Rising Costs For Families And Businesses Have Left New York’s Health Care System In Critical Condition

Legislative column from Assembly Minority Leader Brian M. Kolb (R,I,C-Canandaigua)
July 17, 2009

The past few weeks have seen a flurry of activity as the issue of health care reform has commanded center stage on the national policy agenda. Many cash-strapped state governments have already been out front on this issue, trying to develop legislative remedies that reduce rising health care costs while ensuring the continued delivery of, and access to, quality care.

All this activity is understandable given that health care is a more than $2 trillion industry that touches nearly every facet of the American economy. As noted by the National Conference of State Legislatures (NCSL), a bipartisan policy organization serving legislators and leaders in the 50 states, a federal study revealed that health care spending in the United States in 2006 increased 6.7 percent to $2.1 trillion, or $7,026 per individual. The health care portion of our national gross domestic product was 16 percent, somewhat higher than it was in 2005.

Without question, health care is big business – it also means big costs for both the private and public sectors. Also indicated by the NCSL, in 2005, businesses in the United States spent approximately $596.5 billion on health benefits, a major increase from the $399.6 billion spent in 2000. These benefits are significant cost drivers for businesses and accounted for 44 percent of employer benefit spending in 2005, up from 42 percent in 2000 and a mere 14 percent in 1960. It also was estimated that state governments spend between 28 and 35 percent of their annual budgets on health care costs. These expenses will only continue rising unless comprehensive reforms are enacted that reduce prices for families, businesses and the public sector, whose costs are ultimately borne by the taxpayers.

Unfortunately, the current debate over health care reform has fallen along long-standing partisan and ideological fault lines that, in the past, have prevented an open, honest discussion of the real solutions needed to fix the problems that continue to plague the system.

It is time to get back to “first principles” when it comes to health care. I believe we need to improve our health care system so it puts patients first, lowers costs for consumers and gives businesses the flexibility – and creative incentives – needed to continue providing coverage for their employees, including cafeteria-style, individualized choices like catastrophic coverage. Doing so would ensure our health care system remains affordable, accessible and a world-leader in developing innovations that help people live longer, healthier lives. What we do not need, is a government-run, government-dominated health care system, a huge new bureaucracy imposing more mandated costs on businesses and families, or consumers being forced to leave their doctors and existing coverage. Those are not solutions – they are non-starters.

Make no mistake: real health care reform is necessary, nowhere more so than right here in New York State, where costs have steadily climbed for consumers and businesses. According to the NCSL, which reported on health care costs in all 50 states from 2004 to 2006, the average health insurance premium for a New York resident rose from $3,858 in 2004 to $4,537 in 2006. Families did not fare much better, as the average cost of a health insurance premium for a family increased from $10,397 in 2004 to $12,228 in 2006.

While this price hike mirrors a national trend of premiums increasing by an average of 8.8 percent in 2007, the increases in New York were almost $200 higher for individuals – and nearly $500 for families – than the national average for 2006, which stands to reason given that our tax, energy and business costs are also among the nation’s highest.

Our Conference has been hard at work, listening to families and businesses, developing real solutions that control health care costs without sacrificing coverage or access to care. Our Small Business and Manufacturing Task Forces have been addressing these concerns from businesses who are struggling under the weight of mandated services and state government-imposed costs. Here are just a few of the bi-partisan initiatives we are advancing to get New York’s health care system out of critical condition:

Sole Proprietorship Health Care Deductions: Authorize a 100 percent deduction for medical and dental care (Assembly Bill A.5799);

Tax Credit for Premiums Paid: Allow a tax credit equal to 15 percent of the cost of health insurance premiums paid by small businesses for their employees (Assembly Bill A.7696);

Health Savings Accounts: Permit “Freedom Policies” to foster the development of Health Savings Accounts to provide a choice for citizens seeking innovative ways to manage their health care costs (Assembly Bill A.3001); and

Reduction in Healthy-NY’s “Crowd-Out” Provision: The Healthy-NY program was created to help small businesses, sole proprietors and individuals acquire affordable health insurance. However, many businesses and individuals are not eligible because current rules prohibit them from having provided or possessed health insurance in the past 12 months. In order to help more people take advantage of this program, the waiting period would be reduced from 12 to six months (Assembly Bill A.1158).

Yes, New York State needs health care reform. However, it must be real reform based on a holistic approach that puts patients first and reduces costs for consumers and businesses. Those principles, not partisan politics, need to drive and shape this important debate.

As always, constituents wishing to discuss this topic, or any other state-related matter, should contact my district office at (315) 781-2030, or e-mail me at kolbb@assembly.state.ny.us.