Blue Mass Group

Reality-based commentary on politics.

Reform before revenue: Springfield/GIC edition

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New report from big time Boston think tanks Rappaport Institute and Collins Center says there's gold in them thar GIC hills:

 The study finds that, by joining the Group Insurance Commission (GIC), Springfield cut increases in its health care costs an estimated $14 million to $18 million over two years. It saved an additional $5 million per year by requiring eligible municipal retirees to enroll in Medicare Part B as a precondition of receiving supplemental health coverage from the City. These two actions, together, reduced increases in the City’s health care costs an estimated 15-19% annually, on average, with savings growth each year due to compounding. Furthermore, the study estimates that if the GIC continues its past pattern of keeping its cost increases lower than those experienced by other large Massachusetts cities, the City will save another $42 million to $64 million over the next three fiscal years, not including Medicare savings. It is especially noteworthy that Springfield’s employees and retirees also benefited from the shift to the GIC, because the GIC offered them lower premiums, reduced out-of-pocket expenses, and a wider choice of insurance plans.

Wow. I don't know what those health plans were like beforehand, but it sounds like they were completely unsustainable … In any event, Springfield saved itself some serious scratch. I hope other municipal unions will give this a second or third look, since a little adjustment and flexibility with this might save some of their jobs these days.

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  1. most other municipal employees and retirees are offered richer coverage with lower out-of-pocket costs than the health plans offered by the GIC. Because Springfield members were offered GIC health plans with lower premiums and lower member cost-sharing than the City’s health plans, the decision to join the GIC was an easy one to make. This will likely not be the case for most municipal workers.

    Springfield’s employees and retirees may have higher average health care costs than the average GIC member. This means that when Springfield’s members were merged with the larger GIC pool, the City’s average cost of insurance was reduced.

    Moving retirees onto Medicare Part B seems like a no-brainer.  But I’m sure people will let me know why this would be an affront to the dignity of collective bargaining and one step away from euthanizing retired workers.

  2. “Wow. I don’t know what those health plans were like beforehand, but it sounds like they were completely unsustainable … In any event, Springfield saved itself some serious scratch”

    <

    p>Might be key to understanding that situation.
    Start with the insurance they had before Springfield’s employees were screwed by Romney’s Control Board.

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