Local Insurance Reform Now Law

Local Insurance Reform Now Law

SEPTEMBER 2011 VOICE: The seven-year odyssey, that has been a string of municipal health insurance reform initiatives, has closed its latest chapter with the passage of a new law that could dramatically reshape how local insurance plans are negotiated and established.

Beginning this past January when Governor Patrick submitted his reform proposal, continuing through House (April) and Senate (May) budget debates and into the conference committee deliberations, our Association worked hand-in-hand with public employee unions through months of intense negotiations. At times meeting daily for hours on end, the Coalition, known as the Public Employees' Coalition on Municipal Health Insurance, formed an unbreakable bond around the need to protect vulnerable retirees and employees.

"No question, we've just been through a very intense few months negotiating this new law. There were weeks in which the Coalition met nearly every day, for hours on end, going over every detail of the proposals," recalls Association President Ralph White. "But, this is critical, so it was important for us to get the best deal possible to protect our members. Shawn Duhamel and Bill Rehrey, our Association's representatives within the Coalition, did a great job fighting for retirees and survivors."

Throughout the process, Association officials also kept in close contact with Legislative Leaders and their staffs. This dialog helped buttress against the continued attacks by the media calling for draconian changes to pass.

Governor Strikes Deal

After the House and Senate passed very different reform bills within their respective budgets, it was up to the 6-member Budget Conference Committee to arrive at a compromise approach. And while the Committee's final report produced a much friendlier proposal toward retirees and employees, certain critical protections remained absent.

Within hours of receiving the FY12 Budget on July 1, Governor Deval Patrick dispatched his Secretary of Administration and Finance Jay Gonzales and Labor Secretary Joanne F. Goldstein to meet with Coalition leaders and listen to our concerns. In the week that followed, a time when many people were on vacation for the July 4th holiday, Patrick helped craft a final deal between our Coalition, municipal officials, business groups and the Legislative Leadership.

The deal, signed into law on July 12, satisfied three key Coalition demands:

• Retirees and employees have a meaningful voice in negotiations.
• Retirees, survivors and employees be protected from runaway out-of-pocket costs (and retirees/survivors granted premium contribution protection).
• Quality of health insurance plans maintained.

"If I had to single out one person to give credit for finalizing this deal at the 11th hour it would be Secretary Goldstein. She and her staff stepped in at the governor's request, brought all sides quietly together and was able to establish consensus. That was a pretty impressive feat," said Association Legislative Liaison Shawn Duhamel. "Because she is so universally respected, Joanne was able to broker a final deal.

"In the end, we have a new law that allows local governments to save over $100 million, while still providing basic rights and protections for retirees, survivors and employees. It's important to remember that those savings are the result of lower premiums and, if the premiums go down, then retirees and survivors will also be paying less in premium dollars. Even more importantly, because of the premium contribution protection language originally added by the Senate (later revised in conference and by governor), you could argue that retirees/survivors are better off under this new law."

Another significant aspect of the final agreement makes clear that municipal leaders may only make unilateral changes to copayments and deductibles up to the level set by the GIC. Any change with insurance carriers, networks or other plan design features must be negotiated.

On July 11, through a series of parliamentary procedures, the governor returned the Municipal Health Insurance Reform proposal to the Legislature with the agreed upon changes. Within hours, both the House and Senate had enacted the bill and returned it to his desk for final approval the following morning.