CLT UPDATE
Thursday,
June 16, 2011
"The rats are in the seed corn again"
The public employee
unions seem awfully quiet since the Senate's version of
health insurance reform was introduced....
Optimists like the Salem News hope
"acceptance of the Senate version may also signal a
recognition that the current cost of health benefits offered
by cities and towns ... are indeed unaffordable."
We cynics sit back and wait to taste the
sausage before judging its flavor.
—Commentary; CLT Update, June
3 – "On Beacon Hill 'The Dealing Starts'"
Last-minute provisions inserted in the Senate
budget undermine much of the effort on Beacon Hill to give cities
and towns the tools they need to control the rising health care
costs of municipal workers. It’s a setback to the stellar work of
the House, which earlier passed a plan to save an estimated $100
million annually by allowing municipalities to place their workers
in the state’s less-costly Group Insurance Commission or a similar
plan....
These provisions must not become law. House and
Senate negotiators must restore the House language to a final bill —
and the Senate should pass it....
Unions and special interests battered the House,
seeking to weaken the municipal health reform effort. The House
stood firm. There wasn’t much action in the Senate, however.
Suddenly, it’s clear why. The Senate isn’t serious about municipal
health care reform.
A Boston Globe editorial
Thursday, June 9, 2011
Shady changes to Senate bill undermine health care savings
The proposal submitted by the Massachusetts House
of Representatives would grant municipal managers greater control
over plan design and also allow easier entry into the GIC (the state
employees’ insurance pool). As the Globe noted, the Senate’s
provisions “undermine much of the effort on Beacon Hill to give
cities and towns the tools they need to control the rising health
care costs of municipal workers.”
The Pioneer Institute
Friday, June 10, 2011
Serious About Municipal Health Reform
Finally, it seemed, the Legislature was ready to
defy the unions and take positive action to help cities and towns
curb their employee health insurance costs. Now, it turns out, there
may have been a double-cross.
Language quietly inserted in the Senate version
of the relief package could cost some as much as they figure to save
by gaining greater flexibility in the type of health insurance plans
they offer workers.
A new mandate added as a "technical amendment" to
the FY 2012 budget approved by the Senate would require communities
to adjust retiree health insurance premiums so the percentage they
paid was no greater than that paid by active employees.
The Massachusetts Municipal Association, in an
urgent mailing to members this week, called the provision "a
reform-killer," noting "In many communities this would completely
wipe out the savings from any plan design reform, provide an
unaffordable windfall for retirees, and dramatically increase OPEB
(Other Post-Employment Benefits) liabilities by millions of
dollars."
An Eagle-Tribune editorial
Monday, June 13, 2011
Senate sabotages towns on plan design
With lawmakers now engaged in secret negotiations
over municipal government health insurance reforms likely to
undercut collective bargaining rights, local government leaders on
Tuesday urged Beacon Hill officials to grant them broad authority to
make health plan changes that will trim local costs....
But local government managers, after waging a
seven-year fight for greater control over health plans, are worried
that a six-member conference committee won’t produce a bill capable
of guaranteeing the promised savings.
During a meeting of the Local Government Advisory
Commission, municipal officials said they were concerned savings
would be undermined by a Senate-approved plan requiring that
retirees pay the same share of premiums as current employees, a
proposal that supporters say will protect seniors living on fixed
incomes.
After it was tucked into the Senate budget, the
provision is now stirring intense debate, with local government
officials criticizing it as a “reform-killer” and public retiree
representatives describing it as a thoughtful protection for
vulnerable seniors seeing more of their limited income being
siphoned away by rising health premium costs.
State House News Service
Wednesday, June 15, 2011
Municipal officials worry developing reform plan won't produce
savings
State senators who are undermining a critical
municipal health insurance reform effort say they’re simply looking
out for retired public servants who are living on fixed incomes.
But what about the retirees living on fixed
incomes in the same community who didn’t have the good fortune to
retire from government jobs? They’re among those who will continue
paying through the nose if this attempt to “protect the vulnerable”
makes it through.
Indeed, if the measure survives final budget
negotiations, all local taxpayers could be denied the most
meaningful relief from the high cost of providing health insurance
to employees and retirees....
