The Health Care Solution To NY’s Budget Deficit

The SUNY system is no stranger to budget cuts. It seems that for decades state politicians have tried (and sometimes succeeded) at putting public education on the cutting board. The irony being, of course, that SUNY tuition contributes to propping up the New York State budget.

In the 08-09 budget, Paterson cut $146M from SUNY while trustees approved a tuition hike (the super-majority of which went directly into the state’s coffers). It’s the darndest thing, though: New York spends three times as much on health care as it does on education. Now, certainly, the proposed plan includes cuts to Medicaid… But are cuts the appropriate answer?

Let’s talk about health care in New York. New York had the fourth highest per capita spending on health care ($6,535) as of 2007. New York also has some of the highest insurance premiums. Nationwide, medicaid enrollment has had a positive correlation with unemployment (many people rely upon their employers to provide health care), the effect of which has been obvious: greater strain on the budget and poor, myopic decisions by state politicians.

One of the reasons for such high premiums in New York has to do with the way in which we’ve pursued health care reform (very similar to the way Obama hopes to address the national health care system). Under Cuomo, state regulation of health care resulted in two well-intentioned but horrible rules: (1) insurance companies can’t adjust prices based on health/age and (2) insurance companies can’t deny anyone coverage who can afford it.

Here’s the thing: the major non-profit provider of health care at the time (who, might I add, endorsed these regulations in an effort to prop itself up against the insurance companies) failed to report that because of these kinds of mandates it had been suffering losses and eventually dropped out of the game entirely. This resulted in private insurance companies raising their premiums across the board in order to maintain profits (nearly a third of which go toward marketing and CEO salaries, mind you) which has helped to herd people into Medicaid.

Parente and Bragdon, writing in the Wall Street Journal, advocate “market based reforms”. These sound neat and it’s easy for us to say that government interference has caused New York’s health care problem and therefore contributed to budget concerns, but this is a shallow view of a complex issue. The problem here is profit. The problem here is “competition”. The problem here is the commodification of health and the ensuing class-based discrimination and subsequent hands-free (or not so free) genocide (45,000 uninsured die each year).

If you believe that health care is a human right and that therefore we must find the most optimal solution to ensure universal, quality coverage as well as economic stability within that solution then we’re on the same page.

I’ll reiterate that around 1/3 of insurance premiums go toward marketing and CEO salaries, two things I fail to see as integral to patient care and research and development. The reason premiums skyrocketed after New York’s petty health care reform efforts doesn’t just have to do with breaking even and covering the cost of high-risk clients who they’re now forced to cover. It has to do with meeting that criteria and then surpassing it, not only to reproduce CEO salaries but to increase those salaries! That’s the thing about for profit industry: it’s all about the growth of profit.

So, peep the strategy:

Let’s ditch these high rollers and archaic class-based health care system and establish a state-wide single payer system. Medicare for all. A single, public entity propped up by a progressive tax which will be, without a doubt, cheaper than most New Yorkers’ current premiums as well as an employer tax only for those employers who currently provide health care which will almost certainly be cheaper than what they currently pay for their employees under-coverage.

A single payer system doesn’t require a CEO salary or marketing and so all of that money can go to providing care, research and development and new technology. A single payer system doesn’t require a wasteful and horrendously expensive system of paperwork and filing. A single payer system doesn’t include the legal fees that come from dealing with clients you’ve denied coverage. Best of all: a single payer system may be the best antidote to an ailing state economy.