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Reduce Healthcare Costs

The Issue:

Across the nation, healthcare costs are soaring. Premiums alone have risen dramatically, with MACNY members reporting premium increases between 20 percent and 35 percent in recent years. These continuous increases in healthcare costs come at a time when manufacturers are in no position to absorb them. Rate increases force New York employers to scale back benefits and pass on higher costs to their employees.

The rising cost of healthcare in the United States cannot be halted overnight. Innovative reforms are needed to merely decelerate double digit cost increases, let alone halt them altogether. MACNY therefore encourages lawmakers to truly examine the additional expenses generated by frivolous mandates before voting them into law.

If New York State does not curb the costs of providing healthcare, many New York manufacturers will be unable to provide affordable insurance for employees, leaving an increasing number of New Yorkers to shoulder healthcare costs, or simply go without insurance. With over 2.5 million uninsured residents in 2005, New York cannot afford to tolerate this. MACNY will continue its efforts with local stakeholders to make reforms that lower Central New York’s healthcare costs while increasing quality and access.

In Albany:

MACNY supports measures that:

· Stop runaway mandates and measure costs.

· Require health insurance mandates to undergo a cost-benefit analysis by the Insurance Department or a special commission prior to legislative action.

· Support the maximum use by employers of Health Savings Accounts by allowing purchase of a consumer-driven health insurance plan as put forth in Freedom Health Plans.

· End off-loading of the costs of general health programs onto health insurance premiums.

Talking Points:

· New York employers contribute, on average, 80 percent of the premium for employer-based, family health insurance coverage. In the United States, only Michigan and New Jersey employers average greater contributions to family health care premiums. Meanwhile, New York has the fourth highest family premium for employer-based health insurance, averaging over $8,300 in 2004. This makes the average burden on a New York employer over $6,600 per employee.

· New York’s state government spent over $44 billion in 2003 on healthcare, more than any other state in the union. Putting this in perspective, this is approximately 12.46 percent of total U.S. state government expenditures on healthcare, even though New Yorkers comprise less than 6.5 percent of the United States population. These expenses are passed on to New York residents and businesses in state taxes, reducing personal disposable income and creating an unfavorable business climate. Reducing healthcare expenses is therefore crucial to cutting taxes for New Yorkers.