Senate Approves Major Restructure of State GIC

Senate Approves Major Restructure of State GIC

Mass Retirees Gains Commission Seat

MAY 24, 2017: Wednesday morning the Massachusetts Senate approved a major restructure of the state’s Group Insurance Commission, granting our Association and two additional public employee unions seats on the 17-member Commission.

The change comes as a result of intense negotiations lasting well into Tuesday night between Senate leaders, our Association and the legislative teams from nearly every public employee union. Negotiations were sparked by our collective attempt to cap the rise in out-of-pocket costs now impacting retirees and active employees.

A deep concern of our Association and union leaders working together as a coalition has been the lack of transparency and open discussion by the GIC. Union and retiree representatives on the Commission have been out numbered 11-6, leading to limited debate and lopsided votes in recent years.

“Anne Paulsen does an excellent job representing retirees on the Commission, but there is no guarantee that Governor Baker will reappoint her later this year when her term is up. We have always believed the commissioner holding the ‘Retiree Seat’ should be nominated by our Association,” said Association President Frank Valeri. “We also feel strongly that active employees should be fairly represented. Adding two labor seats will bring about positive change.

“I also want to thank the AFL-CIO and the leadership of all public employee unions for the support they continue to provide our Association. The high level of cooperation and camaraderie that exists amongst our coalition is exactly why we can now find success in protecting all of our collective members.”

Coalition members embraced a proposal by the National Association of Government Employees (NAGE) to add the Mass. Organization of State Scientists and Engineers (MOSES) and SEIU Local 509 to the Commission. If accepted by the House/Senate Budget Conference Committee and passed into law, the change will result in a total of 7 union and 1 retiree seat on the GIC.

In addition, the Senate included language to require the GIC to hold no fewer than 2 public hearings each year – BEFORE any changes in copayments, deductibles, plan design or premium costs can be approved. This new requirement is in direct response to complaints lodged this past winter when the Commission approved some $150 million in new copayments and deductible increases without input from plan enrollees.

In an effort to address the rise in out-of-pocket costs, the Senate has approved the creation of a special Senate working group that we expect, will be comprised of our Association, union leaders, legislators, GIC officials and healthcare experts. The goal of the working group is to clearly determine current costs on retirees and employees, as well as formulate long-term solutions.

“Everyone knows that the current system is broken. We have members suffering as a result of ever-higher insurance costs that is the result of a broken healthcare system, where costs continue to escalate beyond control. The Senate is rightly taking the long view here and creating a new system where we will work together to find a solution,” explains Legislative Director Shawn Duhamel.

Key Senators Step Forward

To begin the Senate’s budget debate, the coalition filed two amendments related to the GIC. Both were filed by Senator Michael Brady (D-Brockton), who diligently worked behind the scenes to gain the support of his colleagues.

Amendment 266 redrafted the GIC itself, adding Mass Retirees and two new labor seats.

Amendment 268 would have capped annual out-of-pocket costs under the GIC, as well as certain municipal health plans where local insurance plan design changes have been implemented under the Municipal Healthcare Reform Law. The cap, which has long been sought by our Association, limits annual OPC at $2,500 per individual or $5,000 per family (current GIC limits are $5,000 / $10,000).

Soon after debate on the FY18 budget began Tuesday morning coalition members received word that passage of #268 was in doubt due to cost estimates placing the price of the amendment in excess of $32 million for FY18.

“The cap simply protects the sickest and most vulnerable from being bankrupt from healthcare costs. Thankfully, very few people or families hit the current limits. But these costs are devastating to those who do,” says Duhamel. “We don’t know where that cost estimate came from, but we believe it was greatly exaggerated. If it is that high, then it only enforces our point that we have members suffering financially due these costs.”

As the day wore on, scores of retirees and employees called and emailed Senate offices seeking support for the amendment’s passage and helping grow bipartisan support.

Shortly after 8pm, coalition members met with Brady and members of the Senate’s senior leadership: Tom McGee (D-Lynn), Marc Pacheco (D-Taunton) and Linda Dorcena Forry (D-Boston), to discuss a proposal to create a long-term solution.

The result was the passage of revised versions of both amendments 266 and 268.

“Senator Brady was not only willing to file amendments that he knew would be tough to pass, but he stood tall and worked hard to achieve a positive solution. Our Association is grateful to those Senators who cosponsored the bill, as well as to Senators McGee, Pacheco and Forry, along with Pat Jehlen and Sal DiDomenico for their help and getting this deal done,” said Valeri. “I firmly believe that all public retirees will benefit by the stability this change will bring to the GIC.”

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