Health insurance plan design gains momentum

The governor and legislative leaders are all expressing a greater sense of urgency to address soaring municipal health insurance costs in a way that would provide for savings in local budgets in the next fiscal year.

At a meeting with the state’s mayors on Feb. 16 in Salem, Gov. Deval Patrick said, “I think we have a really good chance of getting a really good bill for you in time for you to realize significant savings in fiscal 2012. … My hope is that the Legislature will take this up and get it to my desk before the end of [March].”

In his inaugural address in January, House Speaker Robert DeLeo said dealing with municipal health insurance costs was one of his top priorities for early attention by the Legislature.

The MMA has re-filed its municipal health insurance bill, which would give cities and towns the authority to modify plan design – such as increasing co-pays and deductibles and creating tiered networks – while keeping benefits at a level that matches the state’s Group Insurance Commission, at a minimum, without being required to go through collective bargaining.

The MMA also supports requiring municipalities to enroll eligible retirees in Medicare, a position endorsed by members at the association’s Annual Business Meeting on Jan. 22.

The MMA is using the following five criteria for evaluating legislative proposals regarding municipal health insurance:

• Is the proposal easy to understand and implement at the local level?

• Could the proposal be implemented quickly, by the time fiscal 2012 begins on July 1?

• Would the proposal continue to give municipal unions “veto” power over any changes to municipal health plans? (When asked recently about the veto, Gov. Patrick responded, “I am done with that.”)

• Would the proposal either maintain or enhance the unique health insurance bargaining power of municipal unions? In each of the past two years, the Senate has put forward plan design initiatives that would settle collective bargaining disputes by resorting to binding arbitration. The MMA has not and cannot support any legislation that would allow an unelected, unaccountable, third party to make decisions regarding municipal health insurance, which accounts for about 12 percent of local budgets.

• Would the proposal require municipalities to share any “savings” that result? Fiscal 2012 will be the fourth straight year of local aid cuts, which will inevitably lead to service reductions and the loss of municipal jobs. The point of plan design reform is to reduce costs in order to protect services and save jobs, so it would be counterproductive to require municipalities to share the savings with employees. Additionally, any efforts to control health insurance costs would be reflected in the employees’ portion of health insurance premiums.

It’s worth noting, as well, that the municipal health insurance proposals being discussed would merely slow the rate of growth of health insurance costs – not actually reduce costs.

The MMA is lobbying the Legislature for quick action on plan design reform so that communities will have time to implement the changes in fiscal 2012.