Latest numbers undercut need for health care tax

THE LATEST DATA for the state’s MassHealth program indicate enrollment has stabilized, suggesting the assumption behind Gov. Charlie Baker’s health care tax on employers – that Medicaid rolls are soaring – is not supported by the evidence.

In a previous column, I pointed out that enrollment had declined in November and December 2016 to the level of December 2015. This week the administration published enrollment data for the first three months of 2017, and the numbers further suggest that enrollment in the Medicaid program has stabilized.

Medicaid enrollment totaled 1,851,017 on December 31, 2015. Enrollment rose gradually through 2016, reaching a high of 1,906,004 in October, and then declined for four straight months to 1,831,197 in February 2017, followed by an uptick in March to 1,853,856. The striking conclusion is that enrollment now stands at virtually the same level as it did 15 months ago.

In proposing an assessment on employers (I consider it a tax) last January, the administration contended that enrollment would soar to 1.93 million in fiscal 2017 and to 2 million by the end of fiscal 2018. Where is the evidence that enrollment will jump by 150,000 over the next 15 months when it has been stable over the past 15 months?

If Medicaid enrollment continues in the 1.85 million to 1.9 million range, there will be a savings of between $500 million and $1 billion in the 2018 budget. That’s one piece of good news in an otherwise bleak financial picture, but it knocks the legs out of any rationale for the employer tax. The state needs a comprehensive strategy to address its serious fiscal problems. An ill-advised tax on employers that has no connection to the Medicaid problem is an unfortunate sideshow at best.

Michael Widmer is the former president of the Massachusetts Taxpayers Foundation, a business-backed group that watchdogs state fiscal policy.