The piece, authored by Samuel Tyler of the Boston Municipal Research Beureau, argues that the present system of funding municipal health insurance is unsustainable because of the upward pressure it places on local real estate taxes.
By way of example, he cites the city of Boston, which has seen expeses for health insurance increase 92 percent over the past six years.
During the same period, Mr. Tyler states that the Commonwealth of Massachusetts has seen its insurance costs escalate “only” 61 percent. He cites the Commonwealth’s participation in the Group Insurance Commission (GIC) as the primary reason that the state saw a less dramatic increase in the cost of health insurance. The idea being that the GIC grants the commonwealth greater flexibility in managing plan design and associated costs outside of contract negotiations, allowing for cost savings.
Mr. Tyler supports the passage of a bill that would allow for municipalities to join the GIC, the details of which are found in his article.
Now, I didn’t go to school for municipal finance, and I’m not a health care expert or a municipal employee. Is there anyone on these boards that could educate me as to why this would be a bad idea? It seems pretty reasonable to me.
Is Mr. Tyler comparnig apples and oranges when comparing Boston’s health costs to the Commonwealth? Or is it fair to say that the GIC would really save a given municipality 33% of its costs in health care?
Is this an option worth exploring?
<
p>
Nothing bad that I’m aware of. But, many locally negotiated plans have been collectively bargained, and have terms that are better than the GIC plans. GIC members pay the same premiums and receive the same benefits.
<
p>
To entice membership into the GIC, the new legislation created the PEC (Public Employee Committee) that purpose to negotiate decent coverage on behalf of the Locals.
<
p>
The major roadblock to immediate savings is that the local unions and/or employees, don’t want to give up what they already have, in exchange for the lesser GIC coverage.
It seems odd to me that being part of the GIC implies that there’s a single plan and level of benefits that everyone gets. I’d have expected that there’s a set of features and those features have price tags attached (copays, deductibles, coverages, in vs. out of network doctors, etc.). In that case, there’s no problem with a municipality negotiating more generous coverage – they select different features and pay more (but still get the collective negotiation benefits).
<
p>
If the GIC has a uniform, less generous plan, that changes the game. I thought the reason that the GIC plan was cheaper was because of the state’s larger negotiating leverage. But now there’s another possibility. If the GIC plan didn’t increase in cost as much because it dropped more expensive features (lower copays or whatever) and municipal employee plans didn’t, then that undercuts the potential benefits of opening up the GIC.
<
p>
And if the real driver of the GIC cost savings is less generous benefits, then proposals to open up the GIC are less about capturing efficiencies and more about cutting municipal employee benefits through the back door. And I don’t see a good reason to be in favor of that (if localities want to cut employee benefits, why don’t they do that through the standard negotiation process?).
<
p>
It’s a great plan–I’ve been part of it for thirty odd years. We are getting to the point where we cannot afford the luxury of having communities negotiate unrealitic contract negotiations with local employees and schools then cry about it at a later date. Forcing local communities to put up or shut has reached its time. The federal government has been using this tactic for years.
<
p>
The best idea that the governor has come up with so far is this benefit consolidation. If the employee has to pay more so be it. If not, resign and go find another job.
I didn’t mean to say there’s a single, one size fits all, GIC plan. There are several plans within GIC, depending on your choice of provider, location, circumstances, etc.
<
p>
But, when you join GIC, the GIC plans are the only choices you have–and there are several to choose from.
<
p>
However, some towns are finding out that the collectively bargained plans are more generous than any of the GIC selections.
I went to a presentation by our school superintendent, who must get member towns in a regional school district to approve overrides at varying levels, because the Commonwealth has decided that some pigs are more equal than others via the EQV factor, even in adjacent towns with similar economies. One town will need to approve triple what its neighbor will asked to approve. Needless to say, this is a tough sell.
<
p>
Naturally, the GIC issue came up. Would it be cheaper? The answer was that the Cape Compact, which buys BC/BS collectively for the 15 municipalites, districts and the county is cheaper than any of the GIC plans. So – while it will benefit some towns that have been going it alone, it’s not a universal panecea.
Thanks!