The MA Healthcare Circular Reference

April 9, 2013

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In a recent statement while standing amongst business leaders and small business owners, Governor Deval Patrick recently outlined several vital recommendations to be undertaken by the Commonwealth aimed to reduce the cost of healthcare on businesses and maintain the quality of care in Massachusetts.

“Skyrocketing premium increases put a stranglehold on small business growth and place a heavy burden on employers and employees alike,” said Governor Patrick. “With this series of recommendations, we are tackling these challenges head on and implementing reforms that will curb costs, maintain affordable care and strengthen the business climate in the Commonwealth.” These reforms include closely examining the insurers to be sure they are doing all in their power to control costs to the small business marketplace, filing legislation to amend small group healthcare rates, increasing rate control regulation and promoting the creation of insurance purchasing cooperatives.

A few days later, the Governor boasted that more than 97 percent of residents have health insurance, demonstrating the ongoing success of health care reform in the Commonwealth. According to the Commonwealth’s annual household survey on health insurance, less than 3 percent of residents remain uninsured and almost every demographic group is within a few percentage points of universal coverage. These statistics, while resonating positively amongst the Governor’s constituency and presenting a compelling tale to the rest of the nation as they watch our “experiment”, seem to indicate a success which is undermined by its impact on the small business community, as the Governor articulates.

What gives? Is it not clear here that universal healthcare is being achieved in Massachusetts on the backs of small businesses, and that the insurers have systematically passed their increases in the cost of doing business in the Commonwealth onto their customers? Our own increase at CPHR this year for the same coverage was 29%! So in response to the further disincentive for companies to do business in Massachusetts, we are now pointing the finger at the insurance companies. What happens when these “recommendations” are implemented and no insurers will write policies in our state because it’s not profitable? Will the state further expand MA Healthcare so that it becomes more imposing of a tax to the employer and furthers to dissuade businesses from having employees here?

For that matter, where in the social contract is it our responsibility as employers to share the burden of cost of our employee’s healthcare? For most of my clients, whom happen to be in the service business where the employees are the product, it becomes our second highest expense item after payroll itself. Couldn’t these monies be better deployed in the form of expansion of marketing and sales activity, or new product development? In other words, spend money that will create jobs and stimulate the economy.

So shouldn’t healthcare become the responsibility of the employee, and a choice they make alongside of other lifestyle choices such as where they live, what schools they attend and what cars they drive? And if they make the wrong choices, should not the Governor be pointing the finger at the Commonwealth’s citizens itself.

Oh wait, that’s how you lose an election!

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