Who is a member?
Our members are the local governments of Massachusetts and their elected and appointed leadership.
Dear Representative,
Skyrocketing health insurance costs have been crushing local budgets and forcing cuts in essential municipal and school services. Fortunately, relief is on the way, but only if you vote to support the municipal health insurance reform proposal included Section 46 of the House Ways and Means Committee’s fiscal 2012 budget recommendation. We commend Speaker Robert DeLeo and Chairman Brian Dempsey for recognizing the need for true reform and proposing a plan that offers powerful relief for local taxpayers and all communities.
The reform in Section 46 would simply give cities and towns the same power the state has to update co-pays and deductibles in municipal health insurance plans, saving local taxpayers $100 million in avoided health costs. As you know from your own health plans, the Commonwealth has used its authority to make adjustments in co-pays and deductibles to hold down the state’s overall costs. Communities, however, are blocked from making the same changes unless they receive permission from their municipal unions. As a recent MTF/Boston Foundation report documents, this has caused municipal health insurance costs to spiral out of control, forcing cuts in education, public safety and other vital programs, and forcing the elimination of teachers, firefighters, police officers and other key employees from local budgets.
Cities and towns will use the House Ways and Means Committee’s plan design reform to provide relief for local taxpayers, protect essential services, and preserve thousands of municipal jobs. Speaker DeLeo and Chairman Dempsey’s plan would do the following:
• Cities and towns would be able to change the co-pays and deductibles in employee health plans up to the same level that state employees have in the most subscribed plan offered by the state’s Group Insurance Commission, meaning municipal employees would be guaranteed health plans that are as good or better than the coverage for state employees;
• Communities would also have the power to join the GIC if they demonstrate that joining the GIC would provide more savings than making plan design changes on their own;
• Ten percent of the savings or costs avoided in the first year would be set aside to fund a health reimbursement account that would be structured based on an agreement between municipalities and their unions, providing resources to offset costs for heavy users of the health care system; and
• Cities and towns would preserve collective bargaining for any change in the employee-employer premium share or any proposals to have higher co-pays than the state, leaving municipal unions with more collective bargaining authority over health insurance than state employee unions. Municipal employees would benefit from the legislation in three ways: union jobs would be protected, employee premiums would be lower, and communities would establish health reimbursement accounts to offset a portion of the costs for those employees who are heavy users of the health care system.
On behalf of cities and towns across Massachusetts, we are writing to urge you, in the strongest possible terms, to SUPPORT Section 46 and to OPPOSE Amendment 749, which would eviscerate the reform.
In contrast to the clear reform and transparency of the House Ways and Means proposal, Amendment 749, the labor-backed “alternative,” is deficient in almost every way. Incredibly, Amendment 749 is so flawed that it would be even worse than no action at all. The language would:
• Prevent any change in municipal co-pays or deductibles (or any other plan design feature) in fiscal 2012 unless 70 percent of municipal unions agree, then impose a three-year moratorium on any further health plan changes unless unions agree otherwise, then permanently impose the deeply flawed Section 19 coalition bargaining process on communities, which would allow one or two unions in a community to permanently control all health insurance matters, including plan design and the premium share (Section 19 is now a local-option statute that has not worked – communities in Section 19 are pursuing home rule petitions to get out.);
• Limit the guaranteed savings for taxpayers at only 25 percent of the costs avoided by any plan change, set aside 25 percent for enhancing employee benefits, and require bargaining over the remaining 50 percent – the entire purpose of reform is to preserve municipal and school services and to protect jobs, and this provision would totally undermine reform by funneling as much as half or more of the savings into other employee benefit costs;
• Impose mandatory binding arbitration over health insurance matters – mandatory binding arbitration was REPEALED BY THE VOTERS as a key part of Proposition 2½ because it is unaffordable for taxpayers (an example is the arbitrator’s decision in the Boston Fire Department case last year, granting extremely high salary increases in exchange for what should be routine drug testing). This amendment would expand mandatory binding arbitration in unprecedented ways (historically, it only existed for police and fire contracts), and would give an unaccountable, unelected outside person the power to set all co-pays, deductibles, contribution percentages, health reimbursement accounts, and other benefits, essentially empowering the arbitrator to control up to 15 percent or more of a municipality’s budget;
• Lead to legal disputes and conflict because the amendment uses an ambiguous benchmark of “actuarial value” to determine the maximum municipal action for increasing co-pays and deductibles – because it is ambiguous and undefined, there would be countless legal challenges and delays before the actuarial value could be determined. By contrast, Section 46 in the House Ways and Means plan is clear and transparent, allowing communities to adjust co-pays and deductibles to specific levels in the GIC, preventing costly legal delays.
Just this week, the Commonwealth won a Superior Court ruling upholding the Legislature’s action in the 2009 Transportation Reform Law removing all health insurance matters from collective bargaining for state transportation workers. Section 46 is a powerful reform plan for cities and towns, yet it is much more modest than what the House voted for in 2009 in the transportation bill.
THE CHOICE IS CLEAR. The legislation proposed by Speaker DeLeo and the House Ways and Means Committee saves taxpayers $100 million in avoided health insurance costs, protects municipal union jobs and essential services, guarantees equity with state employee health benefits, and still leaves municipal unions with more bargaining power than state unions. This is a balanced, meaningful, fair and transparent reform. Please vote to support the House Ways and Means initiative and reject Amendment 749. Thank you very much.
Sincerely,
Geoffrey C. Beckwith
Executive Director, MMA