Business Backs Municipal Officials in Bid to Control Health Costs

Posted by John Regan on Mar 7, 2011 10:45:00 AM

The spiraling cost of health insurance that threatens the economic future of Massachusetts is simultaneously eroding the ability of city and town governments to deliver educational, public safety and other services upon which that economic future depends.

Municipal Health ReformThat’s why Associated Industries of Massachusetts will testify at a legislative hearing tomorrow in favor of a bill we filed - H.2457, An Act Relative to Municipal Health Insurance Reform – that would allow municipal officials to negotiate health insurance plan design outside of collective bargaining.  AIM and a coalition of business groups called Mass Reform First believe that H.2457 provides meaningful short-term relief and long-term cost stability for municipal governments working to provide affordable and accessible care for their employees and retirees.

Absent meaningful reform, the 351 cities and towns in Massachusetts will find themselves swallowed by accelerating health care premiums that are already diverting scarce money from schools, police, fire and the maintenance of roads and bridges. Rising health premiums consumed two-thirds of all increases in state spending between FY 2000 to FY 2010 and are also diverting desperately needed state education funding from the classrooms where the future of our economy now sits.

Several communities have even taken the nearly unthinkable step of borrowing money to meet their health insurance obligations.

H.2457 proposes two important legislative reforms to help local governments control the cost of health insurance and preserve essential services:

  • Give local officials the power to design their health insurance plans outside of collective bargaining.
  • Require by statute that all eligible local retirees enroll in Medicare as their primary source of health insurance coverage.

The potential savings from these two changes dwarf those from all other municipal relief proposals.

The business community supports our municipal communities in this matter because employers realize that the financial underpinnings of the health care system must change to ensure the survival and growth of both private and public sectors. Four years after the passage of the landmark Massachusetts Health Reform Act, virtually everyone agrees that the Massachusetts health care market is unsustainable without fundamental changes to the way companies and consumers purchase medical services.

No one knows that better than the Massachusetts employers struggling to provide decent health insurance coverage to their workers in the face of 20 percent, 30 percent and 40 percent annual premium increases. A staggering 97 percent of AIM member employers who responded to a recent survey identified the cost of health care as the primary impediment to economic growth and opportunity in the commonwealth.

AIM commends the Legislature for addressing this issue early in the legislative session.  We also credit the governor for adding a sense of urgency to the issue and affirming our shared goal of lowering health care costs.  The time is now to offer relief and we cannot let the fact that the solutions are hard to implement or disruptive of the status quo be an excuse for not forging ahead to resolve the health care cost crisis.

Topics: Massachusetts Legislature, Associated Industries of Massachusetts, AIM, Municipal Reform, Health Care Costs

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