Buffalo Niagara employers are committed to providing their employees with affordable healthcare, but the cost of doing so continues to climb. The Buffalo Niagara Partnership supports comprehensive access to coverage without imposing new regulations and fines on employers. Last year, 75% of Buffalo Niagara Partnership members who participated in our annual survey indicated that they experienced healthcare cost increases. That is why advocating for lower healthcare costs is one of the Partnership’s 2018 Advocacy Agenda priorities.
Unfortunately, employers cannot except much relief from New York State when it comes to reducing healthcare costs. In an effort to close the state’s $4.4 billion deficit, Governor Cuomo’s Executive Budget proposal included several new taxes and fees. The majority of these new taxes fall on the healthcare industry, continuing New York State’s long history of taxing healthcare to pay for healthcare. This reliance on healthcare taxes is one of the main reasons New Yorkers pay some the highest healthcare premiums in the country.
Specifically, the Governor is proposing to tax non-profit health insurers who are converting to for-profit status. These taxes would be used to establish a fund to ensure the continued availability and expansion of funding for quality health services and to mitigate risks associated with the loss of federal funds. The Governor has also proposed a 14 percent tax on underwriting gains of for-profit health insurance companies. This is an attempt to “recapture” corporate tax savings that for-profit health insurance companies may see due to the federal tax reform bill.
These new healthcare taxes are being proposed at a time when New York’s Medicaid costs are climbing rapidly. This increase is due to New York picking up some costs no longer covered by federal funding, as well as the impact of the state’s minimum wage increase passed back in 2016.
By taxing the very health care companies charged with providing quality health services to New York State residents, the state will be driving up the cost of health care. Health insurance companies will face the unenviable choice of either increasing prices, reducing the amount of coverage they offer in the state, or leaving the state all together. Regardless the outcome is the same: the availability of quality healthcare will decrease while the cost increases.
The Partnership will continue to push back against the overtaxing of the healthcare industry in an effort to provide Buffalo employers with some relief from the ever-increasing cost of healthcare.
2018 Advocacy Defined Blog Series Table of Contents: