News Release - New Research From Rockefeller Institute Examines Financial Challenges New York Faces as it Works Toward Universal Health Care Coverage

For Immediate Release –

June 3, 2009

Media contact: Mark Marchand – (518) 443-5283 / marchanm@rockinst.org

New Research From Rockefeller Institute Examines Financial Challenges New York Faces as it Works Toward Universal Health Care Coverage

Report Identifies Potential Revenue Sources and Savings Options

Albany, N.Y. — New York faces steep financial challenges as it works toward universal health care coverage similar to Massachusetts, but there are some revenue and savings options the state could consider, according to a new report issued today by the Health Policy Research Center at the Rockefeller Institute of Government.

The research, funded by the New York State Health Foundation, was written by Courtney Burke, director of the Rockefeller Institute’s Health Policy Research Center, and Kimberley Fox, a senior policy analyst at the Muskie School of Public Service’s Institute for Health Policy at the University of Southern Maine.

“For states that are attempting universal coverage, each relies on a variety of financing strategies but in each instance Medicaid, a program that is jointly funded by federal, state and in some cases local governments, has been important to these expansions and new sources of funding were required,” Burke and Fox said. “The experiences of two states that are attempting universal coverage — Massachusetts and Vermont — suggest that a state as large as New York cannot realistically achieve universal coverage without relying more heavily on federal Medicaid revenue, lowering the growth rate of health costs, redirecting existing funds, generating new revenues, and using multiple revenue streams such as provider taxes, insurer taxes, sin taxes and possibly employer contributions.”

In addition to finding better ways of utilizing federal Medicaid funding through the existing Medicaid and State Children’s Health Insurance Program and using the administrative and budgeting flexibility available through Medicaid waivers, the authors cited several areas where states could generate funds to expand health care coverage:

The study authors acknowledged that while some new revenue sources, such as some “sin” taxes on products generally considered as unhealthy, have already proven to be unpopular, they could still be considered. Burke adds that cost growth control is important if the state hopes to make financing for coverage initiatives sustainable.

Burke and Fox concluded, “There are reasonable arguments for and against every potential option. For example, if additional federal aid is obtainable, it may require the state to give up some flexibility in designing programs funded with such aid. Raising taxes — or fees or assessments — may have undesirable impacts on employers and individual purchasers of health insurance. Finding savings in the state’s existing health-care expenditures may mean reduced services for some recipients and fewer jobs in some sectors of the health-care industry.

“Even if New York is able to secure funds, the experience of Massachusetts suggests that New York should implement strategies that lower costs.”

In addition to Massachusetts and Vermont, the report analyzes the financing sources for coverage programs in three other states that have made incremental progress toward expanding health care coverage: Colorado, Indiana and Oklahoma.

For a full copy of the report, visit www.rockinst.org.

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About the New York State Health Foundation

Support for this work was provided by the New York State Health Foundation (NYSHealth). The mission of NYSHealth is to expand health insurance coverage, increase access to high-quality health care services, and improve public and community health. The views presented here are those of the authors and not necessarily those of the New York State Health Foundation or its directors, officers, or staff.