Another healthcare surprise

Posted 8/21/12

The track record for newly created entities providing healthcare in New York State in compliance with the Affordable Care Act (ACA), also known as Obamacare, is not a very good one.

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Another healthcare surprise

Posted

The track record for newly created entities providing healthcare in New York State in compliance with the Affordable Care Act (ACA), also known as Obamacare, is not a very good one.

Health Republic Insurance of New York (HRINY) started serving customers in 2014, and offered the most reasonable plans available. But by fall of 2015, state and federal agencies decided to force the organization to close down because of its precarious financial position, a position that was in no small part caused by the fact that federal government failed to pay out some $131 million it had promised HRINY as part of the risk corridor program.

Some 200,000 people at the end of 2015, including several at The River Reporter, scrambled to find new insurers. In this area, Crystal Run Healthcare took up some of the slack by offering comparatively affordable plans. But now, users of the plans offered by Crystal Run have been informed that the organization is seeking about a 60% hike in premium costs for 2017.

Asked to comment on that, Steve Zeng, the executive director of Crystal Run Health Plan wrote, “Crystal Run is committed to achieving the triple aim: improving patient care, improving health and reducing cost. With its proposed 2017 rates, Crystal Run Health Plans will be among the lowest cost options for individuals and small groups in our region.”

Crystal Run has a very good reputation for delivering healthcare, but the overall industry is still burdened by an insurance sector that mostly exists to make a profit. It is beyond time to do away with healthcare insurance companies altogether by passing the New York Health Act (NYHA,) which would provide every resident of the state with medical coverage and significantly reduce healthcare costs in the state.

The New York State Assembly voted on June 1 in favor of adopting the act by 86 to 53, and it’s the second year the assembly has so voted. The act has been championed for more than a decade by Assemblyman Richard Gottfried, who noted that insurers this year in the state are seeking large increases, saying, “Year after year, the cost of coverage for families and employers goes up faster than wages and inflation. Premiums, deductibles, co-pays, out-of-network charges, and uncontrolled drug costs undermine healthcare and family finances, and are a heavier burden on employers and taxpayers.”

According to a 2015 study of the plan by Gerald Friedman of the University of Massachusetts, adopting the NYHA would save the state some $45 billion a year, and would significantly reduce expenses for counties in the state, which are responsible for a large share of Medicaid payment. With NYHA in place, counties might be able to reduce the property taxes they collect.

Friedman’s study says, “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 healthcare 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.”

Naturally, there are some people, including many New York State Senators, who are opposed to the plan and say it won’t work. That’s also the view espoused by Paul Macielak, the president and CEO of the New York Health Plan Association, who said of NYHA, “The bill’s sponsors have an unrealistic utopian view of a universal healthcare system where everyone would be covered, everything would be covered and the system would magically pay for it all.”

The problem with saying a single-payer plan won’t work is that there is clear and convincing evidence that single-payer plans do work; they’re being used today in at least 15 developed countries such as Norway, United Kingdom and Japan. Moreover, the countries using single-payer plans have among the best health outcomes of any countries in the world, far higher than those achieved here. U.S. residents pay the highest price for healthcare of any country in the world, but according to the World Health Organization, the country ranks at number 37 in terms of health outcomes.

While a national single-payer plan is likely not in the cards because of the current political climate, a statewide single-payer plan is within sight. The Assembly is on board; now if only our Senators would join them, New York could lead the way for the nation.

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