Single Payer Healthcare – Multiple Considerations

Partnership Presentation Discusses the Proposed New York Health Act

The call to implement a single-payer healthcare system in New York is beginning to grow louder.  As the conversation heats up, state residents are asking what a proposed New York Health Act (NYHA) may mean for employers, employees and taxpayers?

Bill Hammond, Director of Health Policy at the Empire Center for Public Policy, offered some guidance at the Partnership’s recent Capital Conversations event. Empire Center is an independent, non-partisan, non-profit think tank based in Albany. The keynote speaker touched on the many unknowns of the NYHA proposal as well as some of the obvious drawbacks.


Hammond – who has written extensively on developments in the healthcare industry and the impact of decisions in both Albany and Washington – began by explaining that single-payer and universal healthcare are not the same thing. Universal coverage means everybody has a health insurance plan with options to choose from. Single-payer means everybody has the health plan – there is only one choice, in this case, run by the state government.

The Proposal.

Hammond described the NYHA – first proposed in 1992 – as a particularly maximalist form of single-payer insurance. It promises:

  • A plan that covers all healthcare – hospital, prescriptions, dental, vision, etc.
  • Every resident of New York would be covered
  • The plan would have no deductibles, co-pays, etc.
  • Patients could see any doctor they choose
  • One plan pays for everything through the state, eliminating the need for Medicaid, Medicare, etc.

Hammond noted the proposal is detailed on all the good things single-payer system offers, but it is very vague on all the unpleasant questions. How will it be paid for? How will providers be reimbursed? The proposed NYHA, Hammond said, leaves many hard choices unaddressed.


The general idea of the NYHA is that the state would take everything currently spent on Medicaid, Medicare, private insurance and every other conceivable form of health insurance and run it through the state government.

The theory is such a system would save money on administration; it would require fewer people to process claims on the insurance side; and it would save providers money by reducing dollars spent on processing claims from their side. The plan would also save money as the state negotiated a hard bargain with drug companies, hospitals and other providers in a take it or leave it scenario.

As Hammond pointed out, this has never been done before so no one really knows what the cost would be if the NYHA were implemented.

In Reality.

Everything New York currently collects for revenues – including income tax, sales tax, business taxes, the lottery, etc. – totals approximately $78 billion dollars. According to a few estimates and studies done on the NYHA, in the best-case scenario, New York State would have to collect an additional $92 billion for single-payer health insurance. In the worst-case scenario, the estimate nearly quadruples the tax burden to $226 billion.

A study by RAND Corporation on NYHA estimates that after redirection of federal and state health care outlays to the plan, the additional state tax revenue needed to finance the program would be $139 billion in 2022, a 156-percent increase over total state tax revenue under the status quo.

Hammond pointed out the plan requires significant federal waivers for Medicaid, Medicare and other Affordable Care Act (ACA) requirements. There is no guarantee the state would receive these waivers, and, in fact, it is very unlikely under the current Trump administration.

Hammond also noted that the estimates are only the start – healthcare costs won’t stay where they started under the plan. In fact, today health care costs usually grow faster than inflation and the economy.

New Taxes

As Hammond explained, the NYHA proposal creates two new, progressively graduated state taxes on New York residents and employers.  A payroll tax split between employers (80%) and employees (20%), and a tax on non-payroll income. Keep in mind, the Tax Foundation’s annual review of tax policy (LINK TO BLOG?) places New York State as the third worst tax climate for business in the nation.

Added Drawbacks

Hammond continued to highlight many of the drawbacks of NYHA, which are essentially the unknowns:

  • Currently one-fifth of the state’s economy is healthcare – hospitals, physicians, etc. NYHA would be a fundamental change that would disrupt the state economy, and the system would hurt some providers worse than others.
  • The bill as it stands does not spell out how the state would handle reimbursement to providers leaving it to be figured out down the road.
  • The NYHA risks doctor flight – medical professionals who lose income due to the plan may ask why they should stay in New York.
  • Under NYHA, new progressive taxes will heavily finance the program. All the cost estimates are blown out of the water if high-earning New Yorkers decide to leave the state to avoid higher taxes.
  • NYHA would eliminate insurance jobs and practically an entire industry. Health insurance companies could not sell insurance in New York for anything already covered by the plan.

Hammond summarized many other problems such as cost controls, the strain on capacity of the healthcare provider systems as more newly insured people seek service, and the impact of such a system on care quality.

For sure, single-payer health insurance is a complicated issue with much to consider. More information on NYHA can be found on the Empire Center’s web site at empirecenter.org. Our thanks to Bill Hammond for his insightful and educational presentation as part of the Partnership’s Capital Conversation series.

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Vice President, Government Affairs