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January 15, 2019

De Blasio Offers a Health Care Splash, but Little Cash

 

New York City Mayor Bill de Blasio recently made a health care splash, but he offered little cash. 

De Blasio announced the creation of NYC Care, which will provide comprehensive health care to an estimated 600,000 city residents, including undocumented immigrants. 

“Health care is a right, not a privilege reserved for those who can afford it,” de Blasio said. “While the federal government works to gut health care for millions of Americans, New York City is leading the way by guaranteeing that every New Yorker has access to quality, comprehensive access to care, regardless of immigration status or their ability to pay.” 

The mayor said the city is providing up to $100 million for this program.  But that will only be a down payment, and not a very big one.  

Divide $100 million by 600,000 and you get $167 per person per year. By contrast, the Manhattan Institute points out that New Yorkers spent on health care an average of $6,056 per person in 2015.  

Of course, many of the uninsured are healthy and may never access the program. Even so, $100 million won’t go very far, and for at least three reasons. 

The “woodwork effect” — When the government provides some highly valued good or service for free, or close to it, people come “out of the woodwork” to take advantage of it. New York City will become a magnet for uninsured non-residents who have very high medical bills.  

The “crowd-out effect” — Some small employers who are struggling to provide health coverage to lower-income workers will decide that NYC Care is a better option for both employees and the employer and cancel that coverage.  

That move might make good financial sense. If those employees have very high deductibles, they are paying out of pocket for most of their routine care anyway. So why not let them rely on NYC Care? It would be a win-win for the employee and employer. The only losers would be New York taxpayers.  

In short, the pool of beneficiaries will likely be larger than anticipated.  

The “free-rider effect” — Finally, de Blasio and his wife wanted to stress NYC Care will provide comprehensive care, including mental health services. They will soon find out how much medical care people can use when it’s free. 

Mental health services are certainly important, but they can be easily abused. It’s easy to know when a broken bone has healed, a broken mind is a bigger challenge.  

Or how about gender-reassignment surgery? A city as socially progressive as New York—and de Blasio—is unlikely to refuse gender-reassignment surgery, along with the ongoing drug and health care costs. 

The comprehensive care de Blasio says he wants to provide is very expensive, which is one reason Obamacare premiums are so high. New York City taxpayers are about to find out just how expensive “free” medical care can be.


 

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