Memo To NYC – If Health Care’s Expensive Now See What It Costs When Bill de Blasio Makes It Free

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Bill de Blasio has announced that health care insurance in New York City is now going to be free to all regardless of immigration status. To which the correct response is that if you thought health care was expensive now then wait and see what it costs when it’s free. For there really isn’t any magic wand to be waved over what health care does cost. And increasing insurance coverage isn’t the way to slice the slack out of the system anyway. It just isn’t true that people consume less of something when the price goes down:

New York City Mayor Bill de Blasio announced Tuesday that all residents, regardless of citizenship status or ability to pay, will be guaranteed comprehensive health care. The recently re-elected Democratic mayor of the country’s largest city announced on MSNBC Tuesday the government will pay for any and all resident’s comprehensive care, including those who aren’t eligible to receive comprehensive Medicaid coverage. The city’s more than 600,000 uninsured residents, including its more than 300,000 undocumented residents, are included in this de Blasio guarantee.

So, how much is all of this going to cost then?

That program, NYC Care, will launch this summer and will cost at least $100 million annually at full scale, the city said.

It is to laugh. That would indicate that health care insurance runs about $166 per person per year – $100 million to provide it for 600,000 people is about that amount. And if health care insurance did cost $166 per person per year then it wouldn’t be a problem, would it? No, not this plan wouldn’t, but we wouldn’t need a plan to solve the problem, would we?

Clearly some goodly amount of money must be coming from somewhere else to pay for this. But there’s another point to be made. If health care is now free in New York City then why would the other 7.5 million residents carry on paying tens of thousands a year for their own health care insurance? Well, quite, some portion at least of them won’t will they?

Sure, those gaining the sort of insurance reserved for the really rich on Wall Street or members of public unions will continue to get that private kind. But unless this public option is really, really, terrible there’ll be an awful lot of people who decide that dropping the insurance plan and relying upon the city will do just fine. And there will be any number of employers who are happy enough to oblige and drop job related coverage in return for a modest pay rise.

Yes, the law tries to limit that sort of thing but still, it’ll happen.

So, this looks like reasonable advice:

“People from all over the country are going to flood into New York to get their free health care,” Thiessen said, adding that he had advice for taxpayers in the country’s largest city who will foot the bill. “Move over to Hoboken,” Thiessen said, adding that skipping town to neighboring New Jersey will avoid the higher taxes that he predicted would come.

If you think health care’s expensive now you wait and see what it costs when it’s free.