Tuesday, May 22, 2007

State Health Insurance Should be Optional

There's one small problem with the healthcare compromise that Scot Lehigh proposes in his column today. Here's how the Lehigh proposal would work:

Cities and towns would be allowed to raise meal and lodging taxes, subject to two conditions. First: Before they did so, the locality would have to enroll in the state [health] insurance program.
Second: Local voters would have the final say on the proposed tax increases, voting on them just the way they currently do on proposed Proposition 2 1/2 overrides.
So, in order to raise any meal or lodging taxes, communities would be forced into the GIC. The only problem with this, is that some communities may already be in insurance programs that are slightly lower-cost than the state's. In order for them to be able to raise revenue through the meals tax, they'd end up with a more expensive health plan for their employees. That does not seem like a good deal. Communities should not be forced to join the GIC if they're already doing better for themselves. It may be true that the GIC's rates will grow more slowly, so that eventually it will be lower cost than any program a municipality might have, but there's no reason to force adoption of the state plan now if it's not going to be cheaper until some point in the future.