Our medical establishment, nationally and state-wide, is increasingly unable to meet the people’s health needs.  In Massachusetts, there are both near-term and long-term problems.  This editorial deals with the near-term; a future editorial will deal with the long-term.

     By Sunday, January 15, 2006, our elected officials are supposed to come up with a means to expand coverage to Massachusetts citizens who don’t have medical insurance.  At stake is a large sum of federal money from Medicaid – approximately $600 million – but in order for us to qualify for that, the Feds have demanded a coverage plan from our state legislators by the January 15 date mentioned above.

     A proposal in the Massachusetts House of Representatives calls for an assessment on the payrolls of businesses that don’t offer their employees medical insurance.  Small businesses (less than 10 employees) would be exempt, businesses having 10 to 100 employees would pay a 5% payroll tax, and businesses over 100 employees would pay 7%.

     One problem with this scheme is that no one agrees on how much revenue it will bring in.  Estimates have ranged from $650 million, down to $365 million, to $175 million, to as little as a net of $15 million.  Here at South Boston Online, we aren’t clear why the estimates have been so inaccurate, but it’s quite clear to us that no intelligent legislation can be enacted with estimates that vary this much.

     Furthermore, we wonder if our legislators have read the newspapers lately.  We have weathered a takeover of Gillette by Procter & Gamble, which by itself may be an acceptable business tactic, but which will cost the Boston area a few thousand jobs (mostly from the Prudential complex in Copley Square).  Just last week, Fidelity announced plans to move 1,500 jobs to Rhode Island.  Economic factors were one of the reasons.  In addition, EMC plans cuts (1,000 in Hopkinton) and there has been a prediction that contracts at the GE engine plant (4,000 jobs in Lynn) will be cut by 2010.  This is not the time to raise state payroll taxes, no matter how worthy the cause.

     Think locally as well.  South Boston Online published 30 articles in 2005 about local businesses.  Half of these were new businesses.  If they are fortunate enough to grow to 10 employees, their payroll expenses will suddenly jump by 5% if the health measure passes.  That’ll be a blow to their growth plans, for sure.

     It’s well known that Massachusetts, unlike the other 49 states, is losing population, and that our job recovery is lagging the rest of the nation by half.  We cannot imagine how anyone can contemplate adding to the state’s business burden at this time.  Health care for all is a worthwhile goal – South Boston Online is in favor of this.  But if it is to be done, it must be funded from accurately estimated general revenues, not by payroll taxes. 

     The plan from the Massachusetts Senate is equally as formless.  It doesn’t seem as if it would raise very much money.  Apparently, the Senate plan will dip into the state’s reserves, thus reducing the “rainy day” money for emergencies.  Gov. Romney’s health insurance proposal is long on ambition but is also short on specifics, even though it calls for funding via general revenues, not by a business payroll tax.

     And will the funds for health care, no matter where they come from, be “earmarked”?  That’s important – just look at what happened to the settlements paid to our state by the tobacco companies.  These were supposed to be used for smoking cessation programs – yeah, right!

     Over the long-term, the problem with our health system is within the system itself.  Throwing more money at it, without overhauling the system completely, will only make it worse.  We spend one-and-a-half times as much on health care as do other developed nations.  We should be the very best, yet our health statistics rank around #20 in the world – right next to Hungary.  More about the long-term issues in a future editorial.