It was easy to predict how liberal New Yorkers would react to Mayor de Blasio’s announcement that the city would begin providing free health care to the Big Apple’s uninsured. The mayor’s supporters cheered this as a great leap forward for public health, and they had locked and loaded their responses to criticisms from those of us who worry about profligate, overreaching government.
The program, dubbed NYC Care, wouldn’t be too expensive, defenders insisted, and, in fact, would save the city money in the long run. And besides, the cost doesn’t matter — what matters is that this program will improve the health of the city’s neediest residents.
There was only one problem: None of this is true.
We don’t need experts to tell us that giving away free health care will cost more money than it saves — that’s just common sense.
We could use experts, however, to tell us the real impact a program like NYC Care would have on a population’s overall health. Fortunately, experts have already done that. Unfortunately for the mayor, the results aren’t in his favor.
In 2008, well before President Barack Obama’s Affordable Care Act expanded Medicaid nationwide, the people of Oregon decided to do just that, passing a ballot initiative that used a lottery to give Medicaid to 30,000 low-income adults. This decision gave birth to the Oregon Health Insurance Experiment, which sought to determine exactly what impact, if any, expanding Medicaid would have on a population’s health.
More than 12,000 people participated in the study: Around half were given Medicaid, while the other half remained uninsured. After two years, the study’s authors found that those who received Medicaid used significantly more health-care services than those who didn’t, and they had lower out-of-pocket costs. They also reported better mental and physical health.
All good, except for one thing: The study found no significant difference in health outcomes between the two groups. Despite making much greater use of health-care services, after two years participants who received Medicaid looked the same as their uninsured counterparts when it came to measures like blood pressure, cholesterol, depression and diabetes.
New York City’s uninsured population consists primarily of illegal immigrants, young people who choose to go without insurance and those who can’t afford ObamaCare but are ineligible for Medicare or Medicaid. That’s about 600,000 people, which the mayor plans to cover with $100 million a year.
For those keeping track at home, that’s $167 per person. That doesn’t come close to what health insurance in the city is estimated to cost (around $5,000 on average) or what New Yorkers actually spend on health care ($6,056 per capita, in 2015). Unsurprisingly, the mayor has already signaled his intention to cast aside the proposed budget, promising to “put the money in to make it work,” a statement that ought to send shivers up the city’s collective spine.
Just like in Oregon, NYC Care will almost certainly lead to an increase in health-care utilization and may provide a sense of security to the previously uninsured. There is, however, one crucial difference: At the end of the day, Medicaid is still insurance. Despite its shortcomings, it requires a degree of cost sharing and has other mechanisms in place designed to minimize waste.
Not so with NYC Care, which simply promises a wide range of free health services.
The mayor has made it clear that he is willing to spend whatever it takes to make NYC Care a success. Thanks to the Oregon Experiment, we know the odds of success are relatively low. For the sake of the city’s taxpayers as well as its uninsured, let’s hope he reconsiders.
Tim Rice is the deputy director of health policy at the Manhattan Institute.