If enacted by the State Senate, the reform bill could save Somerville $8.3 in health care costs, preserving City services and jobs
*

Mayor Joseph A. Curtatone is lauding the Massachusetts House of Representatives and Speaker Robert A. DeLeo for the 111-42 passage of a municipal health insurance reform bill that could save Massachusetts cities and towns more than $100 million.

Originally proposed by Governor Patrick earlier this year, the House bill would allow cities and towns to enter the State’s Group Insurance Commission (GIC) or a similar plan in order to reduce the exploding cost of providing health coverage for municipal employees. Somerville’s healthcare costs have more than tripled during the past decade, rising to $36 million in the current fiscal year.

A switch to the GIC could represent approximately an $8 million savings to the City.

“Speaker DeLeo and the House have delivered for the people of Massachusetts,” Curtatone said. “This is a common sense change that must be made to help keep municipalities solvent. We understand the Commonwealth does not have the money to give us the direct state aid we have had in the past, but at least it can give us the tools to reign in our outrageous healthcare costs. In Somerville we are currently looking to close a $7.5 million budget gap for the upcoming fiscal year. The passage of this bill is the difference between having a budget crisis and not having a budget crisis.”

The GIC covers all State employees and elected officials. It features plans from Harvard Pilgrim, Tufts, Fallon and Health New England, ranked numbers 1, 3, 7 and 8 in the nation by U.S. News & World Report. Most municipalities, including Somerville, are self-insured, meaning that they directly pay the costs whenever an employee goes to the doctor or the hospital.

In recent years, Somerville’s health insurance costs have risen 15% and 19%, while the GIC only rose 4% and 8%. If the City makes no change in its current insurance package, it expects another double-digit spike in healthcare costs. The standard family plan for a Somerville employee costs $10,000 more than the standard family plan on the GIC, and it costs the taxes from four two-family homes just to pay for a single family plan of a Somerville employee.

“Our current situation is completely unsustainable,” Curtatone said. “We cannot absorb double-digit healthcare cost increases every year. The Speaker courageously resisted efforts to water down this bill, instead choosing to make sure the taxpayers are the ones who get the savings. This situation is too grave for half a solution.”

Curtatone added that even though some unions have voiced opposition to the bill, it is a move that will benefit the rank and file of public employee unions.

“No one is losing anything here,” he said. “Public employees will be getting some of the best health coverage in the nation, just for a lower cost. And those savings will help preserve union jobs in our cities and towns. Also, it will help preserve quality health coverage for those employees, which would otherwise become an exorbitant cost at its current explosive growth rate.”

The bill now moves to the State Senate.

“I urge everyone in Somerville who values the services this City provides to call your Senator and urge him or her to pass the House version of this bill,” Curtatone said. “These savings are necessary to help maintain the momentum we have built in our school system, to ensure public safety, to deliver public works and to run quality programs for the youth and the elderly of Somerville. The reality is, if health costs continue to eat away at our budget, it will undermine all of our efforts to make positive changes in this city, and the service gaps it will create will most severely affect the least fortunate people in our community. If the Senate fails to follow the lead of the Governor and the House, the consequences would be brutal for the people of Massachusetts.”

(from the city of Somerville)