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Study looks at health care reform

Lack of action on health care reform would hurt New York small businesses more than any reform proposal being debated, a report released Thursday by the New York State Health Foundation and Small Business Majority concludes. 

The Health foundation is a statewide independent non-profit formed as part of Empire Blue Cross Blue Shield’s 2006 conversion from a non-profit to a publicly traded company. The Small Business Majority, a non-profit with offices in New York City, Washington, D.C., and Sausalito, Calif., focuses on policy issues affecting small business owners.

The organizations commissioned Massachusetts Institute of Technology economist Jonathan Gruber to do the New York report. The study compares the effects of three reform schemes—shared responsibility, market reform and single payer—over a 10-year timeline and weighs their costs against the cost of maintaining the status quo.

Small businesses in New York would lose profits and see their workers compete for fewer jobs under every scenario considered, but would suffer the most if no reform is enacted, the study found.

Shared responsibility models similar to plans currently debated in Congress that would combine guaranteed access to coverage, expanded public programs to help cover the poor and give premium assistance to working poor families would cost small businesses some $1 billion over 10 years, the least in lost profits of any alternative, the study found. A market reform model in which changes to the state’s insurance regulations would be the key reform tool would cost small business owners $1.3 billion in lost profits.

A government run single-payer system would eat into small-business profits the most, the study found, costing small companies $5.2 billion in lost profits versus $2.3 billion in profits lost if the status quo were to continue.  But a single payer system would do more to protect workers’ wages than any alternative.

By Gruber’s calculations, employees would see wages shrink by $4.2 billion under a single-payer system, while the state would lose 5,000 jobs.

Under the two shared responsibility models the economist looked at, workers would see their pay shrink by an average $12.5 billion and the state would have lost 2,000 jobs. A market reform model would shave $27.1 billion off workers’ wages and cause 7,000 jobs to evaporate.  Under a no-reform scenario, New York workers would lose $54.2 billion in wages by 2018 and would compete for 10,000 fewer jobs.
“These findings underscore the urgent need to reform our health care system and to do so quickly. New York’s small businesses cannot afford the status quo,” New York State Health Foundation president and CEO James Knickman said in a statement.

(c) 2009 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail rbj@rbj.net.



  1. I have read a lot on Single Payer, actual studies, http://www.calnurses.org/research/pdfs/ihsp_sp_economic_study_2009.pdf, and the information provided by this author does not reflect that work.

    It is more likely that the so-called study cited by this author was intended only to distract from the truth.

  2. I searched for the study mentioned by the author and found a NY Times article

    in which it said, “…As a result, Mr. Gruber reached the opposite conclusion of the insurance industry.”

    He said that premiums would actually decline for individuals purchasing and families purchasing insurance, either with or without the government subsidies. Mr. Gruber’s analysis did not look at employer-sponsored plans or group plans.

    “If you literally take the data from the Congressional Budget Office you can see that individuals will be saving money in a nongroup market,’’ he said.

    I tend to agree with the position that the NY Times article takes, but it does not reflect the depth of the benefits that would be provided by a Single Payor healthcare system.

    If you read the .pdf at http://www.calnurses.org/research/pdfs/ihsp_sp_economic_study_2009.pdf you will come to understand that such a system has the potential — in and of itself — to be the biggest economic shot in the arm America has ever had.

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