Reform Proposals Taking Shape

JULY 16, 2012: The Special Commission on Retiree Healthcare will enter the next phase of its deliberations this Wednesday, July 18th, when it convenes its third meeting in as many months.

Comprised of 11 members, the Commission’s purpose is to study and investigate both the long-term and ongoing cost of public retiree healthcare. The Commission is then to file a report with the Legislature by November 30, detailing its findings and making recommendations for further reforms.

Just one year ago this month, Chapter 69 of the Acts of 2011 (Municipal Health Insurance Reform) was signed into law with great fanfare by Governor Deval Patrick. As a local option measure, the bill was expected to save municipalities $100 million in FY13, which began this July 1. Just last week the state announced that first year savings greatly exceed expectations with over $178 million saved.

As we have previously reported, the Special Commission is tasked with identifying a new round of reforms, aimed at lowering long-term health care liabilities. However, it is anticipated that steps will be reviewed that may garner immediate savings within current budgets.

At the May and June meetings, Commissioners received testimony and presentations detailing background issues for consideration. Our Association presented a report detailing the benefits and costs Associated with retiree healthcare benefits.

Following the July meeting, it is expected that a series of policy questions will be posed to an actuarial firm soon to be hired by the state. The firm will analyze potential reforms and attempt to detail each potential cost impact. In September, the actuary will report its findings to the Commission.

“I expect that we’ll begin to see general policy guidelines start to take shape at this week’s meeting, then actual reform proposals put forward in mid-September,” said Association Legislative Liaison Shawn Duhamel, who serves as the Commission’s Retiree Representative. “We’ll soon know, what, if any impact these potential reforms will have on both state and local retirees. And remember, unlike last year’s Municipal Health Insurance Reform law, this Commission is also examining the state Group Insurance Commission (GIC).

“Our position is simple, it is unfair to financially burden current retirees and survivors with increased insurance costs. They should be held harmless from this next round of reforms, which is mainly focused on long term costs of healthcare over the next 40 years.”