S.5425 (Duane) / A.7860-A (Gottfried)


Director of Government Affairs
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S.5425 (Duane) / A.7860-A (Gottfried)


Establishment of New York Health Plan



The Business Council of New York State strongly opposes S.5425 (Duane) / A.7860-A (Gottfried) creating the New York Health Plan, a socialized health care system.

The system would draw revenues from a new State Health Trust Fund sourced by federal funding and a significant 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 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 limits.  Given New York’s already high cost of doing business, a socialized health-care system funded by an additional 10 percent levy on payrolls and other surcharges is not only very bad economic policy, but bad health policy as well.

The bill also makes most group health insurance coverage illegal in New York State, prohibiting the issuance of insurance policies that “duplicate” coverage offered to individuals under the New York Health Plan.  In this one provision, 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. 

Amazingly, the sponsor’s bill memo’s cavalier approach contains 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 its costs and benefits.

Further, the bill dispenses with meaningful cost containment provisions.

In a world in which resources are limited always and everywhere, this bill’s promise of universal, unlimited coverage is a mirage. Single-payer systems inevitably must keep costs lower by rationing care, not by being more efficient.  In this “free-for-all system,” costs are driven up by patients over-consuming perceived “free” health services and the rationing of these services follows.

A socialized health-care system will not only ration care but will decrease 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.  Also, despite the bill’s provisions for collective bargaining, like other existing socialized medicine systems, it will ultimately provide substantially lower payments to health care providers and will lead to both shortages and inferior quality of care in the long run.  

This bill will restrict health care choices for New Yorkers, 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.

For these reasons The Business Council strongly opposes the enactment of S.5425 (Duane)/A.7860-A (Gottfried).