the mostly state-funded program covering low-income uninsured _ how to pay for it is central to the debate.
Medicaid is an example of cost-per-person when considering the expense of extending coverage to all New Yorkers. New York spends about $7,500 per enrollee on Medicaid. Other states working toward universal coverage have redirected some of their Medicaid dollars to extend coverage to more people.
New York spends 34 percent of the state budget to care for 4.1 million people on Medicaid. Taking on another 2.5 million uninsured would be an expensive proposition _ not to mention all the people currently insured who would switch to state-funded coverage.
Even if Gottfried’s proposal makes it into the next session, it’s sure to be contested by Republicans.
After a year of fighting between Republican Senate Majority Leader Joseph Bruno and Democratic Gov. Eliot Spitzer, it’s hard to imagine an amicable resolution. Bruno supports covering more uninsured, but doesn’t want to raise taxes to do it. One of Spitzer’s campaign promises was to provide New Yorkers with universal health coverage, and he called Gottfried’s plan a “thoughtful analysis of New York’s health insurance landscape.”
Spitzer announced last week an independent policy research group will help develop a universal health plan _ a process officials expect to start in March and complete in summer 2008.
If it takes that long to develop a plan, despite the heat generated two weeks ago, it would be impossible for the governor to get it in the budget for the next session, which usually ends in June. And in an election year, legislators aren’t usually keen on sticking around Albany through the summer when they could be campaigning.
Gottfried’s proposal is remarkably different from those enacted elsewhere. Truly universal care _ in the sense that every individual is covered through one source paid for by the government _ doesn’t exist anywhere in the U.S.
Vermont created an insurance plan sold by private companies but subsidized by the state for those who can’t afford it. It’s funded by increases in the cigarette tax and a $365-per-employee annual fee imposed on businesses that don’t cover their workers. They also had a waiver from Medicaid and the State Children’s Health Insurance Plan to allow coverage for low income people who wouldn’t normally qualify _ like adults without children.
In Massachusetts, all adults must have insurance coverage or pay a penalty, unless they prove they can’t afford it. The state set aside $472 million in the state budget for the subsidized plans. The goal is to eventually phase out the so-called “free care” pool _ money paid to hospitals for treating the uninsured _ by moving people into insurance programs. Companies with 11 or more workers must offer insurance or pay annual fees of $295 per worker. The state is also using redirected Medicaid dollars through a waiver from the federal government.
When talking about universal health, experts single out Hawaii because the state grandfathered in employee insurance mandates in 1975. Employers must contribute 50 percent of the premium cost for employees who work at least 20 hours a week for four consecutive weeks.
Democratic presidential candidates have offered different health plans from requiring everyone to be insured and offering federal tax subsidies to help pay for it, to requiring only children be covered and offering subsidies to the working poor.
Republican candidates have called for refundable tax credits for individuals and families who have insurance coverage, or for making insurance and health costs tax deductible.
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