Wednesday, November 28, 2007

This Isn't Rocket Surgery

You could see it coming a mile away. The Mass mandate for employers to provide health insurance was sure to see some who would opt out.

And why not? The penalty for failure to provide health insurance for their workers?

$295 . . .

Still, I am surprised that only 500 firms chose the penalty over the coverage. Frankly, I thought it would be much higher.

Of course the participation and contribution requirements were a bit on the lean side.

Companies with 11 or more full-time-equivalent employees face the penalty unless 25 percent of their employees buy company-subsidized insurance or the company offers to pay at least one-third of employees' individual premiums.

Compare this to a typical group plan where employers are required to pay 50% of the employee premium and maintain 75% participation of the eligible employees.

But the 500 who failed to comply is only part of the picture.

the state required about 62,000 companies with eight or more employees to report by Nov. 15 whether they met the insurance standard. Nearly 44,000 filed, but more than half were too small to face the coverage requirement and almost all of the rest said they already provided insurance. So far, 518 have agreed to pay the penalty.

So let me see if I have my math correct.

62,000 firms had 8+ employees.

44,000 filed.

Half (22,000) were exempt under the law because they did not meet the minimum number of employees for required coverage.

Seems to me like the real number of employers who are not providing health insurance is more like 22,518 including the 518 who opted to pay a penalty.

"The Romney administration definition . . . has permitted many employers providing little or no coverage to their workers to escape fair share responsibility,"

Paying their "fair share". I hate that phrase.

"For example, if I offer to pay one-third of the premium and none of my employees take up the offer, I escape liability under the law even if I'm not covering anybody.

So in other words, government intrusion into the private sector isn't punitive enough . . . yet.

"This means that taxpayers are carrying and will carry a larger-than-anticipated burden,"

This guy must be one of those who think that employer paid premiums come from thin air. Employers suddenly, as if by magic, find the funds to pay for a government mandate without raising prices to their customers.

Did anyone study Economics 101 in school?

the Legislature had estimated that the "fair share" penalty on businesses would bring in $45 million

Extra credit for using "fair share" and "penalty" in the same sentence.

But the state did not collect any money last year, and the administration of Governor Deval Patrick had already downgraded the revenue estimate to $24 million for this year.

Oops! Sounds like a $21M short fall in revenues. Oh well, this is government we are talking about, not the private sector. Everyone knows the government has unlimited access to funds.

And, unlike the private sector, they don't have to increase prices (taxes). Wink, wink . . .

Enrollment in the state-subsidized insurance plan is outstripping expectations and could cost $147 million more this year than expected

Dang! Another $147M shortfall.

And how much new revenue does the state have to offset the loss?

518 x $295 x 8 (employees, minimum) = $1.2M

That's what we call a start.

In addition, the federal government has proposed rules that could cut more than $100 million from the state Medicaid program, another important component of financing the insurance initiative.

What's another $100M shortfall in the big scheme of things?

What is the total shortage at this point? Let's review.

$21M + $147M + $100M = $268M. I can almost do that without my calculator.

The Patrick administration yesterday declined to discuss how it might make up the shortfall.

Smart move.

The state still needs to find more than 18,000 employers who have not reported their insurance status.

The state can't find 18,000 employers?

Ask Lassie. They are probably stuck in the well.

But you just gotta love this parting shot.

"Individuals are going to pay [more] than employers will. How is that fair?"

Sounds like Socialism is rampant in Massachusetts.
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