In Massachusetts, there's good news and bad news on the health-care front for small businesses. The good news is that the Massachusetts' Senate and House are coming closer to a compromise to provide the state's uninsured with health-care coverage. The bad news is that a controversial payroll tax still seems to be on the table, much to the chagrin of Mass.-based business leaders.
A Boston Globe article reports today that Governor Mitt Romney has promised to set aside $200 million for health care in Mass., but the funds are in addition to the payroll tax-based plan the House of Representatives approved last year, not a substitution for the tax. A Senate plan also passed last year requires large employers to pay for employees who tap the "free-care" system in the state, but covers far fewer individuals. Both parties are trying to reach a compromise before July 1, when the state risks losing $385 million in federal matching funds.
Romney's $200 million promise would lessen the payroll tax load, but certainly wouldn't cover the ongoing cost of covering the uninsured, which is why the tax is still on the table. However, most small businesses don't provide health insurance because, simply, it's unaffordable, which leads me to believe that a payroll tax would just further burden businesses operating on thin margins. Businesses burdened by increased taxes could layoff employees, and at the very extreme, close their doors, hurting the very resource the state wants to tap to fund its health care plan. A bit of a Catch-22, don't you think?