Economic Analysis of the New York Health Act
Author: Gerald Friedman, PhD
Published: April 2015
Financed by: Campaign for New York Health
Legislation analyzed: New York Health Act
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By reducing burdensome billing expenses, administrative waste in the insurance industry, monopolistic pricing of drugs and medical devices, and fraud, the Act would save over $70 billion in 2019, 25% of that year’s projected health care spending, and savings will increase over time. Some savings would be used to finance system improvements. Even after expanding coverage to the uninsured, removing barriers to access, and correcting the underpayment of Medicaid services, the Act would save $44.7 billion in the first year alone, nearly $2200 per person. Furthermore, by reducing the number of New Yorkers without health care, these improvements would save thousands of lives each year.
The New York Health Act would be financed with assessments collected by the State based on ability to pay. Payroll assessments would be graduated according to income, and there would be a progressively graduated assessment on non-
payroll taxable personal income (e.g., capital gains, dividends and interest). These would fund health care in New York while reducing the burden on the sick, the poor, and the middle class. While the largest savings would go to working households earning less than $75,000, over 98% of New York households would spend less on health care under the Act than they do now.