When Massachusetts enacted landmark health care reform in 2006, small business owners were hopeful that reform would reduce the number of uninsured, bring more people into the state's health care pool and lower costs across the board. The concepts behind reform had merit. With fewer uninsured and more competition for health care dollars, predictions were that health care costs in Massachusetts would stabilize and runaway premium increases would be a thing of the past.
Dollars & Cents
But two years later health care reform is in jeopardy. While the number of uninsured has shrunk, health insurance costs continue to spiral out of control at a time when small employers are being squeezed from every direction imaginable. Absorbing double-digit premium increases was bad enough in years past, but with an uncertain economy and energy prices choking the bottom line of small employers, skyrocketing health care bills are a continuing albatross.
What happened to making health care more affordable? Government happened.
Instead of seeking innovative ways to deliver health care services at lower costs, lawmakers and bureaucrats have been busy adding rules, regulations and fees to our state's health care system. Rather than create flexible health insurance products to help small employers find the right benefits package for their employees, lawmakers and state regulators are heaping mandate after mandate onto health care plans. The free-market reform we were hoping for is being strangled with red tape.
Now Gov. Deval Patrick proposes higher fees on employers to pay for a possible funding shortfall for the higher state expenses resulting from the rules and regulations. The governor says we need to increase the so-called 'fair share contribution' from business, changing the statutes and regulations and fee amounts, if necessary, until the state's annual take reaches $38 million—a 500 percent increase in revenue.
The governor's plan not only smacks large and small businesses at a time when they can least afford it, but it ignores the fact that business is already doing its part. Private sector businesses pay 75 percent of the cost of health insurance of employees. In fact, since Jan. 1, 2007, the number of Massachusetts residents receiving employer subsidized insurance in the private sector has increased by 85,000 at a cost of $500 million to private employers.
Despite this improvement, Patrick seems intent upon punishing the business community with more mandates and higher fees. Instead of encouraging consumer choice and flexible plan design to lower costs and expand access to coverage even further, the governor seeks to tax and regulate.
The goal of health care reform was not to expand state government's role. However, promising market-based reforms are going to die a slow death in Massachusetts if we allow the state to continue down its current path of command and control.
Legislators should reject this latest scheme from the governor and go back to the drawing board with a simple goal in mind: What will make health insurance more affordable for the people of Massachusetts? We don't have a quality problem or an access problem in Massachusetts; we have a cost problem.
Since cost is the greatest barrier to access to health insurance, start developing the solutions we need to make it affordable in Massachusetts. And when health insurance is affordable for small and independent businesses and their workers, the health insurance problem will be resolved.
Bill Vernon is state director of the National Federation of Independent Business, Massachusetts' and the nation's leading small business association.
Read about the response the WBJ has received to this op-ed at Inside WBJ, the paper's blog.