New York’s Single-Payer Health Care Bill Would Save Lives, Money, Create 200,000 Jobs

From CitizenVox guest blogger J. Thomas

 

This month, Dr. Gerald Friedman, Chair of the Department of Economics at the University of Massachusetts at Amherst, released a new study on the potential cost savings if New York state implemented a single-payer, universal health care system. In a single-payer system, every American would be guaranteed a basic level of health care, much like Medicare guarantees health coverage to American seniors.

Among the findings from Friedman’s estimates: 98 percent of New Yorkers would save money; 2 percent of New Yorkers – those making more than $436,000 annually – would pay more via increased taxes; New Yorkers would save an average of $2,200 each year; and business savings would spur the creation of 200,000 jobs. Moreover, Friedman says, “New York’s overall economic savings from a single-payer model reduces health care spending by $45 billion.”

“This detailed economic study gives us clear proof that a universal health care plan is the right move for New York,” said Assembly Health Committee chair and lead sponsor Richard Gottfried.

It’s more urgent than ever for New Yorkers to learn about the benefits of universal health care. In December, Public Citizen Health Care Advocate Vijay Das spoke before New York legislators as part of a series of historic meetings in support of the New York Health Bill, which would extend health coverage to every New Yorker. The bill currently has 77 cosponsors (out of 150) in the New York Assembly and 19 cosponsors (out of 63) in the New York Senate.

More than 80 New York organizations have endorsed single-payer, including Physicians for a National Health Program New York Metro Chapter; HealthCare-NOW! NYC; New York League of Women Voters; Green Party; Working Families Party; New York State Black, Puerto Rican, Hispanic, and Asian Legislative Caucus; New York AFL-CIO and many other labor unions, health and consumer groups.

The report acknowledges that our current system is both inefficient and unaffordable. The political reality is that the Affordable Care Act (ACA, or “Obamacare”) was compromise legislation that fell short of providing universal health coverage. While the ACA extends the benefits of insurance to more Americans, it’s built on a weak foundation that preserves the inefficiencies of the for-profit health insurance industry.

The United States is the only country in the developed world that doesn’t guarantee health insurance to its citizens. What’s more, we spend more money on health care as a percentage of our gross domestic product than any other country in the world – rich or poor – with poorer outcomes.

There is a large and growing number of citizens who favor the move to universal health care in the United States. A new poll shows that most Americans support single-payer health care, including 80 percent of Democrats. President Obama himself backed single-payer as a state senator in Illinois.

The nation deserves universal health care and if New York leads the way on single-payer, it would be an innovative laboratory of democracy — as the states were envisioned to be by the founders of our federal system.

J. Thomas is a health policy fellow with Public Citizen’s Congress Watch.

Help MVHCA on the road to true universal health care by donating, hosting a house party, signing up for the newsletter, and attending our monthly meetings.

Post-Tour Q & A with Gerald Friedman

Mike Huntington relayed these questions to Gerald Friedman. Clarifications in red are Mike’s.

MODELS/STEPS

Q. What’s your opinion about the wisdom of individual states achieving single-payer healthcare rather than working politically to achieve a national single-payer system?
A. With our national government gridlock, states’ efforts are needed even though they may not achieve economies of scale and other benefits of national health insurance. We need to start with a few states in order to match the success of OECD countries in providing the best healthcare to the most people at the least cost.

Q. How can we handle the mechanics of single-payer at the state level? We don’t have the administrative machinery of Medicare to achieve a 2% overhead. (We can’t even build an exchange.)
A. A state single payer plan will be far simpler than the exchanges. Billing could be handled through phone terminals at each provider’s office and healthcare credit cards or smartcards.

Q. What changes should Oregon make for a state-level effort to achieve health care for all Oregon?
A. Get the feds on board regarding Medicare and Medicaid. Learn how the VA is negotiating prices for pharmaceuticals.