Yes, we know, municipal retirees are a powerful
lobby on Beacon Hill. But they shouldn’t have the power to gut real
reform.
A Boston Herald editorial
Wednesday, June 15, 2011
The perils of ‘parity’
A Massachusetts Taxpayers Foundation report
released yesterday reveals the glaring flaws in the Senate-approved
version of a bill meant to give cities and towns more control over
the cost of employee health plans. Indeed, the watchdog group points
out that by requiring some municipalities to increase health
benefits for retirees, "the Senate amendment runs directly counter
to the entire purpose of the municipal health reform legislation" —
which is to allow them to spend less, not more, on health
insurance....
Every time it looks like our elected leaders
might offer taxpayers a chance to save a dime, they end up handing
out our savings — and more — to one of their favored interest
groups. Or, as one editor here noted, the rats are in the seed corn
again.
An Eagle-Tribune editorial
Wednesday, June 15, 2011
Spending our savings before we see it
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Chip Ford's CLT
Commentary
Righteous cynicism wins out again.
We simply cannot be cynical enough when it comes
to the Massachusetts Legislature. The scurrilous gamesmanship on
Bacon Hill is always so predictable that I can't comprehend how this
latest scheme can surprise anyone. In Massachusetts, political
cynicism should be everyone's default position until proven wrong.
It's always a safe bet that nothing is as it seems or as it ought to
be.
To read the political tea leaves, often the trick
is to appreciate not what is being said, but what is not.
The unions' abrupt silence was deafening
— a sure sign that something underhanded was
in the works, a deal with the devil had been quietly if not secretly
struck.
Back in April, after the
House of Representatives passed its initial version of government
employee health insurance reform, Robert Haynes, Massachusetts
AFL-CIO president, tersely wrote to House members:
“You are either on the
side of collective bargaining for the workers who have been
willing to compromise on this issue, or you are against those
collective bargaining rights and want to reward intractable,
uncompromising management advocates like the MMA. All votes
relating to the matters discussed in this letter may be
considered Labor Votes and calculated into Labor Voting Records
upon which endorsements and levels of support are determined.”
When the Senate announced
its version, the unions responded with — deafening silence.
While others chose to
perceive this as a sign that unions had recognized and were prepared
to concede that government employee benefits reform was critical,
unavoidable any longer, some of us expected otherwise.
Two weeks ago I wrote, "We
cynics sit back and wait to taste the sausage before judging its
flavor." This still holds, as others have discovered.
The future is in the hands
of the six-member House-Senate conference committee, which held its
first closed-door meeting last week. The committee conferees are:
Will the result be
long-overdue reform before bankruptcy — or fraud and inevitable
fiscal disaster, sooner rather than later?
Once the compromise bill is
done, it'll go back to the full House and Senate for a final vote [see
the full process here].
Contact your state senator and representative; tell them you
want real reform to rein in costs, not lip service and more
smoke-and-mirrors.
They should support the
House version of government employee health insurance reform.
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Chip Ford |
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The Boston Globe
Thursday, June 9, 2011
A Boston Globe editorial
Shady changes to Senate bill undermine health care savings
Last-minute provisions inserted in the Senate budget undermine much
of the effort on Beacon Hill to give cities and towns the tools they
need to control the rising health care costs of municipal workers.
It’s a setback to the stellar work of the House, which earlier
passed a plan to save an estimated $100 million annually by allowing
municipalities to place their workers in the state’s less-costly
Group Insurance Commission or a similar plan.
Just a few weeks ago, it seemed that the Senate also understood that
cities and towns could no longer provide basic city services if
forced to cover double-digit increases in health care costs for
their workforce. Apparently not. The Senate budget passed instead
with amendments that would almost certainly discourage communities
from seeking relief. The worst by far is a provision that would
require cities and towns that seek to make changes to their health
care plans to equalize the percentage of costs paid by active
workers and retirees. If, for example, a town now pays 85 percent of
the premium for current workers and 70 percent for retirees, local
governments would be forced to pay the difference — a potentially
huge expense.
These provisions must not become law. House and Senate negotiators
must restore the House language to a final bill — and the Senate
should pass it.
The Massachusetts Municipal Association estimates that savings in at
least a third of the state’s communities would be wiped out under
the ill-conceived retiree adjustment plan in the Senate budget.
