March 16 · Soft Secession
New York City Already Has a Public Option for Health Insurance. A 2002 Memo Is the Only Thing Keeping It Small.
I started with a simple question: could a city or state build its own public health insurance company?
The idea isn’t as radical as it sounds. Large employers self-insure all the time. Once an organization is big enough, it makes more financial sense to pay medical bills directly than to keep handing money to an insurance company that takes its cut before passing anything along.
You still hire companies that already have the doctor networks, the claims systems, the pharmacy relationships, all that infrastructure already built and running, because building it yourself would cost more than renting it. But you stop paying the biggest cost: the premium an insurance company charges to assume your financial risk on top of everything else. The result is the same coverage at dramatically lower cost.
Mayor Zohran Mamdani did exactly this for New York City employees on January 1, 2026. The NYCE PPO converted the city’s health benefits program into a self-funded plan, with UMR and EmblemHealth handling administrative operations under contract. The projected savings: roughly $900 million annually.¹
So I asked the obvious question. If the city can do this for its own workers, why not open it up to the public? Manage enrollment carefully, keep it solvent, and New York City has a public option. No federal permission required. No waiting for Congress. Just the city deciding to do it.
Then I hit the wall.
With the NYCE PPO, New York City became a self-funded employer. The city bears the financial risk for its own workers and pays contractors to manage the administrative side. It reduces what the city spends on employee health benefits.
It cannot charge the general public for coverage. It generates no revenue. There is no path from a self-funded employer plan to a public option open to every New Yorker. The contracts with UMR and EmblemHealth run for years. The city doesn’t own the infrastructure. Building it from scratch would take time and money the city doesn’t have.
I thought I had found the answer. Then I hadn’t.
Then I found MetroPlus.
New York City already built exactly what I was looking for. Not recently. In 1985, during the Reagan administration, the city created a fully licensed health insurance company from scratch, certified under New York Public Health Law, wholly owned by the public hospital system.
MetroPlus Health Plan has its own staff, its own provider network covering more than 34,000 doctors and specialists, its own claims operation. It sells plans on the New York State marketplace today. Any New Yorker can buy one, regardless of income. It has 690,000 members. In its most recently filed financial statements, it reported $657 million in surplus and $1.72 billion in admitted assets.²
New York City owns an actual insurance company.
And it already does both things we need it to do. It covers people who cannot afford what private insurers charge, and it generates surplus that flows back into NYC Health + Hospitals, strengthening the public health infrastructure that serves every New Yorker who walks through its doors.
A system that funds itself means working people get covered, the city doesn’t go broke, and covering people and closing the deficit are the same action. And while Albany has the statute open anyway, there is a conversation worth having about whether that surplus should flow more broadly still, to city services, to the general fund, to wherever the public need is greatest.
North Dakota figured this out for banking in 1919. Farmers and populist organizers, sick of out-of-state banks charging double-digit interest rates and grain companies manipulating prices, won control of the state legislature and built a public bank. The Bank of North Dakota has turned a profit every year since it opened. In 2024 alone, it returned $335 million to the state general fund.³
When the financial system collapsed in 2008, the federal government pumped $204.9 billion through the Troubled Asset Relief Program into 707 private financial institutions across the country.⁴ BND was ineligible for TARP because the state owns it. It didn’t need it anyway.
While private banks were cutting off small businesses and pulling back credit everywhere they could, BND grew its business lending 35% during the tightest months of the crisis.⁵ While 49 state treasuries ran deficits in the aftermath of the crash, North Dakota ran a surplus.⁶
The publicly owned bank kept lending when private banks stopped. MetroPlus is that, for health insurance, in New York City. And for forty years, almost nobody has noticed.
The reason nobody noticed is worth understanding, because it gets at what we’re actually fighting.
Private health insurers operate in a market that looks competitive but functions like a cartel. There are no formal agreements, no smoke-filled rooms where executives set prices together. But when every option available to a consumer is designed to generate profit and shareholder returns, none of them have any incentive to compete on price.
The floor is set by what the market will bear, not by what care actually costs. Nothing stops UnitedHealthcare or Aetna or any of the other major insurers from charging fair rates today. They just have no reason to do it when there’s no alternative forcing the comparison.
