Mandating Health Care Coverage

There is a bill in New York’s State Assembly disingenuously titled “Fair Share Health Care Act” that sets a minimum amount that large businesses must spend on employees’ health benefits. The proponents of the bill believe that the answer to the (shamefully) large number of uninsured people in New York (and, indeed, the rest of the country) will benefit from the onerous government sponsored solution that whacks all businesses having over 100 employees with a mandatory $3 per hour assessment (read tax) that will “cover the costs to the public health care system of caring for their work force and their dependents”. The Working Families Party is largely behind the initiative that has support on both sides of the aisle. That bipartisan support, however, should not detract from the misguided motives driving the bill.

There is plenty of empirical evidence particularly outside the US which shows that mandating health care coverage, something Massachusetts has recently initiated, results in neither universal coverage nor quality health care. Even a cursory look at Canada’s socialized health care system and Britain’s National Health Service shows that both systems fail to deliver timely care, particularly in acute cases. Yet the Workin g Families site and New York’s bill promise to do just that using the “pool” of funds created by the cess to provide those currently without health coverage.

For hotels (any 300 plus room hotel is almost certain to have more than one hundred employees) the bill may seem anodyne on the surface as most such hotels (outside New York City – where employees are covered by union benefits) provide health coverage in any case. The issue though is the threshold both in terms of the rate and the number of employees. Many companies can and do obtain premiums below the $6120 annual amount the state intends to force them to spend on health expenses. The notion that bureaucrats sitting in Albany can expend the “surplus” in a sure to be botched social engineering experiment is sure to be a damper for businesses, current and the still to be born.

In the rush to provide “universal” health care, policy makers ignore respected surveys that have repeatedly shown that many young people voluntarily decline to purchase health care even when they clearly have the means to do so. Politicians behind yet another business killing initiative should stop and ponder if their goal of health care for all should instead be one of health care for all who want it. Hotels ought to band together to fight this initiative.

Published by

Vijay Dandapani

Co-founder and president of a New York based hotel company for 24 years. Grew the firm to five hotels in Manhattan and also developed a greenfield project at MacArthur airport, New York. Speaker at numerous prestigious forums including Economy Hotels World Asia, Lodging Conference, NYU, Columbia University Real Estate Roundtable, Baruch College's Zicklin School and ALIS. President and ceo of New York City Hotel Association since January 2017.

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