Who is a member?
Our members are the local governments of Massachusetts and their elected and appointed leadership.
Late on Friday, July 8, Gov. Deval Patrick, House Speaker Robert DeLeo, Senate President Therese Murray, the MMA, and a statewide coalition of labor unions announced an agreement on four refining amendments to the municipal health insurance reform act that is on the governor’s desk, paving the way for final action today.
Gov. Deval Patrick had been undecided about whether to sign the reform as presented to him by the Legislature on July 1, but the governor, legislative leaders and key stakeholders were able to find common ground.
Municipal health insurance reform has commanded center stage on Beacon Hill ever since the House of Representatives passed its reform proposal in April. The final product preserves the reform framework that House members embraced by a vote of 113-42.
The municipal health insurance reform provisions are attached as outside sections of the fiscal 2012 state budget. The governor was expected to return the municipal health provisions to the Legislature early today, recommending adoption of the amendments. House and Senate leaders have scheduled formal sessions for this afternoon and have pledged to immediately adopt the amendments and return the reform to the governor so he can sign the final version into law.
“The final legislation that the speaker, governor and Senate president have all agreed on is a very strong reform act that removes ultimate health insurance plan design decision-making from collective bargaining, saves taxpayers money, preserves essential local services, protects municipal union jobs, guarantees equity with state employee health benefits, and provides municipal unions with more bargaining power than state unions,” said MMA Executive Director Geoff Beckwith. “It is a balanced and fair reform that would allow cities and towns to save $100 million in avoided health insurance costs, while providing a voice for municipal unions in the process. Cities and towns will be able to use this reform to provide relief for local taxpayers, protect essential services, and preserve thousands of municipal jobs.”
The four amendments being filed by the governor are intended to refine and clarify several provisions of the reform. They are intended to be the final changes, enabling the act to become law on July 11, 2011.
Shared savings. Under the reform act, cities and towns will set aside up to 25 percent of the first year’s savings to fund a mitigation plan to offset the impact of plan design changes (or entrance into the state’s Group Insurance Commission) on retirees, heavy users of the health care system, and low-income employees. The first of the governor’s amendments would calculate the one-time shared savings amount based on total savings achieved in the first year, not just the governmental unit’s share of the savings. For a community with an 80-20 contribution ratio, this amendment would increase the one-time mitigation amount by 5 percent, adding a one-time cost of $50,000 for every $1 million of savings during the first year.
GIC. The second amendment would set a threshold for unilateral decisions to transfer subscribers into the GIC. Under the amendment, communities would demonstrate that transferring into the GIC would save 5 percent more than the savings that could be achieved by making changes to health insurance plan design (increasing co-payments, deductibles and introducing tiered network plans) to existing insurance plans. The MMA was pressing for no threshold, but agreed to the amendment because it is highly unlikely that any city or town would transfer its employees and retirees into the GIC unless there is a savings advantage (particularly since joining the GIC would result in a loss of control and requires a three-year commitment to the state, plus administrative fees).
Retirees. The bill enacted by the Legislature eliminated a Senate-approved section that would have forced dozens of communities to increase the municipal contribution ratios for retirees; the section was replaced with a provision that would have delayed any increase in the contribution ratio paid by retirees for a two-year period for any community that uses the reform act to implement plan design changes. The third amendment would extend the period to three years. Thus, communities making plan design changes or joining the GIC under the new law would not be allowed to increase retiree contribution ratios from July 1, 2011, through June 30, 2014, unless the contribution ratio changes were approved prior to July 1, 2011.
Plan design. Under the act that the Legislature sent to the governor, cities and towns would be authorized to include co-payments, deductibles, tiered network co-payments and other plan design features no greater in dollar amount than the most-subscribed plan in the GIC. Unions voiced concern that the “other plan design features” language could be misinterpreted to allow cities and towns to use their authority to strip employees of basic coverage offered in health plans (such as chiropractic or mental health services). The governor’s amendment would change the language to “other cost-sharing plan design features.” The amendment would refine the law, but would not have an impact on the intended scope.
In a statement, the MMA applauded the leadership of Speaker DeLeo, House Ways and Means Chair Brian Dempsey and Vice Chair Stephen Kulik, Gov. Patrick, Administration and Finance Secretary Jay Gonzalez, Senate President Murray, Senate Ways and Means Chair Stephen Brewer and Vice Chair Steven Baddour, budget conferees Rep. Vinny deMacedo and Sen. Michael Knapik, Public Service Committee chairs Rep. John Scibak and Sen. Katherine Clark, and all of the members of the House of Representatives and Senate who advocated for reform this session.