Charlie Baker on Municipal Health Care

Charlie Baker released his municipal health care plan yesterday, and it bears close resemblance to the plan put out by the new Mayor’s coalition. Baker is trying to seize some fertile political ground, and has even adopted our call for a referendum in 2012 if legislative action is not forthcoming. It is the correct position, and along with pension reform addresses the two main drivers of municipal costs. Good job by Charlie Baker. The plan is below.

Municipal Health Benefits Relief Act
Massachusetts’ cities and towns have been hit hard by the economic crisis and have faced significant cuts to their local aid the last two years. Communities have limited options to deal with these cuts, and local governments across the state have had to make difficult decisions to balance their budgets. Job losses at the local level have directly impacted essential services such as public safety and education. Communities have also responded to declining revenues with cuts to core municipal services, increases in local fees and the adoption of local option meals excise taxes. Significant changes are needed to help cities and towns deal with the enormous fiscal problems they are facing today, especially if taxpayers want to avoid additional taxes, fees hikes and cuts to local services.
Municipal Health Benefits Relief
Municipal health insurance relief is needed to provide communities with the power to update their health insurance plans outside of the collective bargaining process. This authority will help local governments manage escalating operating costs and declining state aid.
Lawmakers on Beacon Hill must take immediate action to enact these changes now. If lawmakers refuse to support these reforms on their own, support must be given to a referendum to put plan design on the 2012 ballot. Massachusetts’ voters should be afforded the opportunity to save taxpayers in this state up to $100 million if lawmakers can not make this decision on their own.
1. Amend state law to allow municipalities to join the state’s Group Insurance Commission without union approval
State law was changed in 2007 to allow cities and towns to join the state’s Group Insurance Commission (GIC), provided they receive 70 percent of union approval. This requirement gives unions a veto in the approval process. Joining the GIC nets substantial savings for the taxpayers because the state’s health insurance premiums are lower than municipal premiums. For example, according to a Boston Foundation report, the City of Melrose joined the GIC in July 2009 and is likely to save between $1.6 million to $1.8 million. To date, only 19 communities have joined the GIC because of the union approval requirement. Cities and towns must be given the authority to join the GIC without union approval.
2. Amend state law to give municipalities plan design authority
Currently, municipalities are required to negotiate and receive union approval to implement changes within their health insurance plans even though the state of Massachusetts does not have this requirement. Local governments must collectively bargain and obtain union approval for basic changes in health insurance plans such as co-pays and deductibles. A recent study by the Boston Foundation estimates that giving cities and towns plan design authority will save taxpayers up to $100 million. Cities and towns must be given the same authority that the state has to change, update and modernize the design of municipal health insurance plans, provided the plans are comparable to the state plans offered to state employees.

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