Capping small group health insurance renewals

In the mid 1980's the City of Worcester switched to a dual tax system:

1. Residential
2. Commercial

At the time the tax base was 60% residential and 40% commercial. Over the past 20 years we have seen the local politicians vote for consistently for the "lowest residential" tax rate to appeal to their voter base. Today, we have a residential tax rate of $15.15 per 1,000, while the commercial rate is at $33.28 per 1,000. If you have a commercial building assessed at $100,000, your tax bill is $3,328 per year.

If you were a business and were deciding to open in Worcester (33.28 per 1,000) or one of the surrounding towns, which mostly all have one tax rate, that has tax rates typically 1/3 of Worcester, where would you go? Not Worcester, that is exactly what has happened. Today our Commercial tax base is less then 20% and although we still vote lowest residential rate each year, the tax burden on the residents increases as businesses leave and new business is hard to attract.

Lets assume there is a 5% cap placed on small business health renewals. What effect do you think that will have on large group renewals? Their increases will be even worse to subsidize the "capped" small group renewals. What message does that send large businesses operating in Massachusetts or thinking of coming to Massachusetts? Go somewhere else.

Although it may sound good at first glance to put a cap on small group health insurance increases, the long term effects of driving larger businesses out of the Commonwealth of Massachusetts is not good for anyone, including small businesses. Maybe we should provide real relief and reform:

• allow small businesses to buy health insurance with prescription coverage (represents about 10% of the monthly premium) and still meet MCC standards
• stop the never ending open enrollment problem, where people jump in and out of the system, while leaving us with the claims
• add an asset test in order to be eligible for Commonwealthcare
• audit subscribers to Commonwealthcare and make sure that they are not in fact eligible for their group sponsored plan
• consider a plan for small groups that does not include all the state mandates (this would be hard to do), but large companies that self-insure are able to do this?

Address the problem with concrete changes that will actually provide relief to small businesses, not just shift their increases to large companies and make Massachusetts any more business unfriendly.