Study Says Massachusetts Municipalities Can Save Big On Health Insurance
Cash strapped municipalities throughout Massachusetts have been given an option to reduce their healthcare insurance costs according to a report by the Massachusetts Taxpayers Foundation.
The report which concedes that municipalities struggling to manage budgets face an increase in healthcare insurance costs of over 60% since 2001, while municipal budgets have only increased by about 15% over the same period of time. The report stated that municipalities that join healthcare insurance plans offered though the states Group Insurance Commission (GIC) can save significantly on the cost of health insurance for municipal employees.
Signed into law by Governor Duval Patrick earlier this year as part of his Municipal Partnership Act the initiative allows municipalities to purchase low cost health insurance plans though existing state plans. By allowing cities and town to purchase health insurance thorough the GIC, the risk pool is increased and costs are reduced. The report stated that health insurance costs for State employees rose only half as much as the cost of medical coverage for municipal employees since 2001. The report went onto say that if all municipalities took health insurance options offered through the GIC by 2018 only 23% of municipal budgets would be consumed by healthcare costs. As opposed to over 35% if they do not exercise those options.
While the idea is sound to save local tax dollars by buying into state health insurance offerings, not everyone is pleased with the report. Labor unions in particular say it limits choice and removes their collective bargaining power when it comes to purchasing health insurance for their membership.
But under the plan labor unions will have a say in whether a town or municipality buys into the state health insurance offering. Agreement by 70% of union membership is required before a city can purchase a healthcare plan from the GIC, and a local municipality cannot scrap existing health insurance plans to buy into a state plan even if it represents more affordable health insurance without the OK of its union workers.