Briefing: Municipal Health Plan Design
Just like all employers, cities and towns in Massachusetts face intense pressure from the rising cost of health insurance. A provision included in the Senate’s draft of the 2011 state budget would let municipalities change aspects of the health plans they offer their employees without going through the normal process of bargaining with the workers’ unions. Some employees and unions say the change would mean balancing budgets on the backs of teachers, firefighters and office clerks. Meanwhile, groups including the Massachusetts Taxpayers Foundation say the proposal doesn’t go nearly far enough.
How significant a problem are health costs?
According to the Massachusetts Taxpayer Foundation, municipalities’ health insurance costs have grown from 6 percent of their budgets in 2001 to 14 percent today and are projected to hit 20 percent by 2020.
How do communities handle health plans now?
Currently, most municipalities can make changes to their employee health plans, including increasing co-pays and deductibles or shifting entire plans to the generally cheaper state Group Insurance Commission, only by bargaining with their employees.
What would the Senate proposal do?
The language in the Senate budget would let city and town officials make changes unilaterally, but it would also make some demands on how the savings is used. One quarter of money saved would have to go to the municipality, one quarter would go to the people covered by the plans to help pay for extra expenses like added co-pays, and the remaining 50 percent would be subject to negotiation between the two sides.
Why are some employer groups unhappy with the Senate proposal?
The MTF, along with the Massachusetts Municipal Association and other employer groups, argues that it doesn’t guarantee enough savings for cities and towns, and that the arbitration process could be too cumbersome.
What happens next?
Since the House budget draft doesn’t address the issue, the conference committee now working to resolve differences between the two versions must look at the issue and decide what, if any, language on the subject to include.
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