UnitedHealth Group returned $16 billion to shareholders in 2024.⁸ That money came from premiums paid by sick people and the employers and workers who cover them. None of it went back to sick people. Major private insurers spend roughly fifteen cents of every premium dollar on overhead and profit rather than on actual medical care.⁹ Medicare runs its administrative operation at approximately 1.3% of expenditures.¹⁰ The difference between those two numbers is the machinery of denial and the cost of making shareholders wealthy.
MetroPlus has no shareholders. It has no profit margin to protect. And the New York State Department of Health has been measuring its performance for decades.
MetroPlus has earned a five-star overall rating in the DOH Consumer’s Guide to Medicaid Managed Care Plans, ranked first in New York City for quality and patient satisfaction six out of seven consecutive years, and in 2020 ranked first among all 15 New York State Medicaid managed care plans statewide in the Quality Incentive Program, scoring above 90% of state benchmarks.¹¹
By the state’s own measure, MetroPlus is already the best insurer in New York City, and the public option we need.
So why isn’t every New Yorker on it?
One clause in one state law keeps MetroPlus from competing freely in the commercial market. Section 4403-a of New York Public Health Law, the statute under which MetroPlus is licensed, requires that its membership be “substantially composed” of people enrolled in Medicaid and other government health programs.¹²
In 2002, the New York State Department of Health issued guidance interpreting “substantially composed” to mean at least 90%.¹³ That leaves a hard ceiling of 10% for commercial enrollment. The revenue-generating side. The side where MetroPlus would compete directly with private insurers for paying customers.
The number 10% does not appear anywhere in the statute. It lives in a guidance memo and a managed care definitions webpage. It has never been tested in court. It is an administrative interpretation by one state agency, and it has functioned for decades as a gate keeping the most profitable part of the health insurance market safe from genuine public competition.
When MetroPlus was created in 1985, the statute authorizing it said membership had to be “substantially composed” of government program enrollees and left it there. No percentage. No hard ceiling. Just ambiguous language that left room to grow. The people who built MetroPlus almost certainly understood that. Ten percent commercial, then twenty, then thirty, until New York City had a genuine public option that covered everyone who needed it. The proof of concept would do the arguing.
It worked. MetroPlus grew, performed, and for seventeen years operated under that ambiguous language without a hard commercial ceiling in sight.
Then in 2002, the New York State Department of Health issued a guidance memo deciding that “substantially composed” meant 90% government programs. The ceiling that was never in the statute appeared overnight as policy. The beachhead didn’t get expanded. It got formally constrained by a bureaucratic interpretation that nobody ever challenged and nobody ever voted on.
Now three things are happening at once, and we need to move.
Section 4403-a has a sunset date of March 31, 2026, fifteen days from today.¹⁴ Albany has not yet passed the FY2027 budget. Negotiations are ongoing with an April 1 deadline.¹⁵ Every extension bill moving through those negotiations is a potential vehicle for amendment.
And 470,000 New Yorkers are losing their health insurance by July.
H.R.1, signed into law in 2025, stripped $7.5 billion in annual federal funding from New York’s Essential Plan by eliminating premium tax credit eligibility for most lawfully present immigrants and allowing enhanced subsidies to expire.¹⁶
The Fiscal Policy Institute estimates 470,000 New Yorkers will lose Essential Plan coverage when the state’s Section 1332 waiver reverts on July 1, 2026.¹⁷ Of those, 233,000 live in New York City.¹⁸ They are working people earning between roughly $39,000 and $80,000 a year for a family of four. Essential workers, small business employees, people working multiple jobs.
They currently pay nothing for comprehensive coverage. By July they face premiums of roughly $250 a month with a $2,500 deductible, if they can find anything affordable at all.
MetroPlus is the natural landing spot for those 233,000 people, if the cap comes off. And it doesn’t stop there. The same ceiling that blocks individual commercial enrollment blocks small businesses from offering MetroPlus to their employees. Remove it and every small business in New York City gains access to a publicly owned insurer with no profit margin to protect, competing directly against private carriers for their group business.
We have three ways to take it off, and the fifteen-day window is only one of them.
Albany can amend Section 4403-a when it extends the statute, removing or substantially lowering the “substantially composed” requirement. This is the most durable fix, written into law rather than dependent on any single administrator’s interpretation. State senators and assembly members are in negotiations right now and they need to hear from us.
