Local Insurance Changes Loom

Local Insurance Changes Loom

GIC Mandate Proposed

Filing his third barebones budget in as many years, Governor Deval Patrick has proposed a significant change to local health insurance plans in an attempt to plug growing budget deficits that are the result of the ongoing economic recession.

In addition to slashing the budget of the state’s Group Insurance Commission (GIC) by $100 million for FY12, the Governor is also proposing a 7% cut in non-school local aid to cities and towns. In order to offset local aid cuts, Patrick has reintroduced a plan that could drastically alter municipal health plans.

Patrick’s plan would force communities with insurance costs higher than those of the state GIC to either redesign their plans to lower costs or be forced to join the GIC. Local retiree and union officials would have a limited time to negotiate changes with local officials, after which the GIC option would be triggered if an agreement was not reached.

While Patrick had proposed a similar idea in 2008, the legislature opted for a more tempered approach utilizing coalition bargaining and local public employee committees (PEC).  However, the mood of legislative leaders – at least in the House – may have changed and could now support the Governor’s proposal, at least in part.

During his remarks after being elected to again lead the House in the 2011-2012 Session, House Speaker Robert DeLeo singled out municipal health insurance reform as a top priority. DeLeo indicated that he now favors mandatory enrollment in the state GIC, similar to the position taken by the governor.

The Speaker also expressed his concern that municipalities not be allowed to simply shift their health insurance costs onto to the backs of retirees and employees.

“We do not view the GIC as a one-size fits all solution. And we will continue to fight to ensure our members have a voice in the process, prior to any changes being made,” said Association President Ralph White. “I was happy to hear the Speaker acknowledge the need for communities not to simply cost shift onto retirees. Our members are just as concerned about rising healthcare costs as anyone else.”