New York’s expensive idea, single payer health care, is going to cost the state more than their entire annual revenue. The state currently has around $71 billion in tax revenue, but just this health care plan would cost over $91 billion, and that’s likely a low estimate.
The single-payer health care plan that cleared the lower chamber of New York’s state legislature on Tuesday would require massive tax increases to double and possibly even quadruple the state’s current annual revenue levels. The plan, which was passed 87-38, would eliminate all private insurance in the state while keeping medicare and Medicaid and would provide health care to everyone in New York through the state government.
The New York Health Plan would add to the already hefty tax burden on the state’s residents. The financial aspects of this massive health care takeover will be the biggest challenge for the state. New York collected about $71 billion in tax revenue last year. In 2019, when the single-payer plan would be enacted, the state expects tax revenue to exceed $82 billion. To pay for health care for all New Yorkers, though, the state would need to find another $91 billion annually, and that’s a low estimate. The cost of this health care plan is likely to far exceed the estimated $91 billion. Of course, the state’s largest health care union is backing the government takeover of the industry, and that will help drive the costs even higher.
Gerald Friedman, an economist at UMass Amherst and longtime advocate for single-payer health care, estimated in 2015 (when the New York Health Act was first passed by the state Assembly) that implementing single-payer in New York would cost more than every other function of the state government. Friedman also suggested a massive tax increase on New Yorkers pay for the government-run health care. He feels that New York should invent a new tax on dividends, interest, and capital gains that would range from 9 percent to 16 percent, depending on how much investment income an individual reports, and a new payroll tax that would similarly range from 9 percent to 16 percent depending on an individual’s income.
But other estimates for the cost of New York’s single payer health care plan would require quadrupling the tax burden on residents, making a 9% increase in income taxes look tiny. According to the Foundation for Research on Equal Opportunity, a Texas-based free market think tank, the annual price tag for the New York Health Act could be as high as $226 billion. Tax burdens have the biggest challenge in other states that have attempted to implement single payer health care. Colorado’s voters rejected single payer health care when they saw how much it would cost them in income taxes. For those already living paycheck to paycheck, any increase in taxes could do untold harm to the financial stability of those individuals, having a ripple effect in New York’s economy.
The economic disaster that follows such a massive tax hike would drive businesses out of the state and many people would lose jobs and homes or be driven to states they can afford to live in. But most don’t look at the financial impact, only that they would be getting “free” government-run health care that is far from free.
While a similar bill cleared the state assembly in 2015 and 2016, it never made it to the senate for a vote to become a law. That’s likely to change this time, but passage will still be difficult. The votes may not be there because of the politics of doubling, tripling, or quadrupling a constituents tax burden may not be in the best interest of the politicians now in power, especially when the gain is government health care.
The bill has many hurdles to overcome still, with the tax increases needed being the biggest one. Most Americans already think their taxes are way to high, so asking residents to cough up more of their hard-earned money will be an uphill battle for the state.
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Contributed by Dawn Luger of The Daily Sheeple.