Communities Find Health Cost Savings Through New Law

(Metropolitan Area Planning Council and The Boston Foundation)

A new survey finds that about three-quarters of cities and towns in the region are beginning to save millions of dollars in health insurance costs after a 2011 law that made it easier for communities to change health plans or join with the Group Insurance Commission. According to the new report from the Metropolitan Area Planning Council and The Boston Foundation, 78 of 101 communities have implemented such reforms, or are planning to.

“The new reform law, passed with support of municipal, labor and business leaders and enacted in July 2011 will easily exceed projected savings of $100 million during its first year,” the report says.

Here are some reforms that have led to savings, according to the study:

  • In 2011, Salem adopted the new health insurance reform law and then reached an agreement with its unions to enter the GIC. The agreement is expected to save the city approximately $1.3 million in its first year.
  • In 2011, Somerville adopted Section 21 but ultimately came to an agreement to join the GIC through Section 19 coalition bargaining. The city is expected to save $9 million in the first year of the agreement.
  • In 2011, prompted by the impending passage of the new law, Revere reached a plan design agreement with first-year savings of approximately $1.5 million.

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Smallest Premium Hike In Over A Decade For State, Town Workers

More from WBUR’s Martha Bebinger:

The 375,000 state and municipal workers who get their health insurance from the state insurance plan, the so-called Group Insurance Commission, will see the lowest premium increases in more than a decade.

GIC chief Dolores Mitchell

If you’re insured through the GIC, you may not even notice the 1.4 % average increase. Premiums are barely rising, in part because patients are seeking less care. GIC director Dolores Mitchell says tough negotiations with insurers and providers are also paying off.

“I’m hopeful that we’ve set an example that others will try to emulate,” she says, “particularly in relation to the limited network effort that we’ve been doing.”

The GIC gave bonuses this year to members who chose cheaper limited network plans. April enrollment will test whether members are satisfied with less choice of doctors in exchange for lower cost insurance.

Speaker DeLeo Says Towns Must Match Or Join State Health Plan

House speaker Robert A. DeLeo

Massachusetts House speaker Robert A. DeLeo spoke to the Greater Boston Chamber of Commerce today on a variety of topics from gambling to probation. Here’s what he said about municipal health insurance, according to prepared remarks:

I’d like to move to another topic that is particularly important to me – one that was a key part of the agenda I laid out January. This concerns the way our cities and towns provide health insurance for their employees. By the time the House completes its work on the state budget, we will have passed legislation that establishes the state’s Group Insurance Commission as the benchmark against which all municipal plans will be measured. If cities and towns can’t meet or beat the GIC, they will be forced to join it. I’ve seen my hometown of Winthrop save $800,000 annually by joining the GIC. If all cities and towns did so, this would collectively save $100 million. Whether cities and towns join the GIC or come up with their own plan, we need to realize at least that much in savings.

I am well aware of the competing municipal healthcare proposals out there – plan design, certain labor proposals and other ideas from elected officials. In fact, I was encouraged to see a coalition of unions took a step in the right direction with a proposal they offered last week. Unfortunately, this proposal did not go far enough.

Through the GIC, municipal employees can have quality healthcare at an affordable price. I can talk about it from first-hand experience. Like most public employees and state officials, I receive my healthcare through the GIC.

We absolutely must find a way to ease the financial pressures at the local level. Cities and towns will face brutal budgets in the coming months. Yes, we can ask local budget officers to work harder and smarter in their contracting for services and purchasing of supplies – but we are tinkering at the margins and at the end of the day, this tinkering isn’t going to make much of a difference. If we want to do what’s right for our children who attend public schools; if we want to provide public safety protection at adequate levels; if we want our streets plowed and our trash collected – it’s high time we give cities and towns the tools – through legislation – to make more than a dent in the cost of municipal health insurance.

Word from people present: Tufts Health Plan chief Jim Roosevelt asked DeLeo about the timing on health reform to contain health care costs, and DeLeo — much like House Majority Leader Ron Mariano last week — said it’s possible the legislature will come through with a plan this year, but it may well take until next year. That blurry timetable left some in the business community dissatisfied and calling for more urgency.

Federal Overhaul Could Hike Premiums Up To 3% For State’s Largest Employee Group

GIC director Dolores Mitchell

WBUR’s Martha Bebinger reports:

Across the country, health insurers say the Affordable Care Act is pushing up health insurance premium rates. (See this Denver Post story on the picture in Colorado.)  The new law requires, for example, that insurers extend family coverage to children up to age 26 and waive patient charges for preventive tests and visits. Employers in Massachusetts are calculating the cost of these additional benefits as well as more generous coverage established in the federal mental health parity law.

The state’s Group Insurance Commission (GIC), which covers more than 300,000 state employees, dependents and retirees, estimates these changes could increase premiums by as much as 3%.  So is the law just shifting patient costs from one place to another?

GIC director Dolores Mitchell says she hopes the answer is no.  She says she’ll try to reduce the 3% increase through tough negotiations with doctors and hospitals.

“I’m going to be pushing my health plans very hard about not simply passing along provider rate increases as though they were inevitable,” says Mitchell.  “I don’t think they are inevitable.”

Keep in mind that the new benefits and costs will take effect when you renew coverage; for GIC members that’s next July 1st.