Municipal, school leaders call for passage of House’s municipal health insurance reform plan

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For more information, contact Geoff Beckwith or Pat Mikes at the MMA (617-426-7272); Glenn Koocher at MASC (617-523-8454); Tom Scott at MASS (781-541-5098)

A broad coalition of statewide municipal, school and community leaders today called on the Legislature to pass the municipal health insurance reform proposal offered by House Speaker Robert DeLeo and House Ways and Means Chair Brian Dempsey, which is included in the state budget that will be debated by the House of Representatives beginning on April 25.

“We commend Speaker DeLeo and his leadership team for recognizing the need for reform and for proposing a plan that offers powerful relief for local taxpayers and all communities,” the coalition leaders said. “We need this reform to protect critical funding for public schools, police and fire protection, road repairs, libraries, and essential services throughout Massachusetts.”

The leaders of 10 statewide education and local government organizations gathered at a press conference at the Rumney Marsh Academy, a public middle school in Revere, to embrace the speaker’s municipal health insurance reform plan.

The organizations calling for passage of the reform measure are: the Massachusetts Municipal Association, the Massachusetts Association of School Committees, the Massachusetts Association of School Superintendents, the Massachusetts Business Alliance for Education, the Massachusetts Mayors’ Association, the Massachusetts Selectmen’s Association, the Massachusetts Municipal Councillors’ Association, the Massachusetts Municipal Management Association, the Association of Town Finance Committees, and the Suburban Coalition.

The reform plan proposed by the speaker and the House Ways and Means Committee offers real reform for cities, towns and taxpayers, according to the groups. The measure would give cities and towns the same power the state has to implement necessary changes in municipal health insurance plans, saving local taxpayers up to $100 million in avoided costs statewide.

A December 2010 study by the Massachusetts Business Alliance for Education and The Boston Foundation revealed that all of the $700 million in new Chapter 70 school aid from 2000 to 2007 was consumed by rising health insurance costs, concluding that “controlling the overall cost of health care in Massachusetts is now the ultimate education issue.”

A report released this month by the Massachusetts Taxpayers Foundation and The Boston Foundation concluded that municipal health plans cost taxpayers millions more than state, federal or private insurance plans because municipal unions can veto any change in the plans. The report said that the Legislature must give local officials the authority to adjust insurance plans outside of collective bargaining, and without this action “communities will be forced to make even more painful and severe cuts to education and other basic services.”

“Communities are in fiscal crisis, and Speaker DeLeo’s municipal health insurance reform plan offers the best chance for meaningful relief that taxpayers deserve, so that we can use their tax dollars to pay for vital school and municipal services, not unaffordable health plans,” said Massachusetts Municipal Association President and Natick Selectman Joshua Ostroff. “The Speaker’s proposal is really a bill to fund education, public safety and core services for taxpayers.”

“Skyrocketing health insurance costs are forcing cuts in essential municipal and school services and forcing the elimination of teachers, firefighters, police officers and other key employees from local budgets,” said New Bedford Mayor Scott Lang, president of the Massachusetts Mayors’ Association. “We will use this reform to provide relief for local taxpayers, protect essential services, and preserve thousands of municipal jobs.”

“Educating our students and providing them with the skills they need to succeed in a global economy is our top priority,” said Lynnfield School Committee member Dorothy Presser, who serves as president of the Massachusetts Association of School Committees and as president of the Suburban Coalition. “To do this we need resources in the classroom, most importantly teachers. Rapidly increasing health care costs are eroding our ability to provide essential resources. This legislation will preserve services not only for our students but for all our citizens. At the same time, it saves jobs, preserves more collective bargaining rights than state employees now enjoy and makes sure that municipal health care options meets the high quality and ethical standards provided to state employees.”

Revere Superintendent Paul Dakin, vice president of the Massachusetts Association of School Superintendents, said, “School districts have been struggling to meet the needs of the students we serve in this 21st-century, skill-needed society. As we do all we can with our budgets to balance the needs we face, one area stands out: increases in health insurance premiums have virtually eroded the increases we have seen in Chapter 70 funding, causing an inability to provide the services we need to educate the young people we serve. Thus, MASS supports efforts to allow cities, towns, and school districts greater health insurance design authority consistent with the authority the Commonwealth has with state employees.”

Massachusetts Business Alliance board member Joseph Esposito said, “MBAE’s report on school funding found that an increasing percentage of education funds are being spent on school employee health costs, and as a result, spending on books, teacher training and other materials is actually decreasing. If we don’t get these health costs under control, education cuts and layoffs will intensify over the next several years.”

Under the plan proposed by House leaders, cities and towns would be able to change the co-pays and deductibles in employee health plans outside of collective bargaining, up to the same level that state employees have in plans offered by the state’s Group Insurance Commission. Communities would also have the power to join the GIC outside of collective bargaining 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. Cities and towns would still negotiate any change in the employee-employer premium share and 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 have.

“Now is the time for clear action and real reform, and we are pleased to stand with the speaker to support his bill,” said Revere Mayor Thomas Ambrosino, who hosted the event. “This vital measure saves taxpayers money, preserves essential local services, 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, fair and transparent reform that must pass.”