DOH Commissioner Dr. James McDonald can reinterpret “substantially composed” administratively, deciding it means 51% instead of 90%. No legislation required. No court fight. No waiting for Albany to act. A policy decision by a commissioner who has already said publicly that keeping working New Yorkers insured is his top priority.¹⁹ Mayor Mamdani and NYC Health Commissioner Dr. Alister Martin, who sits on the NYC Health + Hospitals board that oversees MetroPlus, need to make that call to Albany today.
Or, if Albany won’t act and DOH won’t budge, MetroPlus enrolls the people who need coverage, grows its commercial book past the ceiling, and dares the state to do something about it. The ask to DOH becomes simple: we are going to insure these people and we are going to do it profitably. If the New York State Department of Health wants to take that to court, if they want to spend public money on lawyers to fight for the right to remove New Yorkers from a highly rated insurance plan that is solving a coverage crisis and generating revenue for the city, then let’s go. That legal fight has never happened. The 2002 guidance memo has never been tested. And the state would have to stand up in court and argue that New Yorkers should be kicked off a highly rated health plan that is generating revenue for the city.
Even if Albany extends Section 4403-a on March 31 without changing a word, paths two and three remain fully available. A phone call between two health commissioners about a guidance memo from 2002 that carries no binding legal force and has never been challenged can happen any day of the week.
Mamdani is staring down a $5.4 billion two-year budget gap.²⁰ Expanding MetroPlus commercial enrollment generates premium revenue flowing back to the city-owned hospital system rather than to private shareholders. Covering people and closing the deficit are the same action.
MetroPlus is the only government-owned health insurer in the United States that sells plans to the general public on an open marketplace. Hennepin Health in Minnesota is the only other government-owned HMO in the country, and it cannot sell to the public at all, limited strictly to Medicaid and state program enrollees.²¹ New York City built something no other city has. The model is replicable. Any city or state with the political will to charter a public insurer could build one. New York City did it through its public hospital system. That is one way in. It is not the only way. But New York City already has it, already running, already rated the best insurer in the state by the state’s own measure, already generating hundreds of millions in surplus, already covering 690,000 people.
Everything we keep saying we need, a public option that covers everyone, that prices at cost instead of profit, that generates revenue for the public instead of draining it, that holds up in a crisis instead of collapsing, it exists. It has existed since 1985.
Understand what we are actually building here. A MetroPlus freed from the 90% floor is not a better version of the current system. It is the replacement for a system that may not survive the decade. If the Republican Party finishes what it started, Medicare and Medicaid as we know them may not exist in five years. Every blue state health care strategy that depends on federal matching funds is one budget reconciliation bill away from collapse. MetroPlus answers to the city. It answers to the state. It does not answer to whoever controls the White House or the House Ways and Means Committee.
The structure we are describing is straightforward. People who can afford to pay more do. People who can’t pay less. People who can pay nothing pay nothing. The surplus generated by commercial enrollment covers the people at the bottom, and the whole system stays solvent without a dollar from the federal government. It’s the same logic that keeps a public library open: the tax base of the whole community funds a resource that everyone can use, and the people with more contribute more to keeping it running. We are proposing a city where every resident has access to a genuinely affordable insurance option, with voluntary enrollment, where the surplus generated by commercial members gets recycled back into the system to lower rates and improve care for everyone in it.
This is what a well-managed government looks like.
Here is what we do right now.
Most of our readers are not in New York. We will get to you. But first, if you are in New York City or New York State, here is what you do right now.
Contact Mayor Mamdani at nyc.gov/mayors-office or by calling 311. Tell him to direct NYC Health + Hospitals to aggressively grow MetroPlus commercial enrollment and to push Albany to remove the statutory requirement that is keeping it artificially small.
Contact NYC Health Commissioner Dr. Alister Martin at nyc.gov/site/doh/about/contact-doh.page, 42-09 28th Street, Long Island City, NY 11101. As a board member of NYC Health + Hospitals, which owns MetroPlus, he has standing to advocate directly for commercial expansion and to make the call to the state DOH commissioner asking for a reinterpretation of the enrollment requirement.
Contact NYS DOH Commissioner Dr. James McDonald at dohweb@health.ny.gov, Corning Tower, Empire State Plaza, Albany NY 12237, or on X at @NYHealthCommish. Tell him to reinterpret the phrase “substantially composed” in the department’s 2002 guidance on Section 4403-a to remove the 90% government program enrollment floor. He can do this without a single vote in Albany.
