‘Plan design’ remains hot topic

The Legislature appears to be moving closer to addressing the issue of soaring and unsustainable municipal health insurance costs, with the Joint Committee on Public Service holding a hearing on a number of bills and the House speaker, Robert DeLeo, making his strongest public statement yet on the issue.

“We absolutely must find a way to ease the financial pressures at the local level,” DeLeo told the Greater Boston Chamber of Commerce on March 15. “If we want to do what’s right for our children who attend public schools; if we want to provide public safety protection at adequate levels; if we want our streets plowed and our trash collected, [then] it’s high time we give cities and towns the tools – through legislation – to make more than a dent in the cost of municipal health insurance.”

Later in the day, while appearing on WBZ radio, DeLeo was asked if communities should be required to share any resulting “savings” – which would actually be a reduction in the rate of increase – with their employees.

“Those funds should go to save [municipal] jobs,” he said. “I want to save jobs, I want to save services, for the cities and towns.”

Time is of the essence, however, if cities and towns are to be able to realize any meaningful savings during fiscal 2012, when they face the fourth straight year of local aid cuts.

At the Public Service Committee hearing on March 8, legislators were urged to take immediate action to reduce the burden of excessive health care costs in order to save municipal services and jobs.

“Cities and towns are locked into overly expensive health plans because they cannot gain the required union approval to implement cost savings,” said MMA Executive Director Geoff Beckwith, “while the state has exempted itself from this mandate and routinely implements basic decisions on health insurance outside of collective bargaining. The state must end this double standard.”

More than 40 local officials echoed this message, including MMA President and Natick Selectman Josh Ostroff, Massachusetts Mayors’ Association President and New Bedford Mayor Scott Lang, Worcester City Manager Michael O’Brien, Massachusetts Selectmen’s Association President and Sherborn Selectman Paul DeRensis, Gardner Mayor Mark Hawke, and Reading Town Manager Peter Hechenbleikner.

Mark Waldman from the West Suburban Health Group and John Lillis from the Group Insurance Department in the Hampshire Council of Governments also testified.

The MMA’s municipal health insurance bill 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. In other words, communities are seeking the same authority that the state has to make such changes for its employees.

The Public Service Committee, chaired by Sen. Katherine Clark of Melrose and Rep. John Scibak of South Hadley, was considering 26 municipal health insurance bills. Chief among them were bills filed by the MMA, the governor, and Boston Mayor Thomas Menino, as well as a number of home rule petitions.

The hearing, which lasted nearly eight hours, was well attended by local officials as well as union representatives. Many local officials submitted written testimony expressing their support for the urgent passage of reform.

On the day before the hearing, a coalition of labor groups rallied in the State House and offered a plan that would require binding arbitration if a compromise on plan design is not reached locally within 45 days, 50-50 sharing of any “savings” realized from premium changes, and more seats on the GIC.

Plan design was also a hot topic during the MMA’s nine Legislative Breakfast Meetings, held during February and March, when local officials across the state urged lawmakers to support legislation to reform municipal health insurance, a top priority for cities and towns.

At a meeting in Peabody on March 11, the city’s mayor, Michael Bonfanti, told Sen. Clark that municipal health insurance reform is urgent because local aid reductions continue to force cities and towns across the state to lay off employees, cut services, and increase their reliance on the property tax.

The MMA is continuing to work closely with the Joint Committee on Public Service and the House and Senate Ways and Means committees to make sure that any bill ensures the maximum reduction in municipal health insurance costs.