Q. Is the co-pay is less likely to prevent the patient from making an appointment and getting needed care than a deductible?
A. Dr. Friedman prefers neither although the co-pay could be administratively simple.

Q. Is there any movement by the people toward single-payer in Massachusetts since healthcare costs are not being controlled by Romney Care?
A. Yes! There is a strong movement for single-payer healthcare in Massachusetts. One third of the legislators (13/40 in the Senate) favors single-payer. Donald Berwick is running for governor, calling for single-payer.

Q. What do you think it will take to achieve a national single-payer system?
A. It will take determination by single-payer supporters. Right now it’s time for the ACA to play itself out.

Q. How can we get around the federal employee benefit plans, federal retirees, and other plans over which the state has no control?
A. We can ignore them if we offer the health plan to everyone in the state.

Q. Are you confident that the assumptions you made in HR 676 (Medicare study) are applicable at the state level?
A. No, they are not.

TAXES

Q. What kind of taxes would you recommend here in Oregon? (Remember we are one of the few states that does not have a sales tax and that depend heavily on personal income taxes to meet the state’s needs.)
A. A top rate would be 9% but this would be deductible from federal income tax assessment. The top federal tax would be 38% making the total 47%.

Q. What type of taxes might people accept?
A. Rich people will probably favor payroll tax, while businesses and corporations will favor an income tax.

Q. What lessons have we learned from Vermont? Do you think they are applicable to Oregon?
A. Vermont and each state will have to deal with the fact of imposing a very large tax. Vermont’s bill based on health care as a human right was passed but without funding explicitly outlined. Now Vermont is struggling to answer funding questions.

Q. You recommend payroll taxes as a part of the formula to finance a single payer plan but with different levels of tax at different income levels. Would the employers match the payroll tax paid by employees? Would large and small employers pay the same percentage?
A. Yes, but in reality both the employer contribution and the employee contribution come from the employee as part of the negotiated salary/benefits package. All payroll taxes are really from the employee. Any amount of payroll tax paid by the employer represents foregone wages negotiated away from employees. Workers wages have been relatively flat over the past twenty years as US business productivity and CEO incomes have dramatically risen. -- Mike Huntington.

Q. How would a single-payer system save money for a small business, that is, one with 50 or fewer employees?
A. A business owner would have personal savings because of reduced or eliminated insurance premiums. Business would increase because consumers would have more money. Employees would be healthier, more productive and reliable. There would be a decreased payroll tax. Recruiting employees would be easier. Even if a business does not qualify for or take advantage of a tax credit through the ACA or does not offer health insurance to its employees (the owner must offer health insurance to employees if the business pays for the owner’s policy) the owner as an individual will save money under a single payer system like everyone else. Everyone else will have more money to spend because they will be paying less for health care. -- Mike Huntington.

Q. What happens to the liability of corporations that have guaranteed future health insurance to retired employees?
A. Corporations (especially multistate corporations) will be relieved of their liability and should jump at the chance to do so.

Q. A tax on financial transactions (“Tobin tax”) should be supported by those who are concerned about stability in the economy. What are some of these groups, and are they actively seeking a Tobin tax right now?
A. National Nurses United and the progressive Caucus of Congress led by Keith Ellison of Minnesota support a Tobin tax. (In other words, liberals and labor.)

Q. Are there financial/cost studies available that a non-financial person can see and understand regarding how or whether universal healthcare payment is viable?
A. Yes. Go to the national PNHP website and enter Gerald Friedman in the search window. Also go to dollarsandsense.org for a two-page summary by Dr. Friedman.

OPPONENTS

Q. What is rent-seeking?
A. It is making a monopoly out of business to increase one’s profits. Examples are big Pharma’s ever-greening of drug patents; also hospitals and insurance companies buying up physician practices.

Q. Do you expect the pharmaceutical industry, hospitals, and medical equipment makers to argue against a single payer system? Are they going to do this right now, do you think?
A. Not now but later, yes, these companies will pour hundreds of thousands of dollars into a media campaign opposing any single-payer proposal that appears to pose a threat to them.

