Senate Conference Committee Letter

January 7, 2006

Dear Chairwoman Walrath,

We are very encouraged by the progress we continue to make on the health care reform Conference Committee. Our charge ­ to arrest health care costs and extend health care coverage to every Massachusetts resident ­ is extremely challenging. As you very well know, health care comprises nearly half of our state’s budget and represents our largest employer. Reforming the Massachusetts health care system and analyzing its billions of dollars in spending is complicated.

Given the many complexities and uncertainties associated with the major policy changes we are considering, we strongly recommend that before turning to further negotiations on language and details, the Conference Committee:

1. achieves consensus on realistic spending targets for the expansions and rate initiatives included in the bill; and
2. agrees on a long-term revenue source that is adequate to meet those spending targets, and that is sustainable ­ at bottom, a revenue structure that does not disrupt the predictability of the state’s tax structure and does not impair the Commonwealth’s delicate economic balance.

Over the last several weeks, various groups have completed exhaustive reports that either raise questions about both the House and Senate’s respective proposals or comment specifically on our revenue assumptions. We are especially concerned with the December 2005 report submitted by the Massachusetts Taxpayers Foundation, titled Health Care Reform: Expanding Access Without Sacrificing Jobs, which raises serious questions about the amount of revenue generated by the House of Representatives’ employer tax. Given the analysis by the MTF, we have serious concerns with the House proposal, especially since it appears that the $650 million that was originally proposed may only generate $175 million in revenue. In addition, the House plan assumes the use of approximately $25o million in Tobacco Settlement funds that are already used to support state spending. At the same time, some have questioned whether the Senate version of the bill includes adequate revenue sources to fund spending commitments over the next few years.

In order to deliver a viable health care reform bill that is prudent and fiscally balanced, we believe that the Conference Committee should carefully reevaluate our respective proposals’ fundamental fiscal assumptions.

If you agree that our next step should focus on these areas of concern, we would be open to soliciting analysis and input from the administration, academic experts, MTF, and other organizations. We look forward to working together to seize this unique moment and deliver a health care reform bill that controls the rising cost of health care and moves boldly toward health care coverage for everyone in Massachusetts.

RICHARD T. MOORE
Senate Chair, Joint Committee on Health Care Financing

THERESE MURRAY
Chair, Senate Committee on Ways and Means

BRIAN P. LEES
Senate Minority Leader

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