Manny's Law

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Manny's Law is a New York law (effective Jan. 2007) that conditions state funding to hospitals on their termination of overcharging the uninsured who earn less than three times the poverty level. Its citation is NY CLS Pub Health § 2807-k.

This new law probably protects far more than half of all hospital patients in New York. These patients cannot be charged more for medical care than the hospital would charge an insurance company ("highest volume payer"), Medicare or Medicaid. This new law also prevents aggressive collection practices, such as foreclosing on someone's home.

Hospitals that fail to comply will lose $850 million in state funds for charity care. For non-emergency cases, a proposed regulation would limit application of this law to those patients who use their local hospital.

This law should discourage health insurance companies, which are oligopolies, from continuing to force or persuade hospitals to overcharge the uninsured. Insurance companies like hospital overcharging of the uninsured because it drives more people to buy full insurance.

With this new law, there should be less economic pressure to buy low-deductible insurance, and there should be an increase in self-paying patients in New York. There is a risk that hospitals will continue to overcharge the uninsured, particularly those above three times the poverty level. But many patients below the threshold opt should now opt for self-payment rather than costly insurance premiums.

Libertarian think tanks, such as the Ludwig Von Mises Institute and CATO Institute and perhaps Heritage, support oligopoly and monopoly power by hospitals and others. But abuse of monopoly power by hospitals in the form sham peer review to impose exclusive contracts can occur.