Contact your state senator and assembly member. Tell them to amend Section 4403-a of New York Public Health Law to remove the “substantially composed” enrollment requirement entirely when the statute comes up for extension before March 31. The ask is specific: remove the language that has been used to cap MetroPlus commercial enrollment at 10% and uncap it entirely.
Everyone else: forward this article to your governor, your mayor, your city council representative, your state senator, and your state house representative. Tell them what you liked about it. Tell them you want them to read it and tell you what they plan to do about it.
We can solve the budget problem by solving the healthcare problem. And protect ourselves from a GOP actively working to destroy our country.
The Bank of North Dakota for health insurance is already built. Already operational. Already the best in the state. Just waiting to be replicated. And expanded.
Toppling Tyrants: A Field Guide to Dismantling American Fascism — physical copy / free download
Grab Them By The E.A.R.R.: How to Get Politicians to Do What You Want — physical copy / free download
Conservatism: America’s Personality Disorder — physical copy / free download
Intro to Soft Secession — physical copy / free download
Oppositional Federalism and You — physical copy / free download
Free downloads:
Being Dangerous: Go From Activist to Operative
Soft Secession: Policies That Pass
All Four Completed Model Legislation Bills
The Opposition Guide to Tax Warfare
Six-Panel Soft Secession Brochure
Prosecution Memo: Jonathan Ross
Find any official in any state at openstates.org. Find your state attorney general at usa.gov/state-attorney-general. Find mutual aid near you at mutualaidhub.org.
Democracy merch and the full library at The Existentialist Republic.
Works Cited
¹ New York City Office of Labor Relations. (2025). NYCE PPO plan overview and projected savings. NYC.gov.
² MetroPlus Health Plan, Inc. (2023). Statutory financial statements for the year ended December 31, 2022. NYC City Record.
³ Bank of North Dakota. (2025). 2024 annual report. BND.nd.gov.
⁴ U.S. Government Accountability Office. (2023). Troubled Asset Relief Program: Lifetime cost (GAO-24-107033). GAO.gov.
⁵ Demos & Center for State Innovation. (2011). Banking on America: How main street partnership banks can improve local economies. Demos.org.
⁶ Brown, E. (2014, November 19). This publicly-owned bank is outperforming Wall Street. Common Dreams. CommonDreams.org.
⁸ UnitedHealth Group. (2025). 2024 annual report to shareholders. UnitedHealthGroup.com.
⁹ Kaiser Family Foundation. (2023). 2023 employer health benefits survey. KFF.org.
¹⁰ Centers for Medicare & Medicaid Services. (2024). National health expenditure accounts: Methodology paper. CMS.gov.
¹¹ MetroPlusHealth. (2021, January 13). MetroPlusHealth ranked New York City’s highest-rated health plan [Press release]. BusinessWire.com.
¹² N.Y. Public Health Law § 4403-a. (2025). NY Senate Open Legislation. NySenate.gov.
¹³ New York State Department of Financial Services. (2002). OGC Opinion No. 02-04-29: Prepaid health service plan, regulation of privacy. DFS.ny.gov.
¹⁴ N.Y. Public Health Law § 4403-a. (2025). NY Senate Open Legislation. NySenate.gov.
¹⁵ Spectrum News 1. (2026, March 10). Highlights of New York state Senate’s one-house budget proposal. SpectrumLocalNews.com.
¹⁶ New York State Department of Health. (2025, September 10). Following devastating federal funding cuts, New York State takes new action to preserve health care for as many New Yorkers as possible [Press release]. Health.ny.gov.
¹⁷ Fiscal Policy Institute. (2026, February 12). Regional impacts of the July 2026 Essential Plan cliff. FiscalPolicy.org.
¹⁸ Fiscal Policy Institute. (2026, February 12). Regional impacts of the July 2026 Essential Plan cliff. FiscalPolicy.org.
¹⁹ McDonald, J. (2026, January 30). Interview. In T. Daniel, How New York’s state health chief is navigating the ‘Great Desensitization.’ Healthbeat. Healthbeat.org.
²⁰ Office of the Mayor of New York City. (2026, February 17). Preliminary budget fiscal year 2027. NYC.gov.
²¹ Minnesota Department of Health. (2024). List of health maintenance organizations and county-based purchasers. Health.state.mn.us.
Subscribe by email →