New York has always celebrated the entrepreneurial spirit — the corner deli, the local bakery and the neighborhood businesses. Over the last several years, we have witnessed a crisis that has unfolded for these very same local businesses, driven not only by tax rates or utility costs, but by the crippling price of providing health coverage. For local businesses, the cost of health care is no longer a benefit; it has become an existential threat — and the primary culprits are the state’s massive, consolidated hospital systems.
The data is stark. While health insurance premiums are increasing more than 10% for small employers, a rate far exceeding inflation, these increases are merely a symptom of a deeper illness: the growing lack of competition in our hospital markets. Over the last decade, New York’s health care landscape has been reshaped by massive mergers and acquisitions. Independent community hospitals and physician practices have been swallowed by a few gigantic health systems, creating regional monopolies that operate without meaningful regulatory price checks.
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When a small business owner on Long Island or in Westchester, for example, sits down to renew their health plan, they face a market where the providers — the very hospitals and physician groups delivering care — wield disproportionate power. Consolidation has stripped insurers of their bargaining leverage, resulting in dominant health systems that can demand, and receive, astronomical reimbursement rates from commercial insurers.
This loss of competition translates directly into higher premiums for small business owners, who lack the ability to self-insure like larger corporations can. The average monthly cost for a single-coverage “gold-tier” plan in New York City and Long Island is already well over $1,200. With annual increases in double digits, these costs are on track to double within the decade, creating a financial disaster for not only our local businesses, but the communities they serve.
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The impact of health care cost inflation is twofold. First, it forces small employers to make painful choices: increase employee cost-sharing, raise deductibles, or reduce coverage entirely. This damages morale, hinders recruitment, and creates immense financial stress for employees and their families. Second, it shifts the focus of the business owner from innovation and growth to simply surviving the next premium renewal cycle.
It is time to look toward legislative solutions that address the root cause, not just the symptoms of such overwhelming growth in cost. Proposals like those proposed by The Local Business Relief Coalition are necessary steps toward cost control. New York cannot afford to stand by as its small business economy is choked by hospital consolidation and its impact. Protecting these businesses requires serious state action to strengthen enforcement, mandate true price transparency, and implement meaningful price controls on essential, routine services. Until we take seriously the impact of these consolidated hospital giants, New York’s local businesses will continue to suffer.
Kyle Wallach is director of government affairs for the Business Council of New York State.
This article originally appeared on Rockland/Westchester Journal News: NY businesses health care costs | Opinion