AWESOME! 2 Talks by Gerald Friedman, PhD, Economist , UMass.-Amherst

Reception for Dr. Friedman

Number of tickets

 

May 16, Gerald Friedman, PhD, Economist , University of Massachusetts-Amherst

Gerald Friedman, PhD, Economist , University of Massachusetts-Amherst will tour Oregon mid-May, speaking to health care practitioners, business leaders , health care activists and other interested persons in Pendleton, La Grande, Eugene, Ashland, Corvallis, Bend and Portland.

Here is a recorded 5 minute concise message from Gerald Friedman in a May 9 interview by KLCC in Eugene.

The Oregon tour is sponsored by Physicans for National Health Program , Oregon chapters: Health Care for ALL Oregon, and Main Street Alliance of Oregon.

At noon, Friday, May 16 in Corvallis, Dr. Friedman will talk about U.S. Health Care in comparison to health care systems in other developed countries at OSU Hallie Ford Center, room 115, Campus Way and 26th St. Center for Global Health, OSU College of Health and Human Services, and The Hundere Foundation, OSU College of Liberal Art are co-sponsors.
At 7 p.m., May 16 in Corvallis, Dr. Friedman’s talk “Best Health Care?”, will focus on can we afford health care for ALL at Dennis Hall ,First Presbyterian Church, 9th and Monroe. Participants are encouraged to bring their questions.Physicians for National Health Program, Corvallis chapter and Mid-Valley Health Care Advocates are also co-sponsoring the OSU and Dennis Hall events.

Both presentations are free and open to the public.Immediately following the presentation in Dennis Hall, a reception will provide opportunities for participants to talk with Dr. Friedman. Tickets for the reception are $15 and tickets are available through MVHCA website (see below) and at WineStyles and Grass Roots Book Store in Corvallis.

The recent fiscal study by Dr. Friedman reports that upgrading the nation’s Medicare program and expanding it to cover people of all ages would yield over half-trillion dollars in efficiency savings its first year of operation, enough to pay for high quality comprehensive benefits for all residents of the United States at a lower cost to most individuals, families and businesses.

Dr.Friedman’s study is based on analysis of HR 676, a bill sponsored by Rep. John Conyers of Michigan, extending Medicare to all US residents within a single risk pool, frequently described as a “single payer”.  The study centers on the nation’s health insurance system, where competition among private payers leads to administrative redundancy which increases costs without improving health.

In addition to Dr. Friedman’s study of HR676, Expanded and Improved Medicare for ALL, Dr. Friedman has published four state studies of single risk pool health systems.

 

The Single Payer Movement Expands

Even as the Affordable Care Act is in its nascent stages, some states are already looking toward 2017 when they can request waivers to opt out of the healthcare exchanges. And a small, but persistent, movement has popped up toward a single payer system as an alternative to participating in the exchanges.

That grassroots movement is taking place in Pennsylvania.

In March, a report exploring the single payer system was created for the state by Gerald Friedman, professor of economics at the University of Massachusetts at Amherst. He found that a single payer system would cost $128 billion in 2014 as opposed to the current system, which costs $144 billion. It would save 11 percent ($16 billion) of healthcare costs in 2014, mainly by lowering spending on administration and reducing drug costs.

The biggest winners under a single payer system in Pennsylvania would be employers, said Friedman. Employer-provided insurance currently costs about 13 percent of payroll in Pennsylvania, he noted.

David Steil, president emeritus of HealthCare4AllPA, the nonprofit organization advocating for a single payer system in Pennsylvania, and a business owner, agrees with Friedman’s assessment of the benefits to employers. “Businesses shouldn’t be in healthcare,” he said.\

Full article here.

NOTE: Dr. Friedman will be speaking in Corvallis on May 16. More information here.