Since the passage of Obamacare, polling consistently has shown people do not view the program favorably. Indeed, as has recently been reported, Dr. Gruber, one of the so-called architects of Obamacare, was recorded as saying that the only reasons the law passed Congress was because of the stupidity of the American voters and that there was a lack of transparency as to how the law was going to be financed. Gruber’s comments notwithstanding, this past election confirmed for many federal legislators who voted for Obamacare that the “stupid” American voter was going to hold them accountable for the passage of this flawed law. This is a sentiment that isn’t just coming from a Republican. Democratic Sen. Charles Schumer in a post-election speech also said as much.
Against this backdrop, it is surprising that a number of Democratic state legislators want to go a step further than Obamacare and implement a government-run single-payer healthcare system in New York state. The chair of the Assembly Health Committee is sponsoring the bill. He admits that Obamacare isn’t working, but apparently rather than advocate for its repeal, he wants to double down on government intervention in healthcare and enact a system that would be completely paid for by the government. In effort to build support for his plan, he has been holding public hearings throughout New York state, including one in Syracuse earlier this month.
According to the chairman, under his universal health plan, all New Yorkers would be covered, practically all healthcare would be covered and it would all be paid for by the government. Interestingly, the bill does not estimate how much this would cost, but rather simply states that this government-funded plan would be “the most effective for reducing and controlling costs for taxpayers, employers and individuals.” This is a claim made even though it would be paid for, in part, by a new payroll tax and a surcharge on income tax both personal and corporate. I’m sure individuals and businesses will be relieved to know that their healthcare costs will be “controlled” because they will be taxed more.
One doesn’t have to look far to see how similar universal health care plans are working. Vermont has passed a single-payer system under which the state will pick up the tab for Vermonters’ healthcare. The state itself estimates that it will take $1.7 billion to $2.2 billion in additional revenue to pay for the system which is slated to go into effect in 2017. The problem is no one has any idea how this is going to be paid for in light of the fact that Vermont collects only $2.7 billion a year in taxes. It is a safe bet that supporters of such a system will advocated for higher taxes. So much for great savings.
Putting the concern over costs aside, there are other problems with a government-funded healthcare system like the one being proposed here in New York. Reimbursement rates for medical providers would be set by the state similar to how Medicaid and Medicare now work. Due to the inevitable costs constraints, it is likely that reimbursement will be low (as they are for Medicaid). Accordingly, it isn’t a stretch to envision that less people will be willing to practice medicine in New York knowing that they will not be compensated appropriately. We are already seeing this in our Medicaid system. A survey from 2013 indicated that 51 percent of primary care physicians are not accepting new Medicaid patients because government reimbursement rates are so low. Why do we think this will not be the case if we institute a single payer system?
Most people would agree that our healthcare system is in need of improvement. In many ways, our system is inefficient and too expensive. However, under the bill being proposed, healthcare is simply being expanded without any reforms to control cost (other than by government fiat). The good news is this bill has failed to gain any traction in the legislature in the past few years. Hopefully, that continues to be the case.
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