In years past companies facing bankruptcy always had a trap door to help them out of a financial pickle – freezing employee pensions. It didn’t take long for observant business executives stroking their chins to catch on. Today the secret’s out. Once a measure of last resort, large profitable companies are now abandoning their contracts with workers left and right, reneging on promises of security to longtime employees. Verizon, Lockheed Martin, Motorola and I.B.M are the latest to jump on the wagon.
You can be assured that your family’s health care coverage is next.
Here in the Bay State, two out of three companies, large and small, contribute their fair share to our health care system by providing insurance to their employees. But for a comparatively muscular employer-led system, Massachusetts is still home to half a million uninsured residents and taxpayers shoulder a hefty $7 billion in Medicaid costs annually.
That’s because our state’s health care system is built around disincentives. Responsible Massachusetts companies are operating at a competitive disadvantage against those that choose not to insure and pay nothing at all. A report released this month by the Families USA Foundation shows that 46 percent of small businesses looked to a competitor’s refusal to provide health insurance as an important factor for their own decision not to insure.
Meanwhile large profitable corporations without coverage, like Wal-Mart and McDonalds, top the list for having the most employees on state health care, bloating our public safety net programs and forcing the rest of us to pay.
When companies don’t provide insurance for working families, hospitals shift costs for uncompensated visits onto the backs of employers who do. Forced to pick up the tab and buckling under the weight of rising premiums, it’s no wonder the Economic Policy Institute reported that Massachusetts saw one of the largest percentage drops in employer-provided coverage in the nation between 2000 and 2004.
It’s a fail-fail system. So what’s it going to take to repair it?
For starters, we can begin playing with 52 cards - that means employers all must ante up. This ‘fair share’ model levies a fair fee on businesses that do not purchase coverage. The fee is part of the House plan here in Massachusetts, which, if passed, would require companies with more than ten employees to pitch in to a state health care fund.
Opponents argue that an individual mandate, requiring that all residents insure themselves and their families, should be enough. But these plans only further the disincentives built into our system. Employer after employer would drop their coverage knowing you’ll be stuck with the bill. That’s how it started with pensions.
Contrary to opponents’ views, the Foundation report found that the House plan would benefit the state’s business community by spreading out costs and relieving financial pressures on companies that purchase coverage.
When companies stack the deck, Massachusetts workers lose. It’s time for the state to make a lasting commitment to our working families and responsible business owners by passing a plan that includes a fair fee on employers.
Robert J. Haynes
President of the Massachusetts AFL-CIO