Perhaps the senators were hibernating in February when the
Massachusetts Taxpayers Foundation released a report showing that
the state’s 50 largest cities and towns alone face a retiree health
care bill of $20 billion over the next 30 years.
Other mischief in the Senate budget would make it harder for cities
and towns to join the GIC or steer workers into lower-cost tiered
network plans common for state workers.
Unions and special interests battered the House, seeking to weaken
the municipal health reform effort. The House stood firm. There
wasn’t much action in the Senate, however. Suddenly, it’s clear why.
The Senate isn’t serious about municipal health care reform.
The Pioneer Institute
Friday, June 10, 2011
Serious About Municipal Health Reform
Pioneer
Institute commends The Boston Globe Editorial Board for
taking a firm stance on reasonable reforms to collective bargaining
that will benefit municipalities struggling to manage budgets in
this time of economic hardship (“Shady changes to Senate bill
undermine health care savings” - June 9, 2011). The proposal
submitted by the Massachusetts House of Representatives would grant
municipal managers greater control over plan design and also allow
easier entry into the GIC (the state employees’ insurance pool). As
the Globe noted, the Senate’s provisions “undermine much of the
effort on Beacon Hill to give cities and towns the tools they need
to control the rising health care costs of municipal workers.”
Over the last three years, Pioneer has led the way in calling for
change. We have actively blogged on the issue, most recently
comparing the House and Senate proposals. In June 2008, we released
a policy brief, GIC Consolidation, that calculated the potential
savings for Middle Cities that entered the GIC. We built an on-line
decision support tool, the GIC Estimator, to help municipal
employees and managers calculate the premium and out-of-pocket cost
differentials between GIC plans and current plans. Our “Hit the
Ground Running” and “Countdown to Fiscal Sanity” series include a
recommendation to lower the GIC threshold. Just last month, we
called for adoption of the House's budget amendment on municipal
health care reform. Read our recent op-ed in the Boston Business
Journal, “Handing
it to the House,” and in the Fall River Herald News, “Municipal
health care reform can help Fall River.” In these pieces, we
note that over the last decade, the percentage of city and town
budgets spent on health care costs has increased from roughly 7% to
14%.
Like The Boston Globe, Pioneer recognizes that policymakers
must take serious action to address local budget pressures while
ensuring that municipal employees are treated fairly.
The Eagle-Tribune
Monday, June 13, 2011
An Eagle-Tribune editorial
Senate sabotages towns on plan design
Finally, it seemed, the Legislature was ready to defy the unions and
take positive action to help cities and towns curb their employee
health insurance costs. Now, it turns out, there may have been a
double-cross.
Language quietly inserted in the Senate version of the relief
package could cost some as much as they figure to save by gaining
greater flexibility in the type of health insurance plans they offer
workers.
A new mandate added as a "technical amendment" to the FY 2012 budget
approved by the Senate would require communities to adjust retiree
health insurance premiums so the percentage they paid was no greater
than that paid by active employees.
The Massachusetts Municipal Association, in an urgent mailing to
members this week, called the provision "a reform-killer," noting
"In many communities this would completely wipe out the savings from
any plan design reform, provide an unaffordable windfall for
retirees, and dramatically increase OPEB (Other Post-Employment
Benefits) liabilities by millions of dollars."
If the legislative leadership is serious about helping cities and
towns deal with crippling health care costs, they will make sure
this and several other Senate add-ons are removed from the final
budget that emerges from conference committee later this month.
Other objectionable Senate provisions include:
● Limits on the type of plans
that could be offered municipal employees.
● A burdensome review board
process in those communities where the unions objected to proposed
changes in the health plan.
● Language that would allow a
single union to delay implementation of any changes for up to three
years.
Taken together, these provisions seem almost designed to discourage
municipalities from seeking changes in their health plans — despite
the fact such changes would save millions of dollars a year.
Area mayors have been complaining for a long time now that rising
health costs are the main obstacle to any effort to improve
municipal services or stabilize property taxes. Finally, it
appeared, the Legislature was ready to help. Maybe not.
