The Download: IOU health care

There is no end to the constant drumbeat of health care as a public policy issue and a private dilemma. Yesterday, the well-respected Massachusetts Taxpayers Foundation released a first-of-its-kind report on the unfunded liabilities for municipal retiree health care and the numbers are staggering.

While much of the focus on Beacon Hill has been about reining in health care for public workers and pensions, the report says those obligations are dwarfed by the estimated $20 billion and growing owed over the next 20 years for the promise of retiree health care for the top 50 communities in Massachusetts. Add in an estimated $5 billion to $10 billion more for the remaining 300 cities and towns and the estimated damage could leave taxpayers with unprecedented hikes in taxes and cuts in service.

“The retiree health care problem threatens to wreak havoc with local government budgets, and no individual community is immune,” the report states. “Governments already owe this, and the liability is rising every year.”

Haverhill Mayor James Fiorentini calls the news staggering. Salem Mayor Kim Driscoll says municipalities will either cut back retiree health care benefits or cut services and sink further into debt. But even that may not be enough to fill a hole that is estimated to be 2-1/2 times larger than the unfunded pension liabilities.

The report says the health obligations range from $59 million for Dartmouth’s retirees to $4.5 billion for Boston. It lays many of the problems at the feet of collective bargaining agreements that call for communities to cover as much as 90 percent of health care with copays as low as $5, which carries over into retirement for public employees and their spouses. Very few cities and towns require their retirees to join Medicare for coverage, one move the report cites as a solution that could reap immediate benefits.

The report also calls for communities to either join state Group Insurance Commission or gain control over plan design. However, there’s still some reluctance on the part of lawmakers and Gov. Deval Patrick to take on unions.

That, though, could change quickly with this report coupled with the never-ending rise in insurance premiums for taxpayers in the private sector who have plans that pale in comparison to those for municipal employees. Taxpayers may revolt against paying for Cadillac plans as they watch their own benefits and options fall while their premiums, deductibles and copays rise.

The Patrick administration finally released its regulations for changes in health care yesterday that mandate tiered and limited network plans at reduced costs, while also opening up the process to allow smaller employers to join cooperatives with other private employers to increase buying power. At the same time, the administration is touting its push for global payments as a way to put pressure on providers to manage patient care.

Health insurers and state regulators patted themselves on the back this week for keeping increases to less than 10 percent, but former Beth Israel Deaconess CEO Paul Levy says that’s a pyrrhic victory and obfuscates many of the real causes and problems for the industry.

It is, as Mark Twain once famously said, much like the weather in New England: Everybody talks about it but nobody does anything about it.

                                                                                                                                                                                    –JACK SULLIVAN

BEACON HILL

A Methuen rep has filed a bill that would cap state pensions at $91,000 rather than the current $120,000 a year, the Eagle-Tribune reports.

The state Parole Board faces more questions as police charge a paroled murderer with assault and battery, the Salem News reports.

State Sen. Marc Pacheco says if he runs for Taunton mayor and wins, he will not rule out staying in the Senate and serving dual roles.

Senate President Therese Murray sits down with Emily Rooney to talk about the pressure on officials at all levels as a result of federal, state, and local budget cuts, the rise of health care costs, and the search for solutions such as casino gambling.

FISHERY

The Gloucester Times reports on the role of the Environmental Defense Fund in establishing catch share limits that fishermen say are destroying their way of life.

BUSINESS/FINANCE

The $20.1 billion sale of Genzyme, the state’s biggest biotech company, to French pharmaceutical giant Sanofi-Aventis is on.  The Wall Street Journal offers its take. WBUR’s Curt Nickisch discusses the implications.

Bernie Madoff gives his first jailhouse interview to the New York Times. The Ponzi schemer says his family didn’t know he was a crook, but insists that some banks and hedge funds “had to know.” 

TRANSPORTATION

Massport head Tom Kinton will announce his retirement at today’s board meeting, the Associated Press reports

Sen. John McCain calls for ending federal subsides for small airports. No Massachusetts airports made the list, but airports in Maine, New Hampshire, and Vermont could potentially be affected under the plan.

The short-term plan by the region’s commuter rail operator for addressing service failures in bad weather includes more timely and accurate announcement of delays and a pared back schedule of trains. That does little to help people get to work on time, but a comprehensive fix to the problems encountered this winter involves tens of millions of dollars to replace an aging fleet of trains and upgrade other infrastructure.

MUNICIPAL MATTERS

Last year’s halfhearted elimination of Evacuation Day and Bunker Hill Day will wind up costing Suffolk County municipalities overtime pay.

Some Metro West residents can expect their towns to pay for mailboxes that were damaged by plows this winter. Others can fuggedaboutit.

A Fitchburg city councilor is alleging his colleagues cooked up a student housing district in violation of the state’s Open Meeting Law

Banks are setting aside billions of dollars to loan municipalities shut out of the bond market. 

Salisbury officials want to know whether West Newbury withheld information about their former police chief, who recently resigned amid a sex-for-cash scandal.

A disciplinary hearing for Lynn Chief Financial Officer Richard Fortucci is zeroing in on the wiping out of six computer hard drives in the office of former mayor Edward Clancy, Jr., the Item reports.

WBUR’s Radio Boston airs its second installment on why Boston taxicabs are so expensive.

ENERGY/ENVIRONMENT

Falmouth may become the “poster child” for how not to site some onshore wind turbines if the state environmental officials decide that the town relied on data that was not properly compiled by consultants during the study phase. Meanwhile, Cape Wind draws yet another challenge.

Energy hogs in western Massachusetts can expect to pay more for electricity if they don’t start conserving, according to the president for Western Massachusetts Electric. The company provides electricity to 200,000 customers.

FEDERAL BUDGET

The Cape Cod Times has this round-up of potential cuts to social services to low-income families and individuals on the Cape.

The Springfield Republican supports a White House proposal to gradually do away with Fannie Mae and Freddie Mac.

ELECTION 2012

Salem Mayor Kimberley Driscoll tells Joe Battenfeld she’s “definitely taking a look at” a run against Sen. Scott Brown.

Meanwhile, Ted Kennedy Jr. decides not to run for the US Senate in Connecticut.

Haley Barbour, a southern gentleman who wants to be president, turns down another chance to disavow a commemorative KKK license plate, saying, “I don’t go around denouncing people.” 

STATURE AND STATUES

Talk of erecting a statue of Bill Russell in Boston got a big-time assist yesterday when President Obama endorsed the idea at a White House ceremony where the Celtics legend was one of 15 Americans awarded the Presidential Medal of Freedom.

PHILANTHROPY

Margaret McKenna, a one-time civil rights lawyer and former president of Lesley University in Cambridge, is now running one of the biggest corporate philanthropy operations in the country, the Walmart Foundation.

EDUCATION

Boston students complain that they aren’t getting enough sex education, particularly on how to prevent unsafe sex activity, WBUR reports.

BOSTON POLITICS

Tito Jackson showed that he’s a man of electoral action, romping over five fellow candidates in yesterday’s preliminary special election to fill the Roxbury-based city council seat formerly held by Chuck Turner. Jackson will face second place finisher Cornell Mills in the March 15 final election, but after collecting nearly 70 percent of yesterday’s vote, he’s the overwhelming favorite.

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