Letter from State Sen. Donnelly: Tough Choices in Difficult Times

The following is a letter from State Sen. Kenneth Donnelly:

The rising cost of health care is putting an enormous strain on the budgets of employees and employers in both the private and public sectors. Recently, in an attempt to address the serious issue our cities and towns face in Massachusetts, the State Senate proposed a municipal health insurance reform package.

As a result of these difficult economic times, in an unprecedented move, the Senate removed unions’ rights to collectively bargain over health care plan design. The Senate plan allows cities or towns to adjust   the dollar amount of their co-pays, deductibles, tiered provider network co-payments and other plan design features up to the dollar amount of the median plan offered by the state’s Group Insurance Commission (GIC) or, if even greater savings can be had, to transfer coverage to the GIC. The savings are gained by shifting the cost of health insurance to the employees and retirees. Instead of the municipality paying large insurance premiums, the employees and retirees pay more co-pays, deductibles and out of pocket costs. While they have a seat at the table, labor cannot veto health care plan design changes.

Along with allowing municipalities to make plan changes, the Senate proposal provides meaningful protections for subscribers. The plan requires that a portion of the savings that come with municipal plan design or transferring into the GIC be used to moderate, cap or mitigate the increased co-pays, deductibles and other out of pocket expenses for subscribers. These protections cover union and non-union municipal employees and their families, and, equally important, retirees; many of who are on fixed incomes. The average municipal retiree pension is $11,500 and many retirees pay at least half of the insurance premium along with all or half of the cost of their Medicare Part B premium. This results in retirees and their spouse paying well over a third of their pension benefit on health insurance and that is before out of pocket expenses are factored in.  The Senate plan has safeguards to ensure that municipalities adequately cover retirees, low-income earners, and those heavy users of health care. Without these protections, many are left with health insurance they just plain can’t afford.

The Senate plan works. It does not unduly shift the cost burden to the elderly or those with chronic illness or a medical emergency. It mitigates the cost for those who need healthcare so that they are not choosing between seeing a doctor and paying the mortgage or buying food. It saves money for our cities and towns.

We know that the answer to this problem lies in cost containment. Trying to solve the problem of skyrocketing municipal healthcare costs with the tools we have is like putting fingers in the holes in the dam to stop the oncoming rush of water.

I am proud of the commitment and leadership the Senate is taking in reducing the cost of healthcare and Massachusetts is leading the nation in cost containment. The right solution will change the way we deliver healthcare over months and years. But in the meantime, while we take on these enormous challenges, the Senate plan provides municipal savings along with real protection for those who are sick or elderly. It does not save money by making healthcare so expensive that it is unusable.

The Senate’s commitment to protect against unaffordable health care for municipal employees and retirees should be a commitment we make for all our residents regardless of where they work or whether they are young or old. Providing those protections should be a shared goal regardless of which side of the municipal healthcare debate you are on.