Local Senators Steven Baddour, D-Methuen, Barry Finegold, D-Andover
and Bruce Tarr, R-Gloucester, as well as other members of the
Merrimack Valley legislative delegation should rally behind their
colleagues on the municipal side and work to achieve meaningful — as
opposed to meaningless — reform.
State House News Service
Wednesday, June 15, 2011
Municipal officials worry developing reform plan won't produce
savings
By Michael Norton
With lawmakers now engaged in secret negotiations over municipal
government health insurance reforms likely to undercut collective
bargaining rights, local government leaders on Tuesday urged Beacon
Hill officials to grant them broad authority to make health plan
changes that will trim local costs.
House and Senate reform supporters say their proposals will enable
cities and towns to rapidly save $100 million across all
communities, helping them to preserve local jobs and services by
shifting some insurance costs, namely copayments and deductibles, to
employees outside of the collective bargaining process.
But local government managers, after waging a seven-year fight for
greater control over health plans, are worried that a six-member
conference committee won’t produce a bill capable of guaranteeing
the promised savings.
During a meeting of the Local Government Advisory Commission,
municipal officials said they were concerned savings would be
undermined by a Senate-approved plan requiring that retirees pay the
same share of premiums as current employees, a proposal that
supporters say will protect seniors living on fixed incomes.
After it was tucked into the Senate budget, the provision is now
stirring intense debate, with local government officials criticizing
it as a “reform-killer” and public retiree representatives
describing it as a thoughtful protection for vulnerable seniors
seeing more of their limited income being siphoned away by rising
health premium costs.
In a letter circulated to senators Tuesday, Sens. Katherine Clark
and Kenneth Donnelly disputed the reform killer label critics have
affixed to their retiree proposal. “This is not a zero sum game:
retirees can be protected from undue costs shifting while ensuring
municipalities can achieve significant savings over the next
months,” the senators wrote, criticizing “overblown rhetoric pitting
retirees against communities.”
New Bedford Mayor Scott Lang said the Senate’s plan features three
or four “bulkheads” that might make it impossible for his city to
realize costs savings. Warning against reforms without enough teeth,
Lang said Beacon Hill was running the risk of recreating the
union-management fight at the local level, equating it to a “tong
war.”
“The Senate version just resets the battle scene,” Lang said. “I’m a
little bit leery right now the way it’s falling out.”
Salem Mayor Kim Driscoll said the details of the final plan are
critical. “It would be a shame to take it this far and not have a
solution that really fixes it,” she said.
Natick Selectman Josh Ostroff, president of the Massachusetts
Municipal Association (MMA), said the House approach to municipal
health insurance reform, the one that spurred the most outrage among
union officials worried about cost shifting to workers preserving
collective bargaining rights, is the preferred one among most local
government officials.
MMA Executive Director Geoffrey Beckwith said pending language, if
it survives conference talks, might force cities and towns to wait
until all of its union contracts expire before they can implement
changes.
Administration and Finance Secretary Jay Gonzalez assured local
officials the administration would not support legislation that it
felt suffered from implementation problems, would not lead to local
government savings next fiscal year, or lacked a “meaningful voice,”
without a veto, for public employee unions. If an accord is reached,
Gonzalez said, the administration intends to advance regulations to
implement the reforms “very quickly.”
The administration has some concerns about the retiree premium
language, Gonzales said, and was voicing its concerns to the
conference committee. Gonzalez said the Senate’s approach better
reflects the administration’s views on municipal health insurance
reform, but emphasized that both the House and Senate plans
authorize reforms that must be adopted locally while Patrick prefers
a mandatory approach.
“We’re hoping that everybody can give a little and get something
done,’ said Lt. Gov. Tim Murray, who took issue with Lang’s tepid
assessment of previous muni-government health insurance reforms and
said those changes, despite a low take-up rate among cities and
towns, had prompted private insurers to adjust their practices.
Murray also urged local officials who have made muni-government
insurance reforms a top priority to be “equally strong and
persistent” on the broader issue of health care payment system
reforms. “It’s making sure that everybody understands it has to
happen this year,” said Murray.
Lawmakers are holding hearings on Patrick’s payment reform plan and
Patrick administration officials in late June plan to hold four
consecutive days of hearings at Bunker Hill Community College on
health provider and payer costs trends.
