NCPA - National Center for Policy Analysis


November 17, 2009

New York's state Senate Democrats are considering up to $1 billion in new taxes on medical services as an alternative to health care spending cuts in Governor Paterson's deficit reduction plan, according to the New York Fiscal Watch (NYFW).

Such a tax would add to what is already a heavy and fast-growing burden.  Using projected revenues for 2009-10, New York's current array of special taxes and fees under the Health Care Reform Act (HCRA) includes:

  • $2.242 billion in surcharges on health care providers.
  • $1.165 billion from the covered lives assessment on health insurance policies.
  • $306 million in hospital assessments.
  • $131 million from a newly enacted tax on non-profit HMOs.

All of which comes to $3.8 billion -- up $1.4 billion, or 56 percent, in just the past four years.  Collections from the covered lives assessment alone have nearly doubled since 2005-06, says NYFW.

This year, in fact, health care taxes and fees will total at least $1 billion more than total receipts from New York's principal general business tax, the state corporation franchise tax, says NYFW.

Source: E.J. McMahon, "Higher Health Taxes in NY?" New York Fiscal Watch, November 16, 2009; and Fredric U. Dicker, "NY Eyes $1B Tax Slap on Health," New York Post, November 16, 2009.

For NY Fiscal Watch text: 

For NY Post text: 


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