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House passes GIC bill and gives Deval a win.

June 22, 2007 By capital-d

Today the House overwhelmingly approved the so called GIC bill, a part of the Gov?s Municipal Partnership by a near unanimous vote.

The bill originally filed by Watertown Rep. Rachel Kaprielian, would allow municipalities to enroll workers in the state health insurance system (GIC) which would realize millions of dollars in saving for cities and towns.

The savings are estimated to be up to $180 million per year for municipalities, which can help them reduce property taxes without actually raising other forms of taxes. 

Next week the House is said to be moving Municipal Pension Reform bill (another part of the Gov?s package) which would allow communities to save many more millions of dollars by opting into the state pension system.

Looks like Sal and the gang are moving the Gov?s initiatives albeit slowly and one at a time. Lets see what the Senate does.

I do have a question, will cities & towns really reduce property tax with this money?

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Filed Under: User Tagged With: deval, dimasi, gic, house, municipal-partnership, sal

Comments

  1. sco says

    June 22, 2007 at 9:18 am

    Seems unlikely.  But, the money will certainly slow the growth of property taxes and likely we won’t see as many overrides in towns that adopt these reforms.

    <

    p>
    If you want your town to reduce property taxes, you’ll have to get involved with your town government.  They’re not going to do it on their own.

  2. mr-lynne says

    June 22, 2007 at 9:34 am

    … have eaten into thier rainy day funds.  Obviously each municipality’s needs will vary but I’ll bet many will use this opportunity to replenish these funds.

  3. stomv says

    June 22, 2007 at 10:10 am

    by which towns move their employees into the GIC?  What about for current employees, who have a contract that provides higher-valued benefits?  Even if the town waits until the contract is up, by switching the health care coverage in the new contract, if the town will be lowering the total value of the employee’s salary and benefits package, won’t the employees demand a higher salary so that the total value of their new package [at the very least] keeps up with inflation?

    <

    p>
    I’m not being snippy… I think the plan is a good one, since it seems like it will help lower total costs.  I’m just not sure how the transition will take place, and at what consequence.

    • raj says

      June 22, 2007 at 10:34 am

      …if it’s during the town’s contract period, the town would allow each employee to opt whether to stay with the current town’s plan or to select a GIC plan.

      <

      p>
      Quite frankly, I find it difficult to see how a plan could be better than GIC.  My spouse is under the GIC plan, and, except for a modest co-pay, they have covered everything (except accupuncture).  They even covered his medical bills for his hospitalization in a Munich hospital for a week in 2000, without a question.

      • stomv says

        June 22, 2007 at 11:11 am

        I suspect that the copays for some towns will be less than the GIC.  I’m sure there are other differences.

        <

        p>
        Allowing opt- makes it easy, and requiring that all new employees go on GIC would seem to be as unconfrontational as possible, but of course would result in deferring some/all of the savings.

        • raj says

          June 22, 2007 at 11:44 am

          …for my spouse’s GIC plan aren’t particularly burdensome, something like US$10 per visit. 

          <

          p>
          And the GIC paid all of his Munich bills without requiring previous approval for the hospital admission.  He had been hospitalized for the week for a deep vein thrombosis in the leg, which, I’m told, some hospitals in the US treat on an outpatient basis(!).  Several years ago, on a conservative message board, one poster who was diagnosed with a DVT was merely given a set of Heparin injections (Heparin is a blood thinner, and is the initial treatment prior to Coumadin or Warfarin), and sent home–he was expected to inject himself in his abdomen.

          <

          p>
          Regarding requiring that all new employees go on GIC, I’m not sure that a town could do that unilaterally–it would depend on their union contract.

          • jconway says

            June 22, 2007 at 12:00 pm

            It’ll just free up more funds to pay for really useful projects such as million dollar art installations in Porter Square, continuing to fund the Peace and Nuclear Disarmament Commissions, and giving more $$ for Reeves and the Councilors to travel and binge on our dime.

            • johnt001 says

              June 22, 2007 at 7:55 pm

              Sounds like you need to get involved in your town meeting – if you don’t like something they’re doing, make your voice heard.

              <

              p>
              I took a look at my town meeting this past spring when the annual election was going on – there were 11 seats being voted on in my precinct, and only 9 people running!  So I took out papers and now I vote at town meetings too.  In Milford, only elected town meeting reps can vote, buy anyone can speak – how does Cambridge run their meetings?

              <

              p>
              Our situation is good – we have a great credit rating and a sizeable rainy day fund.  I’ll be interested to see how much the town could save under these two bills.

          • stomv says

            June 22, 2007 at 8:37 pm

            the question is: is the total [financial] benefit of the GIC more, less, or the same as the current contract.  Of course, this varies depending on the person, their health history, their meds requirements, the frequency with which they visit the doctor, etc.

            <

            p>
            If the union comes out with numbers that show that the GIC results in a 0.3% loss of total benefits for its members, methinks the town had either (a) demonstrate that the conclusions of the study are wrong, or (b) find some extra salary to throw in to help make up for the financial loss the employees are taking by agreeing to move to the GIC.

            <

            p>
            If its (b), then it seems unlikely that the town will come out with much financial benefit in the short run; they’ll be paying the insurance company less and their employees more directly.  S’OK; it’s still a good idea in the long run.  I’m just not sure how much it will benefit the bottom line in the short run, that’s all.

  4. amberpaw says

    June 22, 2007 at 8:07 pm

    The problem is that base line costs [such as health insurance for employees] has been increasing at a rate greater then the 2 1/2 % increases now allowed.

    <

    p>
    So with any GIC savings, a city, town, or village might have to decide between bringing back school nurses and school libraries [the town where I live has lost both] or a minute reduction in property taxes.

    <

    p>
    The “problem” is that what is called “local aid” is actually a partial return of taxes paid [return of capital] – not charity.  And because of the reduction in the flat tax income tax, and the end of the mega-boom that led to lawmakers thinking a tax cut was fine…each year local services have degraded, at least since 2003.  And at least in my opinion.

  5. progressiveman says

    June 25, 2007 at 10:18 am

    the GIC actions will mostly benefit larger cities that have high insurance premium splits…for instance Somerville that pays 90% of heath insurance premiums, while emplyees pay 10%. For some employees the state pays 85%, for others 75% (I think it is). Many cities and towns have lower arrangements…for some 70/30…others even 50/50. If they were forced to adopt the GIC split at the same time they were looking at changing to the GIC plans there would be no savings.

    <

    p>
    The GIC gets good rates because of the volume of their purchasing, they cover alot of lives. But we need to be realistic. They are not lowering the cost of delivering health care in the Commonwealth, just lowering the cost of health insurance for the state purchasers. Actually, the GIC probably winds up driving up health insurance costs for other purchasers because Harvard and Tufts have to get their money somewhere.

    <

    p>
    There is a roadshow by Rep. Kaprelian and others to explain the program so cities and towns can see if it will help. This is not a quick fix as it needs to be negotiated with the unions, but their members have been hit hard by the steep increases in premiums and copays that have gone on in most places and many unons may be interested in the long term stability the GIC offers. As with much of the MPA, the GIC portion gives cities and towns power to make changes over time that will strengthen their finances. This is really the point for the near term.

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