Single Payer Health Care: the Best Way to Reduce Taxes

By Andrew J Pragacz

New York counties annually pay $7 billion in Medicaid costs, or approximately 15% of total Medicaid cost in the state. This unique cost-sharing arrangement-(-no other state in the union burdens counties with Medicaid costs in this way)–are some of the largest single costs in county budgets.  In Broome County, for example, $38 million annually goes toward Medicaid costs.  That is more than entire BC Sheriff’s budget, running $30 million a year.  This $38 million chews through a full 60% of total cost of Department of Social Services, and accounts for 20% of the taxes taken in by the county through sales and property taxes.

The fact of tight county budgets is used for all manner of dubious deeds in Broome County from limiting pay and benefit increases for workers, to harassing welfare recipients, to privatizing the County Food Services, and motivates constant threats to Willow Point, the county bus system, and the consolidation of the office of mental health services.  The county spends hundreds of thousands annually trying to figure out how to save money–almost always through privatization efforts—by employing consultants and so on.  This is all tinkering around the edges.

Removing this massive unfunded mandate is the single best way to reduce taxes, keep–and expand!–necessary public services, and return more collected sale taxes to localities.  Thirty eight million dollars extra in the county budget means, for those committed to public institutions, no more fighting for scraps or fighting to save one public good after another. It would even allow creative community investment, from clean energy technologies to enhanced public transportation, and expanded access to daycare.  The possibilities are not endless, but close.

The question is: how to move the Medicaid tab off the county books without simply moving the cost to another pot of taxpayer funds?  The answer: single payer health care in New York State.  Single payer is the only realistic answer to budgetary issues, job loss, stagnant economic growth, and the health and healthcare crisis in upstate New York.

The Case for Single Payer                                                                                                                                       The case for single payer is straightforward.  Our current for-profit system is expensive, produces poor health outcomes, and is wildly unequal.  The tight link between employment and healthcare (most persons, especially in New York, get health coverage through their employers) keeps people locked into jobs they cannot leave for fear of losing healthcare, meaning they can’t switch to higher paying jobs, start businesses, or be creative in any number of productive ways.  Currently, New York governments pay almost half the total healthcare bill not including health insurance coverage for governmental employees.

Less considered, however, are the very positive impacts single payer healthcare would have on state, county, and local budgets.  Single payer (as presented in the New York Health Act crafted by NYS Assemblyperson Richard Gottfried) would eliminate county and local funding of Medicaid.  It would also, however, mean that schools would no longer need to pay for health insurance for teachers, nor cities for healthcare for police, firemen, and retirees.  Healthcare for governmental workers is one of the key drivers of tax increase especially at the local, district, and county level.  A recent report estimated that universal healthcare would save local governments $13 billion in the first year of enactment.

The argument against universal healthcare is also very straightforward, but wrongheaded.  It’s often argued that universal healthcare would be nice, but would be far too expensive.  Rather, in the first year of enactment universal healthcare would save $71 billion in healthcare costs by eliminating high administrative costs, profit, fraud, and reducing costs of drugs.  At the same time households making under $436,000 annually (or 98% of New York families) would see their healthcare bill drop. Furthermore, the plan would reduce the healthcare bill of many employers, since employers often pay for at least a portion of an employee’s healthcare.

Take a person making $75,000 annually.  Under the plan a total payroll tax of 6.7% or $5,800 would be levied.  Under the plan the employer would pay 5.3%, or $4,000 and the employee would pay $1,800 annually. In New York State businesses employing 25 or less persons pay, on average, 8% of their payroll for healthcare insurance and a family plan costs $17,530 with a $1,400 deductible.  And don’t worry: anyone making $25,000 of less will pay no payroll tax nor will their employer.  Yes, people at the top would pay a little more, and it’s about time!

The question remains: why have our county and local governments been unwilling to support universal healthcare?  What prevents our budget conscious officials from embracing this common sense measure?  These officials have no problem with tax breaks for big business, but won’t support workers’ economic and physical health.  Who do they really work for?







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