Last Friday, Gov. Deval Patrick rolled out a municipal healthcare proposal to the Massachusetts Municipal Association (MMA) that is drawing considerable optimism from local leaders. The legislation, which the Governor plans to file right away, could generate approximately $120 million in savings across cities and towns. Most observers in the region are expressing support, though many are urging rapid legislative action to make the proposal effective.
At the heart of the administration’s plan is a requirement that all municipalities either participate in the state’s Group Insurance Commission (GIC) or adopt a healthcare program of comparable value and expense by July 1, 2011—the start of fiscal year 2012. Expedited union-management negotiations would be the vehicle for implementing these transitions. Should municipal leaders and unions fail to reach quick agreement, the proposed legislation would permit municipalities to proceed independently, removing health insurance from collective bargaining protections. Communities including Revere, Chelsea and Everett stand to gain substantially through such restructuring, though returning portions of savings to unionized workers may be part of the arrangement. City administrators have flagged healthcare costs as a significant collective bargaining obstacle, while union representatives remain concerned about surrendering this substantial negotiating leverage.
Chelsea City Manager Jay Ash expressed enthusiasm for the initiative but stressed the importance of swift approval. “We can offer our dedicated employees great health insurance plans at more affordable costs,” he said. “That would seem to be a no-brainer in today’s day and age and, frankly, in any era. I’m thrilled that Gov. Patrick continues to respond to this pressing need, and appreciative that legislative leaders seemingly feel the same way. Until something happens, though, I remain anxious for the relief that will make it a bit easier for us to focus tax dollars on important core services the public needs and expects.”
Gov. Patrick himself stated: “I am confident better days lie ahead so long as we all work together. With the initiatives announced today, our cities and towns, and their public employee unions, can contain health care costs, continue to assure quality affordable care for workers, and maintain public services.”
Revere Mayor Tom Ambrosino endorsed the proposal, noting that municipalities would gain the capacity to restructure their plans consistent with the state’s GIC offerings. “Under his proposal, cities like Revere will be able to revise their health insurance plans to be in line with plans offered by the state’s Group Insurance Commission,” he said. “Those state plans, which offer first class medical coverage to the state’s own employees, are significantly less expensive than plans currently in place for most municipalities. Under the Governor’s initiative, unions will have a role in this process, but they will not have a veto over the necessary plan changes.”
Everett Mayor Carlo DeMaria welcomed the flexibility afforded by the proposal. According to DeMaria, preliminary analysis suggests the city could potentially realize $1 million in savings with minimal employee impact if they design their own plan. “What we are truly looking for is the ability to design a healthcare plan that benefits both the city and our employees,” he said. “We haven’t determined whether that’s through the GIC or an independently designed plan. Our initial research shows that we can potentially save $1 million with very minimal impact to the employee, if we had the ability to make changes. At the end of the day, we need serious reform. Healthcare costs are an overwhelming percentage of our budget and as a municipal leader, I need tools that help me control costs without sacrificing important services.”
Ambrosino concluded by reiterating the collective position of the three leaders: legislative action must be prompt for budgetary relief to materialize. “This is a critical tool for municipalities as we struggle to absorb even further reductions in local aid,” Ambrosino stated. “Municipalities are desperate for immediate fiscal relief. The Governor’s plan provides it. I urge the Legislature to make this among its highest priorities and quickly approve it so savings can be achieved in Fiscal Year 2012.” The Governor’s proposal also encompasses moving retired municipal employees into the Medicare system, though numerous communities in the area have already implemented this measure.