As you may know, Gov. Baker proposed a new business assessment to close an estimated $600 million budget hole in his FY 2018 budget created by Massachusetts’ skyrocketing Medicaid costs. Governor’s initial proposal would have imposed a $2,000-per-employee penalty on small businesses that don’t offer healthcare coverage or don’t insure at least 80 percent of full-time employees. Companies with 11 or more employees would have been affected. After widespread backlash from the business community, including NFIB, the Baker administration went back to the drawing board. The administration’s new plan would still have increased taxes, at least temporarily, for businesses with six or more workers. The second plan’s increase would have been assessed against almost all companies but be less than $70 per worker and would have included a sweetener in the form of an extended freeze on unemployment insurance taxes.
But the House of Representatives was reluctant to increase taxes on businesses to pay for unsustainable increases in the MA Health program, especially in light of uncertainty surrounding national health care policy. Instead, the House directed in its budget proposal that the administration go back to the drawing board once again and devise a plan that focuses on reducing health care costs instead of emphasizing increasing revenues. The House budget writers seek a longer term solution to the underlying problem of out of control spending in the Mass Health program and the rising costs of health care generally that threaten to consume the budgets of state and local governments as well as small businesses.
The House leadership’s willingness to demand action on the growing problem of increased health care costs plaguing small business is commendable. But the final plan is not yet formed and it is not politically easy to devise such a plan. Powerful interests in Massachusetts constantly demanding more resources for health care remain in place. Optimistically, the total revenue raised in the new plan will be smaller, any assessments on business will be accompanied by real cost savings measures, real solutions for the longer term will be on the table, and any new regulations will be subject to public hearings and small business economic impact review. NFIB/MA will continue to work with the administration and the legislature to focus on small business owners’ biggest problem — the high cost of health care for their company, their families and their employees.
