New York State Taxes Sick People
Submitted by DavidE on Sun, 08/16/2009 - 1:02pm
I bet you didn't know that the State of New York taxes you for seeing a doctor. Or going to a hospital. Or a clinic. And the tax isn't small. As of April 1, 2009 it's a whopping 9.63%. About the only people who escape this tax are those on Medicare or Medicaid. Sure, the State calls it a "surcharge," but a tax by any other name is still a tax. The reason you've never seen this tax on seeking medical help is that it's usually hidden in what you pay — the same way that gasoline taxes are hidden. New York's doctors, hospitals and clinics are required to turn over 9.63% of what you'd pay without the surcharge, so they just add it to your bill before you see it.
Like you, I had no idea this was going on. I only tripped over it when one of my providers, Memorial Sloan-Kettering, changed its billing system to move the surcharge out from behind the curtain. It now shows up as a separate line item the way sales tax does. Finding it bizarre that the State thinks it's reasonable to levy a special tax on sick people, I looked into it. Sure enough, the NYS Department of Health's website spells it out pretty clearly. See, for example, the letter to "Dear Payor/Provider" of April 1, 2009 in which the new, increased surcharge is announced.
Still not willing to believe it, I wrote to the e-mail address given at the bottom of the page to see if I understood correctly. After about a month of being a pest trying to get someone to respond, I got an e-mail from Michelle Levesque, Bureau of HCRA Operations and Financial Analysis, NYS Department of Health. She explains:
David,
The surcharge is required to be assessed by designated HCRA [NYS Health Care Reform Act] providers (as of 10/1/00 they are : General Hospitals, Amb-Surg, and D&TC) on certain services that they provide. Note: There are exemptions (ie Medicare covered services are not surchargeable). The surcharge is 9.63% for services on and after 4/1/09.
The surcharge is required to be assessed by designated HCRA [NYS Health Care Reform Act] providers (as of 10/1/00 they are : General Hospitals, Amb-Surg, and D&TC) on certain services that they provide. Note: There are exemptions (ie Medicare covered services are not surchargeable). The surcharge is 9.63% for services on and after 4/1/09.
The surcharge funds the "Public Goods Pool" which is a fund that is set aside to fund necessary programs to assist the public such as preserving rural health care, funding poison control centers, and substantially funding the Child Health Plus insurance program for uninsured children.
Consumers may have a responsibility to pay the surcharge depending on the policy they have with their insurance carrier (ie deductible, 80/20 coverage). For example, if a person changes insurance carrier, or if their carrier changes what they cover, they might start seeing a surcharge where they didn't before.
If you would like to discuss details on how/why it appears on your bill, please call me or another HCRA representative at 518-474-1673.
Additionally, you may go to our website to find out more: http://www.health.state.ny.us/nysdoh/hcra/hcrahome.htm
Thank you,
Michelle
What she means when she says "[c]onsumers may have a responsibility to pay" is that they might actually see the charges. Of course they have to pay. The money's got to come from somewhere, right? And you can bet the "HCRA providers" and the insurance companies aren't just going to eat it. The money comes from people who seek medical help in New York — either directly or in the form of increased insurance premiums.
Now I'm all in favor of "preserving rural health care, funding poison control centers, and substantially funding the Child Health Plus insurance program for uninsured children" and Michelle is just administering what the Legislature decided was best for us. But is it really right, sensible or moral for the State to pay for these services by taxing the sick? This is an outrageous, sleazy system: The sicker you are, the more the State takes out of you. Just the sort of system you'd expect a thoroughly dysfunctional Legislature to impose.
I applaud Memorial Sloan-Kettering for moving this hidden sick-people tax out into the open where patients can see it. I wish all of New York's health care providers would do the same. If that happened, even our pitiful excuse for a Legislature might be motivated to do something sensible.
David Ehnebuske
