Richard Lord & Bill Vernon, Boston Herald, June 25, 2008

Health-care costs are rising faster than Massachusetts businesses can afford. So why would anyone want to add to those costs?

Policymakers on Beacon Hill are considering doing just that. While talking about ways to curb rising health-care costs, they are also considering measures that will push costs higher.

This week, for example, the House will consider a bill that would mandate unlimited coverage of mental health services, even though Massachusetts’ current mandate is among the most generous of any state in the nation.

Already, Massachusetts ranks among the states with the most mandated health benefits. While a case can be made for any one mandate, together they add significantly to the cost of health care - 15 cents of every new health care dollar.

As part of the Massachusetts health-care reform law, policymakers included a moratorium on all new mandated benefits until a state review of the costs of existing mandates was completed. That review has not been completed, so the moratorium is still in effect. So not only would the proposed new mandate increase health-care costs, but it would violate the new law.

Meanwhile, there are growing calls for additional financial contributions to the new health-care reform law from employers, even though businesses have already increased their health-care spending by an estimated $500 million under the law.

Employers pay the lion’s share of the health-care dollar. More than four out of every five insured individuals in this state under the age of 65 receive coverage through an employer, with Massachusetts businesses paying on average 75 percent of the premium.

When costs go up, employers bear the bulk of the increase, which leaves less money for companies to grow their businesses and create new jobs. This is particularly true for small businesses, which function as the economy’s main engine. Of the 175,000 businesses in Massachusetts, more than 85 percent of them are employers with fewer than 20 employees. Small businesses create more than two-thirds of the new jobs in our state every year.

Increasing energy, labor and housing costs present significant obstacles to our economic competitiveness. In the face of a slowing economy, increasing health-care costs will put even more pressure on the economy and discourage new companies from opening, expanding or moving here.

With health-care costs continuing to rise at double-digit rates, solutions need to focus on controlling those costs, not piling up more costs on employers.

Taking another bite out of business may seem like an easy cure, but it’s the wrong prescription.

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