Employers Sense Deja Vu on Health Reform

Jon Hurst, President of the Retailers Association of Massachusetts, says lawmakers currently negotiating a national health care overhaul should learn from the Bay State and not penalize employers in the rush toward reform:The parallels of the debate in Washington on health care reform and what we have experienced in Massachusetts over the past three years are uncanny. Many of the models replicate the Massachusetts experience, and armies of public relations executives have been working around the clock to convince everyone that our reform is either the best public policy initiative ever conceived, or the absolute worse. No matter where you come down on that position, most common sense observers can agree that the haste in which both were pushed or are currently being pushed could be too aggressive, opening doors not only for costly mistakes but also inadequate solutions.

The 2006 Massachusetts Health Care Reform was very much driven by both the potential for losing a pending federal Medicaid waiver, as well as to prevent a proposed payroll tax ballot initiative. The employer community was primarily playing defense, focused on preventing uncompetitive taxation and unaffordable mandates. That left a gaping hole for both health care expansion advocates and big health care providers to primarily play only offense in seeking policies which may have been prevented under a more thoughtful process.

The reform merged the non-group and small group marketplaces, resulting in relief for individuals at the expense of small businesses and their employees. The annual double digit increases for small businesses and their employees have continued even during these times of economic contraction. The promise of the Connector never materialized for small businesses due to the lack of negotiating ability for non-taxpayer subsidized plans.

Likewise, the continued legal and small group marketplace discrimination against small employers imposed a decade earlier by the prohibition of group purchasing exists to this very day.

And taxes now being placed upon employers due to complicated triggers create the puzzling and counterproductive reality that even those who offer health insurance may be liable for costly assessments.

The fact is that you have employers who are offering insurance and making substantial co-premium payments for employees now being assessed because they had employees who turned down the offer because they were already insured by a spouse’s plan, a parent’s plan, or Medicare. This is troubling because everyone has to have insurance under the law, and we all know that big government and big business get the best rates in the marketplace, so if a family has multiple choices for their purchases, why penalize employers because some choose their coverage from less costly sources? Such a public policy is pure and simple a tax, not a “free rider assessment,” because it is all about raising revenue, not about achieving universal coverage.

So now the debate in Washington centers on employer mandates, free rider assessments, Connector-like “exchanges,” public options. And like the Massachusetts legislative experience in 2006, it appears that for political reasons this complex reform has to get done by the end of the year. Once again the employer community faces a situation in which they are more on defense rather than offense, and that creates an environment for mistakes and imperfect solutions.

A lot can be learned from the Massachusetts experience, including the vital need to deal with cost at the same time as coverage—not later. Real, affordable insurance solutions are needed for small businesses and their employees—not just for individuals and taxpayer subsidized plans. With 50% of the marketplace now self-insured under ERISA at presumably lower rates, let’s take a look at why this is happening and give more small employers and their workforce the ability to have equal rights and abilities under the law. Let’s allow insurance offerings to cross state lines in efforts to break existing near monopolies which allow for double digit cost increases.

Let’s slow this train down and let those who primarily pay the health care bill in this country—the employers—have adequate input on market based solutions, rather than having to primarily play defense against those seeking a quick bill to advance their agendas.

This program aired on October 4, 2009. The audio for this program is not available.


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