Municipal Health Care: A Step In The Right Direction

Municipal health care reform has been a hot topic on Beacon Hill this session. I have heard from my municipalities, constituents, and labor leaders on the merits of various proposals and potential concerns.

Most importantly, we all need to remember we are working towards the same goal: cost savings. The recession has affected everyone in Massachusetts; Individuals, families, businesses, towns, and the Commonwealth are all looking for ways to cut costs and save money wherever possible.

Across the country, labor unions are fighting to preserve their rights to collectively bargain as some cities and states curtail their power in an attempt to control costs. We should be proud that Massachusetts has developed a plan that yields approximately $100 million in statewide savings and maintains a significant voice for municipal employees and retirees.

The new plan, including the Governor’s amendments, strikes an appropriate balance between municipal health care cost savings and protecting the rights of employees and retirees. The main provisions of this reform include:

• Municipalities can choose to propose plan design changes or transfer coverage to the Group Insurance Commission (GIC).
• Municipal employees can collectively bargain with management on the proposal for 30 days.
• Municipalities will be required to include a plan to mitigate the impact of their proposed changes on vulnerable subscribers (this includes retirees, low-income subscribers, and high health care utilizers).
• There is a moratorium on any changes to retiree cost-sharing agreements for 3 years.
• If after the 30 day period, no agreement is reached, the proposal will be submitted to a Municipal Insurance Review Panel. This panel will consist of one member from both sides and a 3^rd member to be mutually selected from a listed of neutral applicants.
• The panel will have 10 days to review the proposal and determine (1) if the savings in the GIC would be 5% more than any savings possible through other local plan design changes and (2) if the mitigation plan for subscribers adequately protects employees and retirees. If the proposal meets these requirements it will be approved by the panel.
• The reform guarantees that the municipalities will receive no less than 75% of the total savings generated. The remainder would be given to employees and retirees.

This establishes a process with incentives for both sides to work together within a 40 day window on health care changes.

Municipal health care costs pose a major threat to cities and towns who are already fighting to deal with declining revenues and local aid cuts. This reform is necessary tool for cities and towns to address spiraling municipal health care costs.

The battle over health care costs is far from over and the next frontier is cost containment. In order to win this battle, it will require the high level of collaboration, cooperation, communication and hard work that went into municipal health care reform.  The private sector and the public sector have been severely impacted by skyrocketing health care costs.

This is one of the most critical issues we face. Now is the time to roll up our sleeves, get to work and get results.  The public expects this from us, and they deserve no less.