Bailey buys into business BS

Steve Bailey, the Globe’s usually-sensible business columnist, has joined the ranks of the “hopelessly confused by big business talking points,” at least on health care.  (I discussed Michael Widmer’s entry in that derby here.)

Today’s column does provide a useful service: he has managed to put together what he believes to be the AIM/Chamber of Commerce “alternative proposal” to DiMasiCare, details of which have yet to be confirmed by anyone, but which he assembled through interviews with undisclosed sources.  Of course, these folks all think the “payroll tax” aspect of DiMasiCare is one of the four horsemen of the apocalypse.  Here’s what Bailey thinks they’ll propose instead:

1. Budget set-asides. Reversing his previous stand that no new money was needed to fund healthcare expansion, Governor Mitt Romney has proposed $200 million to fund the first year of the effort. Business groups, adopting a proposal put forward by the Massachusetts Taxpayers Foundation, want the state to earmark $200 million for the first year, $400 million for the second year, and $600 million for the third year.

2. Using pretax dollars. Many companies now allow employees to buy health insurance using pretax dollars; many do not. The business proposal would mandate that all employers offer these plans.

3. The free-care pool. Companies that provide health insurance to employees now contribute about $160 million to the state free-care pool through an assessment on health insurers. DiMasi’s plan would end that assessment. The business groups are telling the House and Senate to keep the assessment and expand it to companies that don’t currently pay into the fund because they don’t offer insurance to their workers. Estimated revenue: another $30 million to $40 million a year.

OK, let’s take these one at a time.  First, the easy one: #2 (pretax dollars for health care).  Hard to object to that one, but of course it does not really address the problem – it just makes it marginally easier to buy whatever health care is available to you.  Doesn’t really qualify as a plan; it’s at best a tweak, if a good one.

Working back to #1, large budget set-asides by the state to pay for expanded health care programs – $1.2 billion over three years, and no doubt billions more in subsequent years.  Well, has anyone bothered to wonder where that money is going to come from?  Bailey clearly has not – he notes that John McDonough has already raised the point that such large budget set-asides will not be sustainable when they are most needed – in periods of economic downturn – and that they will either have to be financed by a tax hike or by cutting other programs.  But Bailey does not address the point, and is apparently unbothered by it.  And this guy is supposed to understand money?  Pathetic.

And finally, to point #3: force companies who don’t insure their employees to pay assessments into the free care pool.  Doesn’t that kind of sound like … well … a payroll tax?  I am truly confused by this – if AIM/Chamber’s big objection to DiMasiCare is that it burdens businesses who don’t provide health care by imposing additional costs on them, how can they possibly be proposing doing exactly that as their “alternative”?  Moreover, they are saying that they want to keep charging free care assessments to employers who already pay for their employees’ health care?  Weeooweeoo!  Bizarro warning!

Seriously, this proposal, which Bailey for some reason thinks is a “step in the right direction,” strikes me as utterly half-assed.  Basically, they want the state to come up with billions of dollars in set-asides without explaining how to pay for it, they want to keep penalizing employers who already pay for health care, and they want to create a new tax on employers that they say they don’t want to hit with a payroll tax.  What can they possibly be thinking?

Oh yeah – they’re not.

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