After Driscoll asked how local officials could advance payment
reform, Gonzalez said they could help make sure groups like the
Boston Foundation and the Massachusetts Taxpayers Foundation, which
have pushed muni-government insurance reforms, bring the same level
of focus and intensity to the payment reform issue.
The $100 million savings estimate associated with municipal health
insurance reform exceeds the roughly $65 million cut in local aid
cities and towns are about to be hit with, beginning in July. The
local aid cut will arrive as state tax collections are running $674
million above projections with one month left in the fiscal year.
Gonzalez said the administration hoped to use some above-benchmark
revenues to replenish the state’s rainy day fund.
“We are sitting in a comfortable position going into the end of the
fiscal year,” Gonzalez said.
Gonzalez said the budgets for fiscal 2012 that cleared the House and
Senate feature many of the same priorities as the spending plan
Patrick submitted in January. “I’m very happy with the legislative
budgets,” he said.
The House and Senate included language in their budgets guaranteeing
that a competitive grant program sought by the administration will
survive in some form, Gonzalez said. He said the administration
hopes to foster competition among cities and towns for ways to
regionalize services, achieve cost savings and provide services
differently.
“The goal here is to provide new ways to do business,” he said.
The Boston Herald
Wednesday, June 15, 2011
A Boston Herald editorial
The perils of ‘parity’
State senators who are undermining a critical municipal health
insurance reform effort say they’re simply looking out for retired
public servants who are living on fixed incomes.
But what about the retirees living on fixed incomes in the same
community who didn’t have the good fortune to retire from government
jobs? They’re among those who will continue paying through the nose
if this attempt to “protect the vulnerable” makes it through.
Indeed, if the measure survives final budget negotiations, all local
taxpayers could be denied the most meaningful relief from the high
cost of providing health insurance to employees and retirees.
The House and Senate, of course, fought off all manner of attack
from organized labor to adopt separate reform measures that give
cities and towns more power to control health insurance costs —
costs that are crowding out spending in every other area of local
government. The measures, projected to save taxpayers $100 million,
are now the subject of closed-door negotiations.
But an analysis this week by the Massachusetts Taxpayers Foundation
concludes that dozens of municipalities and regional school
districts would end up paying higher costs for retiree health care —
costs that would consume “much — if not all — of the savings” — if
one amendment, adopted on the Senate floor, is retained in the final
bill. And that’s simply unacceptable.
The amendment mandates that cities and towns contribute the same
amount for retiree health plan premiums as they do for active
employees. So if a community now pays 70 percent for active
employees and 50 percent for retirees, the retiree contribution
would have to be jacked up. The measure also ties the hands of
communities with large retiree health care liabilities, who would be
restrained in future cost-saving efforts.
Yes, we know, municipal retirees are a powerful lobby on Beacon
Hill. But they shouldn’t have the power to gut real reform.
The Eagle-Tribune
Wednesday, June 15, 2011
An Eagle-Tribune editorial
Spending our savings before we see it
A Massachusetts Taxpayers Foundation report released yesterday
reveals the glaring flaws in the Senate-approved version of a bill
meant to give cities and towns more control over the cost of
employee health plans. Indeed, the watchdog group points out that by
requiring some municipalities to increase health benefits for
retirees, "the Senate amendment runs directly counter to the entire
purpose of the municipal health reform legislation" — which is to
allow them to spend less, not more, on health insurance.
By allowing mayors, town managers and selectmen greater flexibility
in determining the kinds of plans that would be offered employees,
it was estimated the legislation would save cities and towns an
estimated $100 million per year in total. But for some, much of
those savings could be eaten up by a Senate provision that would
require communities to pay the same portion of retirees' health
insurance as they do for active employees.
Every time it looks like our elected leaders might offer taxpayers a
chance to save a dime, they end up handing out our savings — and
more — to one of their favored interest groups. Or, as one editor
here noted, the rats are in the seed corn again.
We hope House conferees will stick to their version of plan design
(which does not include the windfall for retirees) in resolving
differences between theirs and the Senate's version of the budget
for the next fiscal year.
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Citizens for Limited Taxation ▪
PO Box 1147 ▪ Marblehead, MA 01945
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