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Bill number A4738, New York Health Act – Is the 3rd time really a charm?

Author: Melissa Switzer 

In the case of a single payer “Medicare for all” plan in New York State, it might very well be.   NYS is in the home stretch to enact a single payer system for all New York residents. The New York State Assembly passed bill number A4738, New York Health Act.

This act makes all New York state residents eligible to enroll in a single payer system, regardless of age, income, wealth, employment or other status. This proposal would provide comprehensive health coverage to all who enrolled. There would be no copays, no deductibles and no network restrictions. This plan would cover outpatient and inpatient medical care, primary and preventive care, prescription drugs, laboratory tests, rehabilitative, dental, vision and hearing.

Versions of this bill have been passed in the Assembly both in 2015 and 2016, but never got past the New York Senate.   The 2017 version of the bill has been introduced into the Senate and is currently at the committee.   From here, the Senate will need to debate and vote on the measure before being sent to Governor Cuomo to sign or veto.

Free health care! Sounds great, right? Not so fast.  Although there will be no traditional methods of cost sharing for your health plan, you will still shoulder some of the cost to help fund this system. A proposed progressively-graduated payroll based premium is included in this bill split between employer and employee.

  • Employers would no longer provide premium contributions to private insurances. They would pay a proposed payroll tax based on their employees’ wages totaling 4.5% in addition to their current Medicare tax of 1.45%
  • Employees would contribute to this fund by a proposed payroll tax of 3.3% in addition to their current Medicare tax of 4.45%.   This would in theory replace their premium charges and all traditional out-of-pockets expenses.
  • Self Employed individuals would cover 100% of payroll tax costs.

In addition to the above payroll tax, the bill also allows for a progressively-graduated premium based on other taxable income such as interest, dividends and capital gains.   Funding will also come in other forms, such as federal funds and grants.

This bill changes the health insurance industry for New Yorkers as we know it. It essentially replaces private insurance and traditional ways of obtaining insurance.   What does this mean for the thousands of workers in the insurance industry in Western New York area? It is too early to know. However, the bill includes a provision that will provide funding to retrain and assist in job transition for any individual displaced as a result of this new law.

There are more questions than answers at this point. Even if this bill makes it through the Senate, there will be a significant amount of time before the wrinkles are smoothed out and it is implemented.

Will the 3rd time really be a charm or will this bill ultimately fail in the senate again and simply become a case of déjà vu?

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Melissa Switzer is Vice President of Sales at Choice Employee Benefits Group. CEBG is an independent broker servicing the WNY business community since 2000. Melissa is a lifelong resident of WNY. When she isn’t consulting on employee benefits, she is raising two little boys with her husband in Hamburg.

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