Friday, February 2, 2018

Cuomo’s windfall tax will sicken the insured

There are 19.75 million people in New York.

Of them, 6.4 million receive Medicaid. 3.3 million are on Medicare. 700,000 are enrolled in the Essential plan for lower-income individuals who are not Medicaid eligible. There are 375,000 kids getting Child Health Plus. Then, there are likely 4.5 million people who receive government-funded insurance as a matter of public employment (1.5 million public workers with a general assumption of 2 family members added to their coverage).

So, 15.275 million people in the Empire State receive some form of government health insurance paid-for or subsidized either partially or, in most cases, in-full.  

That means that only 23 percent of New Yorkers – or 4.475 million people -- are fully privately insured whether they buy insurance on the exchange or pay in-part for or receive in-full health through their private sector employers.    

I bring those numbers to the fore to highlight not the struggles of those receiving government insurance, but instead, the very real struggles of the 4.475 million people who are not. We represent a distinct minority of New Yorkers who have been taking an inordinate amount of abuse at the hands of the state while so many others have been granted benevolence from it.

It’s bad enough that we and our employers have to pay insanely-high amounts for insurance which rises at what averages out to be an almost unbelievable 5 percent per year over the past 8 years; or that the average family plan has a premium of $9,990 and a deductible of $7,980; or that we could easily be bankrupted by having to pay that deductible in a time of personal crisis (if the premium didn’t ruin family finances already).

But, rather than granting relief from those costs, the state gives us misery and is looking to dole out more of that.

New York State already imposes four taxes on individuals and their employers who buy health insurance. There is the covered lives assessment which is a surcharge placed on every covered family member which in 2015 alone collected $1.1 billion. It is accompanied by a 9.63 percent tax on health services done at hospitals which helped the state glean $2.9 billion in 2015. That same year, a 0.83 percent assessment on insurers brought $240 million to state coffers while a 1.75 percent premium tax netted $353 million.

That’s $4.5 billion in taxes in just one calendar year.

Governor Cuomo will tell you that’s money collected from the insurance companies themselves. But, anyone with a basic understanding of economics knows that those costs are passed on to the consumer. It’s you and me who are paying those charges and fees.

The fact that Cuomo doesn’t understand that explains his latest assault on health insurers (which is an assault on the insured)… a fifth tax.

When he released his budget proposal last month he announced the creation of a new 14 percent surcharge on private health insurance companies. The Administration calls it a "healthcare insurance windfall profit fee" and it is his response to the federal government’s tax reform – he figures that the incredible drop in corporate income tax rates should be countered by an almost identical increase in state taxes to reap some of that “windfall” (money insurers would no longer be paying into federal collections).

That concept burst the bubbles of many of us who assumed, and rightly so, that the significant savings achieved from tax reform would have been passed on to the insured; after all, we’ve heard of other large enterprises across the country (like utility companies) that are keen on sharing the wealth with their customers. 

What does this mean?

Employers that provide health insurance know that its embedded taxes are among the highest taxes they pay. With no end in sight to rising costs, worst case would be that companies that compete globally will just get up and leave the state as they have been. The more likely scenario is that many of them will follow the lead of others and go to high deductible plans with employees having to shoulder that deductible.  

As I said earlier, those deductibles can harm a working family -- too few can claim to have thousands of dollars sitting around for family emergencies. When a health crisis does happen and they eat that expense, they either claim bankruptcy or take on another massive debt payment.

Maybe that’s exactly what Cuomo wants to happen to them. Then they’d be able to join the 15 million plus who are receiving government health insurance. It kind of fits with the universal health care narrative (he’s already three-quarters of the way there). And, at the same time, this is an actual manifestation of his deeply-held anti-Trump rhetoric.

Whatever his reasons may be, we can’t let the windfall tax happen. Those who buy health insurance pay enough. Companies need relief. Families need relief. Our economy needs relief.

If you are among us who are privately ensured I encourage you to reach out to your elected officials and tell them to reject S. 7509/A.9509 (Revenue Article VII Bill) Part DD which would impose this sickening new tax.


From the 05 February 2018 Greater Niagara Newspapers and Batavia Daily News

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