plan design


A Gathering Storm of Health Care Costs: Local, State, National

Maybe I’m just sensitized to news on health care costs because it’s a central focus of CommonHealth, but the last couple of days have struck me as a gathering storm of daunting reports from all sides — from the national to the state to the local level. Consider:

At the local level, The Boston Herald reports here that health care costs are driving cities and towns to go into the municipal equivalent of credit card debt.

In the most recent example, Gov. Deval Patrick is weighing a proposal to permit Orange, a western Massachusetts town of fewer than 8,000 residents, to borrow $445,000 to cover health care claims and pay it back over the next five years

Richard Kwiatkowski, Orange’s town administrator, said Tuesday that the high cost of health care – and inaction on controlling municipal health costs on Beacon Hill – had led to the town’s predicament and its push to borrow.
“The trust fund has been around since 1991. It’s worked for 20 years. What’s impacted trust funds is the cost of health insurance skyrocketing,” he said. “Until somebody steps up and gets control of that, then you can’t collect enough in premiums to cover the amount of claims that are put in.”
Kwiatkowski noted that other cities and towns faced similar – in some cases, greater – challenges to covering health care costs. In fact, Orange modeled its borrowing plan on a similar one approved for North Adams last July, Donelan said, describing a “handful” of other communities that have also sought borrowing authority. The North Adams plan authorized the city of about 15,000 to borrow $880,000 to cover excess health care bills.

At the state level, we’ve got brewing conflict over how to cut health insurance costs for those local workers. Continue reading