House and Senate Pass Changes to FY’12 Budget

I joined my colleagues in the Massachusetts Legislature today in finalizing changes to the FY’12 budget. We adopted Governor Patrick’s amendments including four that strengthen the municipal health care reform section of the budget.

The administration, legislature, labor, and municipal officials have worked hard to produce this thoughtful solution to our rising municipal health care costs. I am pleased we were able to come to this middle ground and create a solution that will offer needed relief to taxpayers while still preserving a voice for employees and retirees. This is leadership at its best; representatives from all sides sitting down and working out a solution together.

Like earlier proposals, the final municipal health care reform plan allows municipalities to alter co-payments, deductibles and other plan design features so long as such features are no greater in dollar amount that those offered by the Group Insurance Commission (GIC)  plan with the largest subscriber enrollment. The plan does not alter collective bargaining rights associated with premium splits.

The Governor’s changes include lengthening the moratorium on changes to retiree premium cost-sharing agreements from two to three years. The final agreement also returns up to 25 percent of the total savings gained through plan design changes to employees to help offset higher co-pays and deductibles. Cities and towns looking to move employees into the GIC must allow show that the savings would be 5 percent greater than those possible through local plan design changes, as joining the GIC limits employee rights to bargain over which health plans are available to them. Finally, the language in the budget limits plan design changes to those related to “co-payments, deductibles, or other plan design changes,” so that changes are not applied to alter benefits like mental health coverage which are outside of collective bargaining.

The plan received broad based support from municipal officials and labor organizations. The Massachusetts Municipal Association applauded the administration’s and legislature’s efforts saying these changes, “will deliver an effective and meaningful reform bill that saves taxpayers money, preserves essential local services, protects municipal union jobs, guarantees equity with state employee health benefits, and continues to provide municipal unions with more bargaining power than state unions.”   

Robert Haynes, President of the AFL-CIO offered his support, stating, “the Legislature and Governor were able to achieve savings in a way that allows unions to be a part of the solution”. Paul Toner, President of the Massachusetts Teachers Association echoed his sentiments, saying the changes meet labor’s main concern, “which has all along been protecting [employees] from high out-of-pocket costs in their health insurance.”

The changes municipal health insurance, along with the rest of the fiscal FY’12 budget go into effect today.