Municipal health insurance reform yields $247M in savings

More than 250 cities, towns and school districts in Massachusetts have used or leveraged the 2011 municipal health insurance reform law to realize $247 million in premium savings for local government employers and employees, according to a report released today by the Executive Office for Administration and Finance.
 
The reform law allows municipal officials to engage in an expedited process of negotiation to implement plan design changes locally or to join the state’s Group Insurance Commission. Since the reform was signed into law in July 2011, 235 cities, towns and school districts have used or leveraged the law to implement cost-saving plan design changes. The remaining few, 22, joined the GIC.
 
According to the 11-page report, 91 municipalities and school districts adopted and used the process outlined in the municipal health insurance reform. Those communities were required to share up to one-quarter of the first year’s savings with employees in the form of mitigation, in addition to reduced premium costs realized by employees. An additional 166 were able to make changes through traditional collective bargaining since the passage of the reform.
 
“It is clear that the 2011 reform law has delivered powerful savings for communities, taxpayers, employees, and retirees,” said MMA Executive Director Geoff Beckwith. “The MMA and local officials in every corner of the state championed this reform for seven years because we knew it would be a major success.

"As we near the three-year anniversary of the bill’s passage," Beckwith continued, "we again applaud all those in the Legislature and administration who made this victory possible. House Speaker Robert DeLeo and House Ways and Means Chair Brian Dempsey deserve special praise because they blazed the trail. And, of course, we are very grateful to Gov. Deval Patrick for signing the final bill into law. Important civic organizations, including the Massachusetts Taxpayers Foundation, The Boston Foundation, and many others were instrumental every step of the way.”

• Download municipal health insurance reform report (135K PDF)