Thus the extra tab of $129 million, which may need to go higher because it relies on uncertain federal funds from Medicaid. For now, Mr. Patrick wants one-time (yeah, right) charges of $33 million on insurers and $28 million on providers, plus some shuffling of state funds. The balance comes from an estimated $33 million boost in the state’s “pay or play” tax: If businesses don’t offer “fair and reasonable” insurance to their employees, they get hit.
This is a textbook example of how business taxes evolve into “pay or pay,” the first recourse of state-funded health systems. Politicians love levies on business because they disguise the overall bill from voters. But such taxes are merely passed along to workers in the form of reduced take-home pay, since all health costs are part of compensation. …
The Bay State has long served up coverage-specific insurance mandates, such as for fertility treatments, which raise costs. Yet in a just-deserts twist, Massachusetts health planners are now reviewing ways to trim mandates because the state is footing more of the bill, even if they didn’t care when imposing them on individuals and small business. A state-sponsored study shows that total spending on mandates was $1.32 billion in 2005, or 12% of premiums. The study is devastating despite its pro-mandate slant.
Wall Street Journal on the escalating costs of the Massachusetts health care plan (RomneyCare):