Transforming into a single-payer health care state


Universal health care isn’t a new concept. The first modern iteration of such a system was first implemented in 1883 by Prussian leader Otto von Bismarck in the country that later became Germany.

The United Kingdom passed its own legislation in 1911 to cover primary care of the working class — about a third of the country’s population. Several European countries followed suit in the 1930s, with many of them — including the United Kingdom — adopting a universal coverage model over the next 20 years.

While each country with universal health care employ different administrative models, tax revenue is the common funding denominator. The U.K. government directly runs its health care system, while others in places like Germany, France and Japan use a two-payer system mixing both private and public funds. In some countries like Belgium and the Netherlands, a mixture of private insurance and government-funded health care exists, but insurance companies are prohibited from denying coverage for anyone based on age or pre-existing conditions.

The United States passed the Affordable Care Act in 2010 aimed to enroll the entire population into private insurance plans regulated by the government. Washington would subsidize premiums for low-income people through a tax, funded primarily from those who paid a penalty for not being insured. That funding stream was later eliminated by a 2017 tax cut championed by Donald Trump.

A single-payer system — like Canada’s, and the one proposed through the New York Health Act — would simply have the government pay for health care out of public funds through standardized systems and costs. The government would not directly administer health care, nor would it interfere in how health care is delivered.

The New York Health Act would provide complete health coverage for every resident, regardless of age, health, race, ability to pay, pre-existing condition, employment or even immigration status. It would cover medically necessary treatment and procedures, and both preventive and long-term care. A majority of licensed medical providers would be eligible to participate, and patients would have no restrictive networks.

Where possible, the state would use money already allocated by the federal government for programs like Medicare, Medicaid, the Affordable Care Act, and others — provided the federal government grants the state waivers to do so.

But a single-payer system would require New York to raise taxes significantly — enough to raise $139 billion in total revenue by 2022, according to a study last year by the non-partisan think tank Rand Corp. That’s 54 percent more than the current $90 billion in revenue the state collects now, and doesn’t include the expanded long-term program, which could add billions to the cost.

The same study, however, found that for the average person, single-payer coverage would be a net savings — even if they’re already insured. A single-payer system would eliminate insurance premiums, deductibles and co-pays for health care and prescriptions, vision and dental coverage, and long-term care for the elderly and the disabled.

A payroll tax of 6 to 18 percent could fully fund the New York Health Act in 2022, according to the Rand report. Those who earn less would pay less for health care. In fact, for a majority of residents, medical costs would drop from 24 percent of income to just 14 percent.

Only the very rich would pay more — $1,700 per person for the upper levels, and $50,200 more at the highest most tier. Yet at an average income of $1.26 million for a family of four, that would account for just 16 percent of what’s brought home.

Employers currently offering insurance coverage to workers would contribute between $200 and $800 less per employee by 2022, according to the report. Businesses not offering health insurance would pay between $1,200 and $1,800 more per employee due to a mandatory payroll tax.

Yet there are some hazards in those additional costs. Because much of the tax burden falls on high-income earners, there’s a real risk that the super-wealthy might move out of New York, according to the report. Businesses could move their headquarters to another state, shift labor outside of New York, or just close altogether.

“That’s just not true,” said Assemblyman Jeffrey Dinowitz, a proponent of the New York Health Act. “People live in New York because they want to live here. I don’t believe that they’re going to move away.”

Without their contribution, the cost would fall on the middle class, where even a little tax avoidance could mean a huge change to the funding base.

“There wasn’t a flood of people moving into New York because taxes got lower,” Dinowitz said. “So why would people move out of New York if taxes got higher? There’s just no logic in that.”