WHY THE “FAIR SHARE” BILL VETO SHOULD BE SUSTAINED

The bill doesn’t solve the problem. The 740,000 Maryland residents without health insurance need help. Employers and employees are unable to afford health insurance due to rapidly rising health care costs. This bill does nothing to solve that underlying problem or guarantee that one additional person will receive health insurance. To the contrary, it will cost people their jobs and with it their health insurance. That’s why the Washington Post denounced the bill and the Baltimore Sun supported the Governor’s veto.

Federal Law prohibits states from enacting such laws. The Employee Retirement Income Security Act (ERISA) exists to eliminate the possibility of a tangle of State laws impacting employee benefit plans, and instead to create a single, comprehensive, thoughtful, federal regulatory scheme for employer-provided benefits.

The bill is a significant threat to all Maryland businesses. Through this bill the General Assembly has declared that businesses must provide health insurance to their employees and the legislature will mandate the appropriate level of annual health insurance expenditures. The bill serves as the framework for the certain expansion of this health care mandate to all employers in the future. Proponents of this bill have spent the last six years pushing a $1 billion universal health care plan, and that remains their objective. News accounts after the 2005 session have confirmed that the bill’s proponents will seek to extend this law to tax smaller employers.

The bill imposes an arbitrary payroll tax. If the goal is to expand access to health care, why attack companies that already offer health insurance? The bill arbitrarily creates a government imposed quota of 8 percent of payroll for health care expenditures for Maryland companies with over 10,000 employees. There is no rationale for these standards. Each of the four companies in Maryland with over 10,000 employees already offers health insurance – as do 99% of all employers with over 200 employees.

Picking on one company is unfair and bad policy. There are over 150,000 employers in Maryland. Four companies would be subject to the bill. One would pay the payroll tax. That’s not fair. In fact, the bill is a thinly-veiled attack on Maryland’s largest retailer for reasons that have little to do with health care. Singling out one company for a new tax is bad public policy.

The bill will cost Maryland jobs. Maryland is not an island. Imposing a health care mandate on Maryland employers that no other state has enacted will place our businesses at a competitive disadvantage. Every Maryland job is 30 miles or less from the state line. This bill has already caused immeasurable damage to Maryland’s business image and threatens the state’s economic development efforts.

No job means no health insurance. This bill will actually deny people health insurance as jobs are lost. For example, Wal-Mart was scheduled to build a major distribution center on the lower eastern shore that would have created 1,000 jobs in an area of high unemployment. Those jobs would have come with health insurance. Typically 40 percent of Wal-Mart employees have no health insurance prior to joining the company. Wal-Mart has now announced that they are delaying construction for several years, and the future of the facility remains in doubt.

A better solution would be:

• For the State to help small employers with ways to provide health insurance. Only about one-half of businesses with fewer than 10 employees can afford health insurance;
• To enact reforms for the small group health insurance plan to reduce costs and provide more competition; and
• To enact medical liability insurance reforms, such as the Governor has proposed, to help stem defensive medicine and eliminate needless costs to doctors and hospitals.