For more than three decades, New York lawmakers have debated the New York Health Act, a bill that would create a single-payer system by eliminating private health insurance statewide. Public support remains strong, and most legislators have voiced approval in public. But behind closed doors, many harbor reservations—and for good reason. The current proposal would wipe out private insurance overnight, potentially costing 50,000 jobs in the insurance industry and leaving healthcare providers uncertain about reimbursement rates.
Those concerns are real but not insurmountable. A redesigned implementation, drawing on European models, could address them. France and Germany have achieved universal coverage without abolishing private insurers. In both countries, roughly 30 percent of costs are covered by patients and supplemental insurers under what’s known as the Bismarck model. Insurers don’t vanish; they adapt. Payment rates are standardized and transparent, and surprise billing is eliminated. This approach doesn’t call for a government takeover but establishes a mandated floor, with a private market competing above it. That distinction is crucial for building political consensus.
Leveraging Existing Infrastructure
New York already has the building blocks for such a system. Medicaid negotiates standardized rates for a defined set of services for a portion of the state’s population. The Bismarck model doesn’t require creating a new mechanism—it extends what already works. Instead of negotiating everything at once, New York could start with the emergency, preventive, and inpatient services it already handles through Medicaid. Those rates, provider relationships, and administrative systems exist. The only change is expanding this baseline to all residents, not just those eligible for Medicaid.
Everything else—dental, vision, prescription drugs, and elective care—would remain with private insurance initially. The state would cover 70 percent of baseline costs, matching France’s minimum reimbursement rate, while insurers compete for the remaining 30 percent. Current Medicaid recipients would remain fully covered. The financing mechanism already exists in the New York Health Act’s payroll contribution structure. France and Germany fund universal coverage through payroll contributions of 12 to 14 percent; New Yorkers currently pay an average of 6.9 percent of salary in premiums, with employers covering three to four times that. Redirecting a portion of existing premium payments into a common pool is a transfer, not a new cost.
Immediate Benefits and Strategic Phasing
From day one, no patient would face a complete coverage gap—everyone would be at least 70 percent covered. Prior authorization and surprise bills would be eliminated. Providers would have predictable, standardized reimbursement rates from the start. Insurers would lose revenue on baseline procedures but retain a competitive market above the floor. The pharmaceutical industry, dental, and vision providers are deliberately excluded from the first phase. That’s not an oversight; it’s a strategic decision. Opening too many fronts at once risks failure. Building a targeted baseline first would establish institutional trust and financial data for future expansion.
After two years of real claims data, New York would have actual numbers on costs and coverage. Prescription drugs could then be extended to the full population at the same 70 percent starting point—generics first, then brand-name drugs where no generic exists, exactly as Medicaid covers them today. Coverage percentages would be adjusted based on financial sustainability, as France and Germany do annually. Dental and vision would follow. By year five, the state could cover its entire population across the full spectrum of medical services. Every stakeholder—providers, pharmacies, patients, and insurers—would have time to adapt. There would be no cliff, no chaos.
Political Cover and Practical Impact
This phased, Bismarck-inspired approach gives reluctant lawmakers the political cover they need to vote yes. It avoids the specter of a government takeover and protects jobs in the insurance industry. For low-income New Yorkers who earn just above Medicaid eligibility thresholds, losing coverage when their employer doesn’t offer insurance would no longer mean falling off a cliff. Under this model, leaving Medicaid means private insurance fills the remaining 30 percent, and the floor follows them.
The benefits are immediate and tangible. No patient fully defaults, surprise bills disappear, and providers have predictable payments. The uninsured rate, which held at 8% in 2025 but showed troubling signs of child coverage losses, could be addressed directly. New York’s approach could serve as a national model, especially as other states grapple with similar challenges. The state already has the infrastructure; it just needs the political will to implement it smartly.
This isn’t about a radical overhaul—it’s about extending what works. By borrowing from proven European systems and phasing in coverage, New York can lead the way to universal healthcare without the disruption that has stalled reform for decades.
