Health insurance for healthier economy

from southcoasttoday.com



Supporting small business growth in Massachusetts is critically important to our economic future. Fixing our health care system -- especially by providing all our workers with decent, affordable health insurance coverage -- is also important. Some suggest the health reform legislation passed by the House of Representatives in early November sacrifices the former goal to achieve the latter by requiring employers who don't cover their workers to pay a "fair share" payroll contribution to the state. Nothing could be further from the truth.

By way of background, since 1982, I have served as president and treasurer of ABC Floor Covering, Inc., a small retail floor covering business in Westport, and I consider my employees a part of my extended family. The well-being of my employees and their families is, therefore, vitally important to me, and I cover one hundred percent of their health care premiums.

I'm also the House Chairman of the Joint Committee on Labor and Workforce Development. We're proud of the work we have done in the Legislature this year to produce an innovative economic development package that will spur the creation of thousands of new jobs in the commonwealth. Creating and protecting jobs is a priority for me and for the Legislature; if health reform got in the way of this goal, I would oppose it. Instead, I'm for it. Here's why.

Right now, businesses that provide health insurance to their workers pay twice - once for their own workers and again to subsidize the cost of care for workers at firms that don't provide health insurance. The explicit cross subsidy amounts to $160 million per year to finance the state's uncompensated care pool paid by every employer who provides health insurance and every individual with private health insurance coverage. The House approved legislation explicitly ends this unfair cross-subsidy, thus providing important rate relief to every employer now struggling to pay health insurance premiums.

Recently Citizens Bank partnered with Babson College to conduct a survey exploring issues affecting small business growth in Massachusetts. The survey found that the number one impediment to the growth of small business is the cost of paying for health insurance and related products.

The employers complaining about the cost of health insurance are the ones who provide it -- and the House legislation provides immediate, real, and premium relief to all Massachusetts businesses in the amount of $160 million annually.

The House health reform plan is able to offer this relief by requiring employers who do not offer coverage to make a reasonable contribution of five percent of gross payroll to the commonwealth (seven percent for firms with more than 100 workers), with a credit for what they pay in health care costs for their workers. The contribution would not be levied on firms with ten or fewer workers, and would not be calculated through the salary of workers covered through their spouses in any size firm.

Currently, firms that provide decent health coverage to their workers pay between 12 and 15 percent of gross payroll in premiums. The House requirement is not an employer mandate (as exists in Hawaii) because employers would not be mandated to provide coverage.

We cannot ignore the reality that employer-based health insurance coverage is declining at an alarming rate. The Kaiser Family Foundation reports that the percentage of employers offering coverage dropped from 69 to 60 percent between 2000 and 2005. Another study found that Massachusetts had the second highest drop in employer-sponsored coverage of any state between 1999 and 2004.

The health care industry is one of the most important and dynamic sectors of the Massachusetts economy. The instability and cost-shifting created by the erosion in private insurance coverage is an impediment to economic growth and to the stability of a cornerstone of our national economy.

Some ask whether the payroll contribution will result in employers leaving Massachusetts for other states. It's a good question and the answer is reassuring. Employers will not leave Massachusetts because the sectors of our business community that don't offer coverage are overwhelmingly in service, retail, and construction. These companies and jobs are not mobile - if Walmart or McDonald's moves out of state, their business stays behind.

It's time for Massachusetts to reward and help businesses that are already providing health insurance to their workers, and assist businesses that are not doing so. One thing we can't do is nothing -- because the problem of uninsurance is growing at an alarming rate every day. It's time to act responsibly and courageously. That's what the House has done.

Michael J. Rodrigues is a state representative from Westport and House Chairman of the Joint Committee on Labor and Workforce Development.