From press release:
PATRICK-MURRAY ADMINISTRATION MUNICIPAL HEALTH INSURANCE REFORM PLAN ALREADY SAVING MILLIONS FOR CITIES AND TOWNS
Administration urges other communities to join in the savings
…
From 2001 to 2005, health insurance costs for municipalities grew nearly twice as fast as for state government. Since the Governor signed pieces of the MPA into law in July 2007, 17 municipalities, six school districts and three planning councils/commissions/development districts have joined the state Group Insurance Commission (GIC).Among the savings realized by communities are:
* $10 million in the City of Quincy ;
* $2.6 million in the Town of Watertown ;
* $2.6 million in the City of Pittsfield ; and
* $1. 5 million in the Town of Norwood
…“Joining the GIC allowed Melrose to not only avoid layoffs, but also expand programs,” said Melrose Mayor Robert J. Dolan. “The City was able to put $600,000 into the schools that they wouldn't have been able to do without GIC. The GIC proved to be a win for management and employees. The savings from GIC participation has not only been beneficial in these difficult fiscal times, but also created a structural change in our budget that will be beneficial for years to come.”
Good news, although 17 towns is not exactly burning the house down as far as uptake. But as is made clear … this saves municipal jobs. A lot of the muni unions can continue to push for every last benefit, but they may well end up in a look-to-your-left, look-to-your-right situation.
Come on in the risk pool, the water's … well, better.
Discuss
18 Comments . Comments are closed.Honest question...
what was the difference in out of pocket health care expenditures for the employees during that period?
I get that Quincy paid $10M less for health care for their employees during that period. Did their employees collectively pay more out of pocket during that period?
In other words, are we "saving" money by simply compensating employees less, or are we really saving money because of efficiency? Is it some of both?
I had exactly the same questions
Maybe someone from one of the bigger unions, say AFSME, SEIU or MTA, has run these numbers and will share them here. Perhaps a BMG editor could put in such a request. The numbers likely differ for each contract so having the facts is vital to a reality-based discussion. Saying things that are cute but might not be true isn't helpful at all (e.g. "Come on in the risk pool, the water's ... well, better.").
Here's another honest question ...
Is the insurance via the GIC fair, something that you would normally see packaged for deductibles and co-pays? Or is it completely out of whack from what in standardly out there for employers in your opinion.
I'm not answering your question, I have no idea.
But I wanted to pose this question to you, to get your thoughts.
employees not employers
It's the health plan options that state workers get...
...there has got to be a few state workers here at BMG that could comment on what their plans are. I'd assume that all the plans--the ones for local communities and the state--are similar, but will vary in the fringes...and if local community employees are balking because fringe difference...then that will mean layoffs.
As to GIC - it is good value. Here are a few facts:
The Health Care Specialist for an organization I belong to did a comparative study on GIC. Here are a few points to consider:
1. With Blue Cross/Blue Shield the same coverage gets more and more expensive when you get older - with GIC the cost of a plan stays level as you age.
2. A Plan that would cost our family $1800 from BC/BS would cost us [same family] $1100 from GIC with lower deductibles and lower co-pays.
So Kudos to Delores Mitchell, the longtime executive director of the GIC.
All due respect
but the GIC is more expensive than BCBS for the Medicare/Retirement plans. Not only that but BCBS offers a plan that is directly competitive with GIC for HMO and PPO plans. The issue isn't joining the GIC or not...it is giving municipalities plan design capability.
And more:
since health insurance is part of employee compensation, it's about whether employees have a right to bargain health insurance...wages, hours, and BENEFITS.
it's hard to follow the numbers
2. So then the battle is simply the usual -- who "gets" the savings? Does the town get it, or do employees?
a. In Watertown, some of the $2.6 million was to give out 4.5% pay raises. Some of it was to protect jobs that would have been lost. But then they also changed the town-employee split in premium costs, with employees picking up a bit more.
b. However, in Swampscott, it was a little different.
The offer was that employees would save $300k and the town would save $800k. The union wanted more of the savings, in the form of the employees picking up LESS of the annual % contribution.
But then later they worked it out and joined the GIC. I think.
3. Usually the elected officials throw up their hands and think "Geez, unions, we're gonna ultimately be spending the money on you ANYWAY, so play ball."
But from the union point of view, a) "If you're going to give us the money anyway, then give it to us in the way we want, and b) if we let you keep some savings, you won't push to raise property taxes with overrides, which is what we want."
I hear you...
but the problem is that there isn't a direct translation between "old insurance" and GIC. Coverage may be different in some instances. Co-pays, deductibles, and other shared billing certainly isn't identical.
That's the minutia that leaves me unconvinced.
Getting it done...?
Issuing a press release touting 17 communities out of 300 plus cities and town in the state joining GIC over a 3 year (or so period) represents the kind of cynicism that Deval Patrick promised to change in Massachusetts.
