Salem mayor says health care impasse may require ballot solution

By Gabrielle Gurley

Unless more immediate steps are taken to rein in accelerating health care and pension costs, municipal officials will continue to triage community services to pay for employee benefits, local municipal leaders and policymakers warned a Boston Foundation forum audience Wednesday.

Mayor Kimberley Driscoll of Salem said cities and towns might resort to taking the health insurance impasse, whether unions should have a say in certain insurance plan design changes, to voters if a legislative solution isn’t found. A bill that would remove plan design changes from the collective bargaining process is pending on Beacon Hill.

“An initiative petition might be the only solution,” she said. Big city mayors began meeting about the ballot plan earlier this year.

House and Senate leaders and Gov. Deval Patrick have expressed reservations about the legislation, and a House “municipal relief” plan did not include plan design. 

Driscoll also said that some mayors are hoping to meet with statewide union leaders to try and hash out a compromise before the end of the legislative session in June. The earliest a successful ballot initiative question could come before voters would be 2012.

According to the Massachusetts Municipal Association, cities and towns would save an estimated $100 million statewide if they had the authority to determine rates for certain health insurance plans features such as copayments and deductibles.

Last year, Driscoll wanted to raise copayments from $5 to $15, which would have saved the city $1.2 million. The city’s eight unions opposed the move even though it would have avoided layoffs.

The kind of relief that would make a sizeable difference to municipal budgets lies in cities and towns joining the Group Insurance Commission, which runs the state employee health insurance system.

But municipal employee unions have strongly opposed entry into the GIC. Under the current framework, changes in municipal employee health insurance plans, from the insurer who provides the plan to payments for office, and emergency room visits are negotiated through collective bargaining agreements with municipal unions.  

To join the GIC, 70 percent of union members must agree to the changes. But GIC officials make plan design alternations for state employees through administrative or legislative means.

Only 19 cities and towns have joined the GIC in the three years since the state allowed municipalities and other government organizations to participate. (Brookline and Hopedale are scheduled to join the GIC this July.)

Bob Carey of RLCarey Consultants, who authored of a February Boston Foundation/University of Massachusetts report on municipal health care costs, noted that four communities (Boston, Cambridge, Melrose, and Marshfield) could have reduced their fiscal 2010 health care premiums significantly if they had joined the GIC.

Melrose, the only one of the four communities to join the state system, will likely save 15.8 to 17.4 percent or $1.6 million to $1.8 million on its fiscal 2009 health insurance premiums.

Carey added the that unwillingness of some communities to make additional changes, such as to move moving eligible retirees into the Medicare system, costs cities, towns and the state tens of millions of dollars each year. “It’s a no-brainer,” he said.

On the pension side, Samuel Tyler, head of the Boston Municipal Research Bureau and an author of “Providing Pensions in Difficult Times” a report on state pension’s system impact on Boston released yesterday, noted that the most egregious abuses in the pension system, such as provisions that allowed elected officials to receive a entire year’s worth of pension credit for one day of service, had been eliminated.

The challenges now are better management of the system and more equity in how benefits are calculated. Recommendations included widening the salary averaging period from three to five years and capping the maximum pensions at $85,000.

But frustrations about health care dominated the forum’s panel discussion which, in addition to Driscoll, featured Michael Widmer, president of the Massachusetts Taxpayer Association, Boston City Council President Michael Ross, and Joel Barrera, deputy director of the Metropolitan Area Planning Council.

Meet the Author

Gabrielle Gurley

Senior Associate Editor, CommonWealth

About Gabrielle Gurley

Gabrielle covers several beats, including mass transit, municipal government, child welfare, and energy and the environment. Her recent articles have explored municipal hiring practices in Pittsfield, public defender pay, and medical marijuana, and she has won several national journalism awards for her work. Prior to coming to CommonWealth in 2005, Gabrielle wrote for the State House News Service, The Boston Globe, and other publications. She launched her media career in broadcast journalism with C-SPAN in Washington, DC. The Philadelphia native holds degrees from Boston College and Georgetown University.

About Gabrielle Gurley

Gabrielle covers several beats, including mass transit, municipal government, child welfare, and energy and the environment. Her recent articles have explored municipal hiring practices in Pittsfield, public defender pay, and medical marijuana, and she has won several national journalism awards for her work. Prior to coming to CommonWealth in 2005, Gabrielle wrote for the State House News Service, The Boston Globe, and other publications. She launched her media career in broadcast journalism with C-SPAN in Washington, DC. The Philadelphia native holds degrees from Boston College and Georgetown University.

Boston pays more on health care than it does on public safety, said Ross. “We are cannibalizing core services to pay for a systemic failure in municipal finance,” said Ross, who noted that while libraries and community centers were bearing the brunt of cuts this fiscal year, next year would likely see more school closings.

Driscoll said that Salem is still looking to the municipal unions to give her the tools to manage costs more effectively. “It seems really simple to me, but it’s really hard to get to solutions.”