The Beacon Hill Report - September 18, 2014

Date: September 17, 2014

The Massachusetts chapter of the National Federation of
Independent Business joined with the Retailers Association of Massachusetts to
ask Attorney General Coakley to reconsider the proposed settlement with
Partners Health Care permitting the health care giant to merge with South Shore
and Hallmark Health Corporations.

The state’s two most prominent representatives of the
small business community said the merger would lead to higher health insurance
premiums for the state’s small business community and the 1.5 million residents
of the state who work at small businesses. Small businesses have been waiting for
the state to make cost reduction the focus of health care policy since
enactment of Massachusetts health care reform. Until the state gets serious
about health care costs, we must oppose mergers, legislative initiatives and
anything else that will not bring financial relief for our members. The groups
cite the state’s Health Policy Commission conclusions about the “increased
health care spending” resulting from “reduced market competition” and
eventually leading to “increased premiums”.

NFIB also joined
in a letter to the Governor requesting immediate reform in the state’s Medicaid
program which serves 1.6 million people (MA population is 6.2
million) and costs taxpayers $14 billion annually. In addition to increased
taxes, small business owners are paying double by bearing the
burden of health care costs shifted to private sector employers and workers due
to inadequate rates paid by the government for fee for service plans. It
is unfair to small business to demand “skin in the game” from the private
sector while continuing high cost coverage for publicly funded
programs. 

Income Tax Reduction on the Horizon…..Maybe

The
state’s revenues for the first two months of FY 2015 have exceeded expectation
by $65 million and that could signal a reduction in the state’s income tax rate
to 5.15%, effective January 1, 2015. The income tax rate will fall from 5.20%
to 5.15% if certain statutory benchmarks related to economic growth causing
revenues from the income tax to increase. If the state experiences revenue
growth over four three-month periods starting in July, then the modest
reduction in the tax rate will be implemented. NFIB has had a goal of returning
the state to a 5% tax rate for several years and has supported legislation to
accomplish that goal over many legislative sessions. The statutory formula
currently in place was a compromise that has reduced the tax rate from 5.30% to
5.20% in two steps to date.

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