The DHCFP employer report came out on Friday and already advocates that have never had to make a payroll, never had to keep a business open, never had to compete with businesses in border states and on the Internet, are saying businesses are not paying their fair share under the first in the nation mandated health insurance law. This report requires deeper understanding than just looking for the names of big firms that are supposedly “free riders.” Employers–particularly small businesses–are struggling with an awful economy, and they are dealing with state mandates that not only do not exist in any border state–they don’t exist in any state in the union. And yes, small employers do indeed include those with over 50 employees.
Right now in Massachusetts we are on the cusp of an economic downturn not seen since 1990. We are in danger of job losses that will hurt our families by putting people in unemployment lines which disproportionately will hurt the least fortunate among us. Yet, some are beginning to point fingers at some of the very communities which are desperately needed by our most struggling families for jobs and income.
Some are saying that employers are not doing their “fair share.” But they are ignoring the fact that employers are shouldering the majority of the annual double digit insurance premium increases, as well as the fact that employers are picking up the costs of thousands of newly insured lives pushed into insurance plans under the state’s individual mandate.
The employer report showed me several things, including the fact that public entities (i.e., the Commonwealth of Massachusetts and the City of Boston) are large employers too, and are facing some of the same realities as private industry. Like many in the private sector, public employers are large employers with thousands of employees. Some of those employees are part-timers, secondary wage earners, or individuals that don’t wish to buy into costly health insurance. Furthermore, public and private employers alike face the quandary of whether to even offer part-timers health care coverage. Doing so makes them ineligible for the very generous, yet relatively affordable, taxpayer-subsidized plans of Commonwealth Care.
There is a delicate political balance that exists in trying to make health care reform a long term reality in Massachusetts. If that balance is upset, there will likely be significant ramifications. The proper course of action for all now is to allow the law to further mature, and to put all of our focus on lowering health care premiums. Long term, reining in the cost monster is the only way to make this law acceptable to employers, consumers and taxpayers.
Jon B. Hurst is the President of the Retailers Association of Massachusetts
Jon raises some important points that must be considered when thinking through who should pay any new assessment. Employers are paying more due to increased take-up rates, and everyone is pleased that, so far, it appears that employer offer rates are holding steady.
We’ve always emphasized the need for a level playing field. Employers who do cover their workers face unfair competition from those who don’t, and without minimum standards there’s a race to the bottom that leaves everyone worse off.
In terms of business climate, virtually every large employer listed by DHCFP as relying on the state to provide benefits to its workers are located here because they serve customers here. Wal-Mart and Stop and Shop are not able to just move to South Carolina or South Asia.
Jon writes correctly that employers face a quandary when making part-timers eligible for coverage, since it makes those workers ineligible for subsidized CommCare. Employers can legitimately choose to make its workers eligible for state subsidies. Those employers in fairness ought to reimburse the state for some of the benefit that they reap as a result.
Jon suggests “the proper course of action for all now is to allow the law to further mature, and to put all of our focus on lowering health care premiums.” While we focus on lowering costs, we can’t just let the law mature as is. Without new revenue, the current path is unsustainable, and would crowd out vital state investments in education, infrastructure and other human services.
Yes – focus on reducing costs. The consensus is building. But at the same time fairly find the revenue needed so we can continue with the success we have created.
“While we focus on lowering costs, we can’t just let the law mature as is. Without new revenue, the current path is unsustainable, and would crowd out vital state investments in education, infrastructure and other human services.”
Where is this new revenue going to come from? Already 62,000 potentially paying Commonwealth Care enrollees have been exempted by the state because they cannot affort the insurance. In other words, even though these folks supposedly earn enough to buy insurance through the Connector, they clearly have too many other financial obligations to be able to purchase coverage. As the state chases down the remaining 350,000 or so uninsureds who are supposed to be able to purchase insurance (but haven’t done so yet), it will have to grant many, many more folks financial exemptions. How many people will be exempt in the end….100,000, 200,000? And as Mr. Hurst points out in his article, putting the squeeze on small businesses could have as of yet unforeseen consequences on the economic climate in this state. Finally, is it realistic to believe that the state can find additional funding for this program while simultaneously lowering health insurance premiums? Already the newly insureds are facing 10% increases in premiums and double co-pays this summer.
New Hampshire, last I heard, has hold off on their cig tax increase. They know that when Mass increases their cig tax by a buck a pack, their cig business will go through the roof and will collect more in tax revenues by tax increasing their rates.
What will the Commonwealth do when the projected revenues for the upcoming tax increase are not their?
Bill Randell
One of the ways fix the health insurance issues in MA would require bringing in more insurance companies to the state and make it a more competitive market. The best insurance companies aren’t in the state yet, especially in the individual market and the ones who are there run the market.
I agree with you Rueshambo1. There are some lessons to be learned from the recent reform of auto insurance in the state. New insurers have entered the market, and consumers are enjoying double digit premium reductions. On the other hand, we seem to still want to protect our “non-profit” local health insurers, and seem uninterested in fostering a competitive marketplace. Thus, we continue to have double digit increases in the health insurance marketplace, and have no insurers willing to do what is needed to represent and protect consumers. Rather they seem to merely go along with the outrageous annual increases of the hospitals and providers. It is a shame. Both auto insurance and health insurance are mandated, and health costs about ten times more per family. Yet we seem resigned to allowing one insurer to have about 50% of the marketplace–essentially a monopoly.
Jon Hurst