Who is a member?
Our members are the local governments of Massachusetts and their elected and appointed leadership.
Dear Legislator,
On behalf of the cities, towns and local taxpayers of Massachusetts, it is essential that you and your colleagues act now to pass reform legislation to give municipalities control over skyrocketing health insurance costs. This vital reform would give local officials the same power the state has to shape employee health plans, and save taxpayers up to $100 million a year. This call for plan design reform has been embraced by municipal leaders from across the Commonwealth, and by leading organizations, including the Massachusetts Taxpayers Foundation, Associated Industries of Massachusetts, the Boston Foundation, the Boston Municipal Research Bureau, and others.
Over the past several days, the Boston Globe has provided a rich outline of the crisis in municipal health costs, and today The Boston Foundation released an 80-page report, “The Utility of Trouble – Leveling the Playing Field: Giving Municipal Officials the Tools to Moderate Health Insurance Costs.” The Boston Foundation’s conclusion is that we must “level the playing field between state and local health benefits management by removing the requirement that municipal officials must collectively bargain plan design changes.”
Local aid was cut by $724 million last year. Communities are in fiscal crisis, and health insurance reform offers meaningful savings and relief that taxpayers deserve. There is no excuse for keeping the unique and special veto power that municipal unions hold over health plan changes – this veto power is costing taxpayers millions of dollars a year, forcing cuts in essential municipal and school services that are getting crowded out by soaring health costs, and forcing the elimination of teachers, firefighters, police officers and other union employees. Without real reform, taxpayers will continue to pay millions more than they should, which will force even more service cuts and layoffs.
Local Taxpayers are Forced to Pay Millions More for Employee Health Benefits
While health insurance costs are a problem for everyone, municipalities have been forced to pay much more than necessary because of Chapter 32B, the state law that gives municipal unions a veto over common-sense changes that would reduce the cost to taxpayers. Over the past ten years, cities and towns have seen their health insurance costs rise by over 150 percent. Health insurance is the biggest budget buster at the local level, accounting for as much as 15 percent of local budgets, squeezing out vital services and costing local taxpayers more and more every year. The state has been able to moderate the cost of employee health benefits by implementing increases in co-pays and deductibles, just as the federal government and every private employer have done. But communities have been blocked by the Chapter 32B bargaining mandate, and are trapped in outdated plans that are too costly.
Local Government Needs the Same Authority the State Uses to Design Health Insurance Plans
Cities and towns are locked into overly expensive health plans because they cannot gain the required union approval to implement cost-savings, while the state has exempted itself from this mandate, and routinely implements basic decisions on health insurance outside of collective bargaining, such as increasing co-pays and deductibles to lower the cost of their plans. The state must end this double standard by giving cities and towns the same authority to design health insurance plans outside of collective bargaining. This one reform is the most effective way to bring immediate fiscal relief to all cities and towns, and is urgently overdue. We estimate that most cities and towns would be able to lower their health insurance costs by between 4 and 6 percent, or as much as $100 million statewide. For example, the city of Boston could save well over $1 million a month, and the city of Salem could save $1 million a year. This is real savings that taxpayers deserve.
Of course municipal unions oppose this reform. That’s not a surprise, but as the Boston Foundation points out “The growing cost of health care is a job-killer. We have union leadership that is reluctant to see changes, but how can they accept a situation that makes municipalities grow steadily weaker and less able to maintain the workforce they need? We need unions to align themselves with the communities they serve.”
Last year, a special commission issued a report that included what it called a compromise approach, but that proposal was fundamentally flawed. It offered no plan design relief, and actually increased the collective bargaining leverage of unions to block changes unless the taxpayer savings went to benefit concessions, and even proposed creating an unprecedented binding arbitration provision, completely contradicting the voter’s position on this when binding arbitration was eliminated as part of Proposition 2½. In short, the draft went in the opposite direction, and was actually a step back from the status quo, meaning it was not a compromise measure at all, and we communicated this from the very beginning. The real challenge is to center any reform legislation based on taxpayer equity, giving local officials basic tools that work, and ensuring that there will be real savings that can be used to preserve services and prevent layoffs.
H. 2509 Would Give Plan Design Control to Cities and Towns
The Massachusetts Municipal Association endorses H. 2509 to eliminate the double standard in state law and give cities and towns the same power the state has to implement necessary cost savings changes in municipal health insurance plans. This is a very focused and moderate proposal. Under the bill, municipalities would still negotiate any changes in the employee-employer premium share, giving municipal unions more bargaining authority than state unions. Municipalities would be able to modernize the health plan design outside of collective bargaining, with a guarantee that all municipal and school employees would still have health plans that are the same or better than what state employees receive, meaning no municipal plan could have higher co-pays or deductibles than the state. The bill simply gives plan design parity to cities and towns.
In short, the legislation saves taxpayers money, protects municipal union jobs, guarantees equity with state employee health benefits, and still leaves municipal unions with more bargaining power than state unions. This is a balanced, meaningful and fair reform.
Communities are facing a true fiscal crisis. This is the time for real reform and real action. This is the time to pass plan design reform – further delay will only serve to hurt taxpayers, municipal employees and the public.
Thank you very much.
Sincerely,
Geoffrey C. Beckwith
Executive Director, MMA