and the
Citizens Economic Research Foundation

Tuesday, March 21, 2006

Massachusetts Healthcare Reform
"First do no further harm”

To:  Members of the General Court

We realize that this issue isn’t simple. The present health care system is unfair and untenable. But in Massachusetts, with its total per capita tax burden already the 4th highest in the nation, new taxes cannot be the solution to any problem.

The “assessment” on employers that don’t provide health insurance is of course a new tax. And we still object to the “old tax” – the $62 per employee paid by those who ARE providing health insurance. There was never any justification for taxing the responsible employers, those who are not part of the problem, to support the bad debt/free care pool.

This is the same wrong-headed concept as the Massachusetts nursing home tax, that taxes self-payers $10.99 a day for the privilege of not being a burden on the Medicaid system. We applaud the Elder Affairs Committee for favorably reporting out a repeal of this tax – H4728.

We object in principle to the concept that employers should be paying for health insurance at all. Business provides the jobs that provide not only the paychecks of its employees, but all the revenue money for all state services. It is foolish to jeopardize Massachusetts jobs while forcing business to directly provide social services, in this case healthcare. But as a small business that pays for health care for its four employees, CLT recognizes the present tax advantages of providing this benefit. However, we resent paying more than our share.

Reforms that address the overall cost of health care are more likely to be done if the state, not its businesses, pays for the bad debt/free care pool.

So here is the bottom line. The $62 is a tax, a bad tax. Adding a new $295 tax for companies that do not provide health insurance is adding another bad tax to an existing bad tax. Massachusetts should repeal the $62, and not assess the $295, and repeal the nursing home tax.

Health insurance for all is too big an issue to be done at the state level. If this bill passes, the tax on all businesses will increase as more people come here for subsidized health insurance while more businesses do not come here, or leave, putting us at further competitive disadvantage.

The federal government should deal with this issue by letting individuals purchase health insurance with pre-tax dollars. If the final bill looks like the bill that is presently being floated, Governor Romney should veto it, then address it as President of the United States.

Massachusetts health care reform: first, do no further harm.

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