NCPA - National Center for Policy Analysis


December 10, 2009

New York's individual health insurance market is not often held up as a national model, and for good reason.  It's the most regulated, most expensive and as a result, one of the smallest in the country, with only a few costly health plans available, say Stephen T. Parente, a finance professor at the University of Minnesota's Carlson School of Management; and Tarren Bragdon, a Manhattan Institute Adjunct Fellow and CEO of the Maine Heritage Policy Center.


  • Since New York policymakers inflicted costly regulations on insurers in 1994, enrollment in the individual insurance market has plummeted by 96 percent.
  • Current prices are staggering; in New York City, the cheapest individual plan costs $9,036 a year for a single person and $26,460 for a family.
  • In contrast, the Congressional Budget Office (CBO) estimates the average national family premium at $12,000 to $15,000 a year.

Yet both the House and the Senate health reform bills would make the rest of America look more like New York's dysfunctional market -- and then force New Yorkers to foot a larger share of the trillion-dollar cost.  Only five states now have New York-style insurance regulations, but both bills force those rules on all 50 states and then force people to buy coverage or face tax penalties.  Think about it: If 45 states don't regulate insurance like New York does, there is probably a very good reason.  And there is: These regulations drive up costs and limit choices, say Parente and Bragdon.

Adding insult to expensive injury, Congress also plans to expand Medicaid coverage.  Here, too, New York is an example of what not to do, say Parente and Bragdon:

  • The Empire State has the most expensive Medicaid program in the country -- spending as much as Texas, Florida and Illinois combined.
  • New York's Medicaid program is the fourth largest among all the states as a percentage of the population enrolled, yet the state's rate of uninsured ranks 24th highest in the country.
  • Of the 26 states with a lower rate of uninsured than New York, only two have a larger share of residents on Medicaid.

Source: Stephen T. Parente and Tarren Bragdon, "Spreading New York's bad medicine," New York Post, December 9, 2009.

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