For immediate release – For more information, please contact Geoffrey Beckwith or Patricia Mikes at (617) 426-7272

Local control over health insurance plans would save taxpayers $100 million

The Massachusetts Municipal Association today called on the Legislature and Governor to immediately pass reform legislation to give cities and towns control over skyrocketing health insurance costs and allow local officials to save taxpayers up to $100 million a year.

The association called for passage of House Bill 2509 to give health insurance plan design authority to local officials and end the special veto power that municipal unions use to block local efforts to make health plans more affordable. The legislation would allow municipal leaders to implement important cost-saving measures and bring down the cost of health coverage for municipal employees.

“This vital bill will save community services and union jobs,” said MMA President William Scanlon, the mayor of Beverly. “It is in part a jobs bill. It is the reform we need to provide equity and relief for local taxpayers, protect essential public safety, municipal and school services that are being crowded out by the high cost of health insurance, and preserve jobs that are very important to our local economy.”

Over the past 10 years, cities and towns have seen their health insurance costs rise by more than 150 percent, while spending on everything else, including public safety, education and road maintenance, has increased by only about 30 percent, according to the MMA. Health insurance now accounts for as much as 15 percent of local budgets, and is squeezing out vital services and costing local taxpayers more and more every year.

“Cities and towns have been forced to pay much more than necessary for employee health insurance because of a state law that gives municipal unions a veto over changes that would reduce the cost to taxpayers,” said MMA Vice President and Natick Selectman Joshua Ostroff. “Without real health insurance reform, we will continue to pay too much for health benefits, which will force even more service cuts and layoffs while local taxpayers pay millions more than they should.”

Local officials have struggled to control health insurance costs, but they operate under Chapter 32B, a state law that requires communities to negotiate and receive union approval before implementing any changes in their health insurance plans, while the state has exempted itself from this law and routinely implements basic plan-design decisions on health insurance outside of collective bargaining, such as increasing co-pays and deductibles to lower the cost of the plans they offer to state employees. Municipal unions have lobbied hard on Beacon Hill to block the reform measures that would allow local officials to control local health plans.

“The Legislature and the governor must give cities and towns the same authority they use to design employee health insurance plans outside of collective bargaining,” said MMA Executive Director Geoffrey Beckwith. “This one reform is the only effective way to bring immediate fiscal relief to all cities and towns, and it is urgently overdue.”

The MMA estimates that plan design reform would allow most cities and towns to lower their health insurance costs by between 4 and 6 percent, or as much as $75 million to $100 million statewide. The city of Boston, for example, could save more than $1 million a month. The city of Salem could save $1 million a year.

“Communities are facing a real fiscal crisis, and health insurance reform offers real savings that taxpayers deserve,” said Ostroff. “There is no excuse to keep the unique and special veto power that municipal unions hold over health plan changes. This veto power is costing taxpayers and forcing the elimination of teachers, firefighters, police officers and other union jobs.”

“This legislation is written so that cities and towns will save millions of dollars while guaranteeing that municipal and school employees will continue to receive health benefits that are equal to or even better than what state employees receive,” said Scanlon. “In short, this bill saves taxpayers money, preserves key local services and programs, protects municipal union jobs, and guarantees equity with state employee health benefits. This is a balanced, meaningful and fair reform that must pass now, because further delays will only hurt taxpayers, municipal employees and the public.”

The Massachusetts Municipal Association is the statewide nonprofit, nonpartisan association that serves as the voice of local government. The association provides advocacy, training, publications, research and other services to Massachusetts cities and towns. The MMA is the only organization that brings municipal officials together to establish unified policies, to advocate these policies, and to ensure the effective delivery of services to community residents.