Municipal Health Care Review

The Massachusetts Taxpayers Foundation, headed by Michael Widmer, has released an analysis of the impacts of the newly enacted municipal health care bill. I had a chance to talk about it this week on WCAP, and it is in the news as results are now coming in from communities that have actually enacted the legislation.

Widmer, who was a strong advocate for the changes, has analyzed results from participating communities, which show results that will lead to savings that will exceed the original estimate of $100 million. From the Massachusetts Taxpayers Foundation Press Release:

As of February 1, at least 91 communities (Table 1) and school districts had taken steps to adopt the reform law or change their health plans through collective bargaining. Of that group:

Nine municipalities have adopted the law and implemented health plan changes that are
expected to result in $30 million in first-year savings. Six more are expected to finalize
agreements in the next month.

12 communities anticipate first-year savings of $30 million from health plan changes
achieved through the collective bargaining process since January 2011.

38 communities and school districts have voted to adopt the reform law but have not yet
begun formal negotiations.

26 communities and school districts have scheduled votes to adopt the law.
It is clear that the reform law’s first-year savings will soon surpass the $100 million threshold;
the 21 communities that have already achieved $60 million in health plan savings represent only
a fraction of the cities and towns expected to implement the reform.

Widmer calculates based not only on the savings achieved by communities that have adopted the law, but also bases his analysis on the obvious benefits that have accrued to communities that have negotiated collective bargaining agreements after the adoption of the law. Reforming the laws governing municipal health care was not easy, and took longer than it should have. But those driving reform, principally the Mayors of Massachusetts, can now look back and see that the effort was exceedingly worthwhile. And it is not so just for management. As Widmer points out employees are also seeing large cost reductions.

Municipal employees and retirees will receive almost half of the $30 million in savings in the
nine communities that have made plan changes through reform. Employees and retirees will see
$13 million in savings in two ways – reduced premiums and one-time mitigation agreements that
have included Medicare Part B subsidies, premium holidays, and reimbursements for out-ofpocket expenses. Mitigation packages, which will ease the financial impact of plan changes, are
determined during the 30-day negotiating period between management and employees. The total
value cannot exceed 25 percent of a community’s first-year savings from reform, but the
mitigation benefits can be spread over several years.

As we expected the early verdict is in on municipal health care reform, and the real winners are the property taxpayers of Massachusetts. I have attached both the press release and the report from the Massachusetts Taxpayers Foundation. Michael Widmer has done a truly outstanding job on this issue.

munihealthreform-update-feb8_2012

muni-health-release-wh_2-7-12

This entry was posted in Health Care Reform, Municipal Finance and tagged , . Bookmark the permalink.

One Response to Municipal Health Care Review

  1. Jules Gordon says:

    Your Honor,

    The new law gives the municipalities a bargaining chip in negotiations with the union. A few towns have realized saving through negotiating with union such that they stayed on the existing plan.

    Jules

    Like

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