New York State Assembly Committee on
The New York Health bill to create state single
payer health coverage
Lev Ginsburg, Esq.
Director of Government Affairs
January 13, 2015
My name is Lev Ginsburg. I am Director of Government Affairs for the Business Council of New York State. On behalf of the Business Council’s more than 2,500 members – businesses large and small all across the state – I want to thank the committee for the opportunity to testify and wish to submit these comments into the record as part of today’s hearing.
As the state’s leading business organization we are keenly aware of the fact that New York employers overwhelmingly identify employee health care as their top cost-of-doing business concern. The implementation of the federal Affordable Care Act has upped the ante, so to speak, on the unease of employers about their health care costs and has raised serious questions, especially among small businesses, about their ability to meet current and looming government mandates while staying competitive.
Given the unease, uncertainty and the transitional nature of the healthcare environment, we are very concerned with the proposal for single-payer health coverage being advanced today. In no uncertain terms, employers and employees want and need choice in their health coverage through a healthy market with a variety of coverage options rather than a one-size-fits-all government run program.
With enrollment in the New York State of Health exchange nearing one million newly insured, with more and more New Yorkers covered every day, we respectfully question the need for and the timing of this proposal. Single-payer health coverage is an old idea that has been squarely rejected from the days of President Truman, the Presidency of Bill Clinton and most recently, last month by the state of Vermont. Even Secretary of State Hillary Clinton, once the nation’s leading proponent of single payer coverage, has condemned the idea as recently as February of last year, stating, "We don't have one size fits all; our country is quite diverse. What works in New York City won't work in Albuquerque." The same holds true for our state.
The proposed system would draw revenues from a new State Health Trust Fund sourced by a tremendous new payroll tax (2 percent on employees, 8 percent on employers and 10 percent on the self-employed with additional surcharges on other taxable income). The proposed bill imposes no effective limit on these new taxes; in effect, it creates a parallel income tax structure with no set tax rates or tax ceiling. Simply put, it is never advantageous to impose a massive tax increase on employers, employees and consumers and its consequences could be disastrous to our economy.
As mentioned earlier, last month Vermont’s Governor Peter Shumlin abruptly ended his effort to create a similar single-payer health system in his state, citing the dramatic negative impact the plan would have on the Vermont’s economy. Considering the fact that New York’s population is over 30 times that of Vermont, it is quite reasonable to expect a dramatically larger price tag and greater negative economic impact here.
The detrimental impacts of a single-payer health coverage system in New York on our economy go well beyond higher taxes. Given the proposal’s absolute ban on private insurance, hundreds of thousands of New Yorkers, currently employed in the health insurance industry, would lose their jobs. The downstream impact of these job losses, felt by vendors serving those employers as well as every business patronized by the employees would be extraordinary.
Economic arguments for the introduction of a single payer-system do not hold true. The limitations of these systems became quite clear during the health insurance debates leading up to the enactment of the ACA. The Congressional Budget Office projected that premiums for a public option would be higher than premiums for private insurance; and this projection did not take into account the benefits of consumers having choice and the advantage of private insurers, who have real economic incentives to innovate and devise better ways to keep people healthy and costs low. Further, attempts to define innovative private insurance coverage as unworkable based on high administrative costs also ring hollow; since current law dictates a cap on what insurers can spend on such costs to 15 percent of premium.
Private health insurers have been the innovators in pursuing the highest quality health care delivered in the most affordable manner. Many of our member companies as well as our own staff take advantage of a variety of programs offered by our insurers to promote health and wellness in our workplaces, schools and communities, helping to prevent and manage health conditions from heart disease and diabetes, to influenza and high blood pressure.
It is the private market and not the government which has been the leader in health data analytics, cost of care methodology and leveraging technology and information to bring patients more access to care. A single-payer system that replaces a free market of innovators with government bureaucracy will in the end not only deliver worse health care but will do so at greater costs.
Throughout the course of these public hearings, witnesses have been testifying as to benefits of a single-payer system using the examples of our northern neighbor Canada. While Canada does have universal coverage, that coverage comes at a huge cost in quality of care. Canada’s system is plagued by rationing, long waits and scarcity of medical technologies, not to mention unsustainable costs.
The average Canadian has to wait 4½ months between getting a referral for medical treatment and actually receiving the care. These waits apply to such procedures as neurosurgery, orthopedic surgery and cardiovascular surgery. The longest average wait in the United States, Boston’s is 45.4 days. Canada’s average wait time for an MRI is over eight weeks and three and half weeks for CT scans. Rationing by waiting is an inescapable byproduct of a government run system; perhaps this is why over 40,000 Canadians annually come to the U.S. for care, many to New York.
To overcome the poor care, long wait times and lack of covered treatments in Canada’s “model” single-payer system, two-thirds of Canadians purchase supplemental private insurance. Perhaps the greatest irony in using Canada as an example for New York is that under the proposed New York Health bill, the sale of most supplemental health insurance products would be illegal in New York, leaving us at an even greater disadvantage than our neighbors.
As mentioned earlier, in light of New York successfully enrolling a million new people in health insurance since last year, we have concerns about both the timing and the need for this proposal. A socialized health care system will not only ration care but will decrease the quality of health care for everyone. While some witnesses in these hearings have asserted that our health system does not deliver the best results, the data regarding our health care system, at the point of medical intervention, disproves this assertion. In a worldwide study of cancer survival rates, called CONCORD, researchers found that 5-year survival rates among developed nations was highest in the U.S.
We know that people die for reasons other than health and if you remove deaths from fatal injuries, violent crime and other social rather than health-related causes of death from the life expectancy tables, the U.S. ranks first among developed nations. Another way of looking at this is that in the U.S., a man reaching age 65 today can expect to live, on average, until age 84.3 and a woman turning age 65 today can expect to live, on average, until age 86.6, the highest expectancies in the world. How can we possibly justify scrapping a system that renders these outcomes?
Since World War II, New York’s employers have been offering health insurance coverage to their employees as both a benefit and as a way of promoting wellness and fitness. Our members remain committed to providing the same for current and future generations of employees. Employers are concerned however with the growing cost of healthcare itself. Sadly, while this bill eliminates an entire industry sector in New York, and the jobs and family income that goes with it, as well as eliminates coverage choice and options for the vast majority of New Yorkers, it does absolutely nothing to control the actual underlying costs of medical services.
We have seen no real fiscal or economic impact assessments, no calculation of the amount of new taxes to be imposed, no apparent consideration of the adverse economic impact of eliminating an entire industry sector and its related jobs, or any other evidence of a serious assessment of this proposal’s costs and benefits.
In a world in which resources are limited always and everywhere, this bill's promise of universal, unlimited coverage is fundamentally impossible. Single-payer must inevitably keep costs lower by rationing care and decreasing the quality of health care for everyone. There will be substantially less potential payoff for health care innovation and less investment in advanced medical equipment and new technology all while providing substantially lower payments to health care providers and will lead to both shortages and inferior quality of care in the long run.
This single-payer proposal, if ever enacted, would restrict health care choices for every New Yorker, diminish the quality of health care in the State, significantly increase the tax burden for every working New Yorker and make the State a far less attractive place to do business and create jobs. For these reasons, the Business Council and its 2,500 members, representing one million New York jobs, oppose this proposal.
Thank you for your consideration.