Governor Ned Lamont deserves credit for trying to address a real problem: rising health insurance costs and uncertainty about federal support for Medicaid and Affordable Care Act subsidies. But his proposed “fair share” healthcare assessment, a $1,000 fee on employers for each worker enrolled in Medicaid, is the wrong solution for Connecticut.
The proposal would effectively penalize businesses for employing workers who qualify for Medicaid. That may make for an attractive political soundbite, but it ignores the economic realities facing industries such as food retail, hospitality, and healthcare, which employ large numbers of frontline workers, part-time employees, students, and seasonal staff. At a time when Connecticut families are struggling with affordability and businesses are grappling with rising costs, the state should not impose yet another tax on employers.
For Connecticut grocers, the timing could not be worse.
Food retailers operate on razor-thin margins, often less than two cents on the dollar. They are already grappling with rising labor costs, higher energy prices, increased transportation expenses, and escalating costs for insurance, technology, and regulatory compliance. Many stores have invested heavily in wages, training, and employee benefits while working to keep grocery prices affordable for consumers who remain sensitive to every dollar spent at the checkout.
A Medicaid assessment would impose yet another cost burden on an industry with limited capacity to absorb new expenses. Ultimately, policymakers should ask: Who pays? The answer is everyone. Businesses may delay hiring, cut investments, scale back benefits, or pass costs on to consumers through higher prices.
Connecticut has been down this road before.
Between 2005 and 2010, lawmakers studied so-called “fair share” healthcare proposals multiple times. The General Assembly never adopted them because the concerns remain the same today as they were then: these policies risk making Connecticut a more expensive place to do business while doing little to address the underlying drivers of healthcare costs.
Ironically, Governor Lamont has spent much of his tenure promoting Connecticut as a business-friendly state. He has rightly resisted broad tax increases and worked to improve the state’s economic competitiveness. This proposal departs from that approach.
Maintaining affordable healthcare coverage is a worthy goal. But financing it by imposing targeted fees on employers sends the wrong message at precisely the wrong time. Connecticut should pursue policies that encourage job growth, reward investment, and strengthen partnerships between government and the private sector, not create new penalties for businesses that employ thousands of Connecticut residents.
Food retailers stood shoulder to shoulder with the state throughout the pandemic. They kept stores open, implemented safe store protocols, distributed infant formula during shortages, and partnered with Connecticut to administer emergency SNAP benefits and other food assistance programs. They continue to invest in their communities and remain an essential part of the state’s social safety net.
If Connecticut wants to remain affordable, it cannot keep shifting costs onto the businesses that provide jobs, pay taxes, and feed our communities.
The challenge before us is not whether we support access to healthcare. We do.
The question is whether Connecticut can solve one affordability problem by creating another. The answer should be no.