But here they are, citing a few drops of water the fell in an arid desert. Among other things, the bar of requiring a 70% affirmative vote by unions to adopt a GIC health plan is way, way to high. By approving the 70 percent bar (can someone tell me if it was proposed this way by Patrick, or did he just fold to the change when it was presented to him) this positive move to save communities millions was rendered symbolic at best.
Patrick is now almost into 3/4 of his term...it's time to stop encouraging him like he's a political toddler (oooh...your getting it done...you are so cute) and give him the kick in the butt tough love he needs to straighten out the state and get himself reelected.
Did I say $quot;he's$quot; ....?
I said the MPA/GIC are working, when they're taken up. The MPA was, of course, the governor's legislation.
Now, I said in 2007 that the governor actually lagged behind legislative leaders on the 70% union vote requirement, and told us that "that was the deal" arrived at with the unions and was determined to stick to it. I also know that getting better than the 70% would have been a very, very tough sell in the Senate.
Anyway, we're mostly in agreement -- on the substance if not the tone.
The reason it's working
where it is is because it was a joint decision of the community and its employees. The municipal insurance situation is as varied as the 351 cities and towns in the Commonwealth. Over a period of many years, collective bargaining has resulted in a great variety of plan designs, co-payments, premium splits, and provider companies. Each worked for the community. Some communities agreed to lower pay in return for higher benefits. You'll find lots of those in the older, rusting cities. Pay stinks but benefits are great. Why? Because the bargaining went that way. If you suddenly come to them and force your "good government" solution down their throats you'll have extremely unhappy employees, who gave up decent pay for benefits, and now have lousy pay and lessened benefits. And, believe me, GIC plan designs, copays, and everything else are lesser plans than many out there...but that was a conscious decision. It was agreed to through bargaining; introducing a deus ex machina big brother "progressive" solution is a guaranteed way to alienate those employees and convince them that progressives are anti-unionists who are perfectly willing to inflict their "solutions" on an unwilling populace.
Quincy was one of those communities that bargained benefits for pay in the compensation-benefit equation. In order to give up the insurance, the City had to share the savings of the change, and the employees had to understand what they were getting, and agree to the change. The 70% requirement is not a problem if the agreement is fair. Heck, we have a 2/3 approval requirement in our union bylaws to approve a contract. And it was the attempt to force employees to accept a cost-shifting take-back, without bargaining, without give and take, that caused a strike in Quincy; and it was a willingness to bargain over that cost-shifting, and reach an agreement that resulted in a move to the GIC a year later.
There seem to be a great many progressives out there who hear that Fall River employees have a 95-5% split and scream bloody murder without asking "what did they give up along the way to maintain that insurance situation?" Bargaining is give and take. You want to take their insurance deal now, and give them....what?
And at the core of this situation is the idea that employees are somehow "less" in the management-employee relationship. This is the anti-union belief at its core.
Smartest comment in this thread
Of course the GIC saved money for the people who joined it -- the reason they voted to join it is to save money.
Unfortunately, Patrick is not pushing a plan to help municipalities and unions (remember when Democrats supported unions?) save money by finding the right plan, he is pushing a plan to stampede them into the plan whether they want it or not.
This site is going to be amazing if a Republican governor ever gets ahold of the executive powers Deval is trying to accrue to his office.
Charley...you're a good man...
...I'm just feed up with Patrick...as you may remember, I was very skeptical of him in the primary, but made my phones calls for him in the general and was beginning to actually believe his line of BS, despite my better judgement (how do you argue against a juggernaut?). But he's disappointed me almost immediately (it wasn't the Caddy and drapes...it first was his comment that he would trade a legislative pay raise-for the leadership--for some of his programs. He's a GD phony!)
Michael Flaherty Agrees
According to a 2006 report by the Boston Municipal Research Bureau, the city's health care costs increased 92% between FY2001 and FY2007, despite the fact that the city had trimmed down the number of city employees on its payroll. Recognizing that the city and its taxpayers cannot continue to pay such excessive costs, Michael believes that the city of Boston must join the Group Insurance Commission (GIC) as a way to save the city significant savings while maintaining quality health care insurance for its employees at the same time. Check out our website - Saving Money for Boston for other cost saving ideas for our city.
Natasha Perez Michael Flaherty for Mayor
Nice try but
how much of the increase was do to enrollment as the private sector dropped plans and people chose to join the city's plan that did not before We have seen alot of this around the state.
Boston is almost 10% of MA's population
closer to 8%, but anyway...
what percent of employees who could be in the GIC work for Boston? If Boston joined the GIC tomorrow, what percent of GIC enrollees would be from Boston (a different question)?
Is Boston an 800 lb gorilla? Would Boston shift the risk poll in a substantial way? For better or worse?
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