City Leaders Hope to find Big Savings in Health Insurance

City leaders from Chelsea, Revere and Everett are lobbying hard this week to bring some healing to the budget buster that is municipal health insurance.

Chelsea City Manager Jay Ash has been in close association over the past several weeks with Revere Mayor Tom Ambrosino and Everett Mayor Carlo DiMaria in lobbying Gov. Deval Patrick’s office for a change in municipal health insurance.

Reportedly, they have had a private meeting on the issue with the governor’s administration and finance director, Jay Gonzalez.

And it looks like it might bear fruit this time.

Likewise, there are good signs coming from the Legislature, with House Speaker Bob DeLeo (D-Winthrop) putting the issue as one of his top three priorities last week during his inaugural address.

A spokesperson for DeLeo recently confirmed that they would be tackling the issue sooner rather than later.

“It’s definitely something they will take up in the coming session,” said Seth Gitell, DeLeo’s spokesman. “They don’t have all the details worked out, but they will certainly be focusing on it.”

Health insurance costs for city employees have skyrocketed over the past 10 years and is typically the largest increasing item every year in the budget. It has coincided with the national trend of increasing health care costs.

Last year, mayors from all over the Commonwealth pushed hard to get some sort of reform, but it fizzled out at the last minute – buried in a state Senate committee.

In the end, nothing was done, yet costs have continued to bury cities like Chelsea, Revere and Everett.

Yet this year seems different.

One of the key changes suggested is moving municipal employees – including teachers – into the state’s Group Insurance Commission (GIC). The GIC is an insurance program that is made up of a huge pool of state workers. Some municipalities like Quincy have already joined and have reaped great savings.

However, many police, fire and teacher unions are hesitant to make the jump – as it will cost them more money on premiums and co-pays. There is also some reasonable debate as to whether it would give them less access to care.

At the moment, for a municipality to join the GIC, some 60 percent of any city’s entire union membership must vote to join. Most unions also use the potential move to the GIC as a bargaining chip – trading it for salary increases or some other benefit.

Mayors are hoping that the state will do away with the voting process, allowing them to move city workers into the GIC without a vote and taking it out of collective bargaining.

Naturally, with that on the table, one can see why it has been so controversial and why it has routinely died in the face of union pressures.

This year, though, financial conditions are tougher than they’ve ever been and especially within city budgets. Therefore, the millions that would be saved in Chelsea and other cities by joining the GIC are looking a little less contentious.

Chelsea City Manager Jay Ash said that when he started in 2000, health insurance made up 5 percent of his City’s budget. In 2010, that number has grown to an unsustainable 13 percent.

“We’ve been doing a lot of other things to keep down costs, but when one particular cost grows by double digits for 10 years, it can wreak havoc on your budget,” he said. “It takes an average of six single-family homes paying taxes in Chelsea to cover one employee’s health insurance for a year. It’s not a sustainable system.”

Mayor Tom Ambrosino said that Revere could save nearly $5 million a year going into the GIC.

He said there have been several efforts to bring workers into the GIC, but so far objections have come strongly from the teachers and firefighters unions. He said that the only hope probably lies in state administrative and legislative action.

“Our hope is that there is something in the governor’s budget that includes health insurance relief for municipalities,” he said. “They’re trying to balance the concerns of municipal leaders and municipal unions right now. I get the sense from Secretary Gonzalez they are very serious and want to do something that will help. We’ll see at the end of the month when the State Budget proposal comes out.”

In Everett, the savings are just as eye-popping as everywhere else.

The potential of saving anywhere from $3-5 million per year is on the table in Everett.

Added Ash, “We were told that municipal health insurance reform is one of the Governor’s priorities. Several ideas were batted around, but no concrete proposal was put on the table. Gonzalez said he was talking with labor unions this week and will be back in touch with everyone soon to discuss something more concrete.”

That said, there is also another way to reap such savings – and that’s with a ballot question.

Ash and Ambrosino said that a number of city leaders throughout the state have pledged to put health insurance reform on the 2012 ballot if nothing is done this year.

“It would be a shame if it came down to that, but at the same time if that’s what it takes to get reform, maybe it needs to be explored,” said Ash.

Ambrosino said it would be a ballot question that would probably prevail.

“I don’t think there would be too many voters all that interested in preserving the health insurance collective bargaining rights of municipal employees, especially in these financial times,” he said. “I don’t think it would be popular with the general public.”

All three cities and their workers should know more about the status of their health insurance programs by the end of the month.

1 comment for “City Leaders Hope to find Big Savings in Health Insurance

Leave a Reply

Your email address will not be published. Required fields are marked *