The powerful lobbying forces for New York's hospitals and healthcare workers last week launched what they describe as their boldest and most ambitious effort yet, staking out new ground in the evolving state-by-state march toward universal health insurance.
The Healthcare Education Project-a joint effort between the Greater New York Hospital Association and Local 1199 of the Service Employees International Union-is proposing a sweeping new law intended to dramatically expand health insurance coverage to the state's 3 million uninsured residents. The Healthcare Equity & Access Law for New Yorkers, or HEAL New York, would be fueled and funded by levying a tax on employers who do not provide health insurance for their workers.
Separately, in a direct payment boost for hospitals, the initiative would create a $1 billion Healthcare Quality Bond Act with two purposes in mind. Part of the proceeds would be used to directly improve hospitals' access to capital with funding going to projects-particularly information systems-which improve patient safety and the overall efficiency of the healthcare system. Some of the money would also provide a kind of hospice care for "unnecessary hospitals" by helping them to "ease out of business by picking up their debt load," said Kenneth Raske, president of the GNYHA. Funding for the bond piece of the initiative would come exclusively from bond sales, not from revenue from the employer assessment.
"This will have a material impact on the bond market. It becomes an insurance program for an insurance program," Raske said.
The initiative does not represent the first effort nationwide to spur some kind of universal healthcare coverage, but it does perhaps denote the first time hospitals and healthcare workers are the prime movers. Unlike the law passed in Maine last year that established a quasi-public state insurance program for the uninsured and like the law passed several months later in California, HEAL New York would establish a "play or pay" system for employers. Under the proposed law, which must be approved by the state Legislature and governor, employers could choose to provide health insurance for employees or pay an annual assessment-$3,000 per employee. Small businesses would be assessed on a sliding scale, but the New York law would offer far fewer exemptions than the California bill, which goes into effect in 2006 (Oct. 13, 2003, p. 6).
"The entire issue of the working uninsured is a hot button in more and more states," said Bruce Vladeck, a professor at Mount Sinai School of Medicine in New York and former administrator of HCFA, predecessor to the CMS. "It will be interesting to see if it translates to the national campaign this year."
The seven-point proposal aims to build an equitable system that does not penalize employers that provide insurance to their workers. It also aims to indirectly help hospitals and county governments, which like employers who pay for insurance, find themselves bearing the burden of costs of the uninsured. Uniquely in New York, county governments split the Medicaid costs of hospital inpatients with the state. The counties' share of the burden is somewhat less for nursing homes.
The proposal's ultimate goal is to provide employers with a strong incentive to provide coverage and does not rely on revenue from the proposed business tax to get off the ground.
"We would be ecstatic if all of the employers provided health insurance rather than pay a penny of assessment," said David Rich, senior vice president of government affairs for the GNYHA.
That said, if all employers were to opt out of "playing," the initiative would generate $2.8 billion, Rich said. Revenue would go toward helping to expand insurance coverage and relieving the tax burden for employers, including a state tax credit equal to 20% of employer health insurance premiums for businesses with fewer than 25 employees.
"It's called the Healthcare Equity law because those employers who are doing the right thing are also paying taxes to deal with the consequences of those who are not providing healthcare for their employees. So we would like to reduce some of those taxes," Rich said.
HEAL New York would also increase insurance coverage by expanding eligibility for the state's Family Health Plus program for the working poor and by allowing employers to buy into the program at a reasonable rate. It also provides safeguards for Medicaid patients.
Though the proposal may sound brazen, New York's healthcare lobby has an impressive track record of mounting multimillion dollar grass-roots media campaigns to ensure that hospitals get a significant piece of New York's shoestring budget. Describing the initiative as the biggest yet, Raske said in conjunction with the state budget proposal, the lobby would spend whatever it takes-likely millions of dollars-to sway Albany.
"This is the biggest, boldest platform of healthcare reform that has been planted on any table in the United States," he said.
In the weeks leading up to the launch, officials at the GNYHA and the SEIU presented their plan to key opinion leaders throughout the state, including the governor's staff, Raske said. "I think everybody wants to study it," he said.
Vladeck was given a sneak preview. Still, he said he couldn't guess whether it would fly. "I think the pressure to give some relief to county governments is pretty intense at the moment and this is a way to do it without a net incremental cost to the state," Vladeck said. "I'm sure the business council and other business groups will respond pretty negatively to it. It won't be a walk in the park by any stretch of the imagination."
Without more details on the plan, Empire Blue Cross and Blue Shield officials could not comment, said spokesman Karen Early. Two years ago, Empire was the beneficiary of the powerful healthcare lobby when the GNYHA and the union stepped aside to allow its conversion to a publicly traded for-profit. In turn, proceeds from the conversion directly benefited hospitals and healthcare workers.