For many years, New York state government has been divided between the two major parties. Neither Assembly Democrats nor Senate Republicans could advance their legislative agendas without cooperating with one another. That balance has worked well for the state, preventing proposals from either side of the political aisle from becoming law unless they represented true bipartisanship.
But this balance is about to be lost in Albany, and if the Democrats, who now control the State Legislature, fail to exercise their newfound power responsibly, the consequences for New York taxpayers could be severe. And the biggest test of whether Democrats will exercise reasonable self-restraint will be how they handle the state’s health care policy.
The health care system is a major force in New York. The vast majority of New Yorkers have good coverage through their employers in the private insurance market. We have some of best hospitals in the world. Our medical schools and research centers are likewise renowned. Health care workers make up a large and growing portion of our workforce. These good-paying jobs have helped lift the living standards of many workers, particularly in minority communities.
This strong health care system already comes at a significant cost to state taxpayers, who, in addition to bearing the cost of their own care, also help support a very generous public health care system. That public system is Medicaid, and it consumes a large portion of the budgets of both New York state and its counties, which help pay for the program.
Total Medicaid spending this year in New York will exceed $65 billion — the largest item in the state budget. It covers 6.5 million New Yorkers, at an average cost of $10,000 per recipient. And New York’s Medicaid benefits are among the most generous in the nation. California, by way of comparison, covers 12 million people, but only spends around $8,000 per recipient, 20 percent less than New York.
No one can justifiably criticize New York for underspending on health care. But if those pushing a so-called “single-payer” system for the state succeed, health care costs here could explode. That’s because even with New York’s expansive public and private health care coverage of 18.5 million people, there are still 1 million to 1.5 million uninsured residents. Adding these people into New York’s Medicaid system could add $10 billion to $15 billion to the state budget. Taxes would skyrocket.
The single-payer proposals in New York go much further than simply expanding an already expensive Medicaid system. The most radical would upend the health care system here by abolishing all other health insurance and adding every state resident to a state-run single-payer system administered in Albany. There would be no more employer-sponsored private health insurance, just one statewide public system for all New Yorkers.
Single-payer advocates claim they can wring enough savings out of the state’s health care system to pay for this expanded coverage, somehow insuring more people without increasing overall costs. That’s very hard to believe. If past is prologue in New York — where public health care spending invariably exceeds projections — the state’s already overburdened taxpayers will inevitably see their taxes rise even more. And since a large share of the cost of a single-payer system would still ultimately be paid for by taxes on employers, we could expect a further exodus of businesses from New York.
I’m thankful that these single-payer proposals have no chance of being implemented in New York for at least the next two years. That’s because advancing this radical makeover of health care here would require a waiver from the federal government, which oversees Medicaid nationwide. That’s highly unlikely to happen during the next two years of the Trump administration, but after that, all bets are off. If the White House changes hands in 2020, the next administration may be far more favorable to the single-payer option.
Which brings us to the politics of this issue. As long as the far-left wing of the Democrat Party keeps clamoring for a single-payer system at the national level, this issue will help define the political landscape. Leading Democratic presidential contenders have made single-payer health care a centerpiece of their expected campaigns.
Let’s hope saner heads prevail. In medicine, doctors strive to “do no harm.” The same should apply to those who set health care policy in New York and Washington.
Al D’Amato, a former U.S. senator from New York, is the founder of Park Strategies LLC, a public policy and business development firm. Comments about this column? ADAmato@liherald.com.