This bill would create a state single payer health care plan for all New Yorkers.
Under a state single payer health care program (similar to expanded and improved Medicare for all), every New Yorker would receive quality health care and be able to choose their medical provider. Benefits would include medically necessary health services including preventive and primary care, hospital care, dental, eye care, prescription drugs, mental health, treatment for drug and alcohol addictions, and rehabilitative care. Coverage would be extended to residents of New York State without regard to age, income, health or employment status;
There would be no out-of-pocket charges for individuals - no co-pays, deductibles or premiums. Payment for provider services would be on the basis of global budgets for hospitals and other institutional providers, individual practitioners would be able to choose fee-for-service, capitation or be salaried by a global budget institution. Administration of the plan, as an independent public benefit corporation, would be by an 18-member Board of Governors, appointed by the Governor and confirmed by the Senate. The Board would be representative of consumers and providers of health care services, as well as labor and business.
The US spends more than twice as much on health care as the average of other developed nations, all of which boast universal coverage and deliver better quality of care. Yet an estimated 2.6 million New Yorkers (5.5 million over a year period) have no insurance and many others are underinsured, in the sense that they lack adequate coverage for all contingencies (e.g., long-term care and prescription drug costs). A recent study by the NY Health Foundation found that the percentage of New York state residents who get health insurance through their jobs has dropped considerably, from 69 percent in 2003 to 58 percent in 2009; this is considerably below the national average of 65% of workers.
The reason we spend more and get less than the rest of the world is because we have a patchwork system of for-profit payers. Private insurers necessarily waste health dollars on things that have nothing to do with care: overhead, underwriting, billing, sales and marketing departments as well as huge profits and exorbitant executive pay. Doctors and hospitals must maintain costly administrative staffs to deal with the bureaucracy. Combined, this needless administration consumes one-third (31 percent) of Americans’ health dollars. Nationally, streamlining payment through a single nonprofit payer would save more than $400 billion per year, enough to provide comprehensive, high-quality coverage for all Americans.
Unfortunately, the recent national health insurance mandate actually expands the role of this wasteful insurance bureaucracy, yet leaves tens of millions without any insurance and forces far more Americans to buy ineffective, incomplete coverage that many can not afford. Costs will continue to skyrocket and be unsustainable. Bankruptcies for high medical bills will continue to rise.
The New York Health Plan achieves savings through the consolidation of health care expenditures under a single, publicly financed, insurance program. Such a program could eliminate more than $10 billion in administrative waste, including excess insurance company administration and costs of billing and collecting for hospitals, physicians and other health care providers. It also provides stability to New York’s hospitals, freeing up resources for patient care.
Two years ago, the State Legislature appropriated funds for a state-sponsored cost benefit analysis of the various ways New York could provide health care to all its residents. The Governor's report concluded that single payer was the most effective while providing comprehensive quality health care. A single payer system would reduce health spending by $20 billion annually by 2019 below projected levels. It would save $28 billion annually compared to the insurance mandate package passed by Congress.
In adopting a state single payer plan, New York would be following the path being pursued in other states such as Vermont and California to develop universal health care alternatives to the recent federal legislation. New York would need to apply for a waiver of certain provisions of the federal Affordable Care Act (ACA). A waiver is allowed to a state to some, but not all, provisions of the ACA as long as they meet the goals of the law in terms of expanding coverage and other important standards. Federal legislation is pending to accelerate the date of such waivers from 2017 to 2014, the date when most of the federal law would be implemented.
In recently passing a state universal health care program, Vermont concluded that a state single payer plan would not require a waiver to the federal ERISA program. Vermont's position is that a state can raise revenue for a public good without violating ERISA, which restricts states from regulating employer benefit plans. Other observers feel ERISA may present some legal issues. (For a summary of ERISA issues, see www.academyhealth.org/files/publications/SCI_EmpFinancing.pdf and www.centerforpolicyanalysis.org/wp-content/uploads/erisaprovisionsssp3-10.doc)
Empire State Health
Draft Legislation to be introduced by Assembly Health Committee Chair
This is a single payer bill that will create a state-run public plan, Empire State Health, in the Department of Health to provide universal comprehensive coverage for all New Yorkers. (Long-term coverage is not included, but a plan for it is to be developed within five years of passage.)
A broadly representative Board of Trustees will advise the Commissioner of Health.
Federal Funding and Waivers
Under the bill, New York would seek federal waivers that will allow ESH to encompass Medicare, Medicaid, CHIP, PPACA, and any other federally-funded program.
Private insurance that duplicates benefits offered under ESH cannot be offered to NYS residents.
Eligibility, Benefits and Cost-Sharing
Every New York resident is eligible to enroll, with no premium or other charge.
The benefits will be those provided by Family Health Plus, Child Health Plus, Medicare, and, for those eligible for Medicaid, by Medicaid (except long-term care).
There is no cost-sharing (deductible, co-pay, co-insurance) under the program. Members are required to enroll with, and use the services of, a care manager, but services are not denied if they have not yet had the opportunity to choose one.
Payment to Providers
Initially, payment to providers will be on a fee-for-service basis, except for care management, but other payment methodologies can be set up by the Commissioner. Fees would be negotiated with providers' representatives.
The bill does not include funding, but provides that the Governor will propose a funding plan composed of a graduated payroll tax, paid 80% by employers and 20% by employees, and a non-payroll assessment on unearned income (dividends, interest, capital gains). These funds, and Federal funds received under various waivers, will be placed in an Empire State Health Trust Fund.
*Summary prepared by Dr. Len Rodberg, Research Director, PNHP-NY Metro