Our lead article in the July edition of The Voice was an editorial spelling out our deepening concerns regarding healthcare affordability and the impact that rising insurance costs have on public retirees.
Case in point, members have rightfully pointed out that, in many cases, the FY26 COLA that was paid in the July pension check does not cover the annual increase in health insurance premiums – let alone give retirees a fighting chance to keep pace with rising inflation.
Beyond sounding the alarm over affordability, the editorial also sought to serve as a call to action for stakeholder groups to come together in search of solutions to this growing crisis. Whether it be organizations such as Mass Retirees and public sector unions representing healthcare consumers, insurance companies, state agencies like the Group Insurance Commission, or the medical providers themselves – everyone has a stake in working together to improve our healthcare system.
The good news is that we are not alone in our belief that healthcare affordability has reached a crisis point, or on the need for close collaboration in search of solutions.
Since the July Voice was published in early June, several meetings have taken place on the general topic, with our Association playing a key role in leading those discussions.
INSURANCE PROVIDERS TAKE LEAD ROLE
As we mentioned in our July editorial, several of the state’s insurance providers have taken a leading role on the issue of healthcare affordability, as well as steps that can be taken to gain control over or limit the growth of healthcare costs.
For instance, in early 2024 BCBS of MA commissioned and released a comprehensive survey on healthcare affordability in Massachusetts. The finding that some 40% of MA residents report having forgone a healthcare procedure, test or medication due to cost should serve as an immediate wakeup call that a crisis is underway.
Members know that Mass Retirees has a very close and longstanding relationship with BCBS that dates back more than 50 years. Frank Valeri, Shawn Duhamel, and Nancy McGovern each serve on the BCBS MA Labor Advisory Committee.
In June, five senior BCBS officials travelled to our Beacon Hill office for a comprehensive and lengthy discussion regarding our concerns, as well as what initial steps can be taken to assist our members. While conversations are ongoing, Mass Retirees members can expect to receive more frequent and detailed communications aimed at helping retirees access and better navigate your benefits.
This same approach also applies to Wellpoint and the GIC. For example, members who have participated in recent Tele-Town Hall meetings featuring Wellpoint General Manager David Morales have heard about the insurance provider’s focus on “whole person, whole health”. In addition, Wellpoint’s ongoing collaboration with Senscio Systems in providing access to the Ibis Telehealth platform is a real-time example of innovative steps being taken to improve outcomes, prevent hospital stays, and naturally lower costs over time.
The GIC and the state’s Health Policy Commission (HPC) have each publicly placed a spotlight on the fact that cost shifting does not save healthcare dollars in the long-term. Study after study have proven that the opposite is true: The higher the healthcare cost placed on the individual, the more people will choose to forgo needed care due to cost, which in turn only leads to higher overall costs in the long run.
In addition to being unfair, this is a primary reason why the GIC, under the leadership of Executive Director Matt Veno, has publicly resisted calls to increase copayments and deductibles.
Mass Retirees is also a member and active participant in the Public Sector Healthcare Roundtable. Based in Washington, DC, the Roundtable is an association serving nearly 35 public sector health plans across the country. Participating plans range from the massive California public sector plan to the New Hampshire Healthcare Trust. The GIC is also a member.
“Not only do we learn a lot by working directly with our insurance plans here in MA, as well as with the plans operating in other states, but I believe that the plans are well served by hearing our perspective. Afterall, these plans exist to benefit public retirees and employees,” said Mass Retirees CEO Shawn Duhamel. “By providing the perspective of our members and creating a direct line of communication to retirees, the health plans and the government agencies responsible for providing benefits are more successful in their approach.”
One example of the value of such collaboration amongst entities is the growing issue of GLP-1 medications. Originally brought to market as a treatment for Type 2 diabetes, GLP-1s were discovered to be a highly effective treatment for obesity. However, the cost of the monthly injectable is very high and partially attributable to the recent sharp rise in health insurance costs.
As these medications have grown in popularity, so have the costs associated with providing the benefit. Despite strong evidence of both the effectiveness of the medication and the long-term benefits to the enrollee and the health plan, to stem rising costs, there is a growing trend by plans to either limit or no longer cover GLP-1s for weight loss.
Governor Healey recently proposed that the GIC limit coverage starting in January, but current state law prohibits the GIC from making mid-year plan design changes. The governor has proposed suspending that law for FY26, which is something Mass Retirees adamantly opposes.
“Whether it be GLP-1s or any other approved healthcare treatment, we do not believe that blanket prohibitions on coverage be issued simply based on cost. Today it is GLP-1s, but tomorrow it is another type of specialty drug aimed at treating another disease. This is not the right approach to controlling costs or providing effective care,” comments Duhamel. “That said, there is no question that the cost of these medications is not only ridiculously high, but also unaffordable in the long-term. Controlling drug prices must be a focus going forward.”
COLLABORATION BY PUBLIC & PRIVATE SECTOR UNIONS
One of the great strengths of the approach taken by BCBSMA with their Labor Advisory Committee is that the group includes representatives from public and private sector unions, as well as nonprofit associations such as Mass Retirees. Bringing organizations with different benefit structures and approaches to healthcare together is not simply a benefit to BCBS, but also to the varying groups involved.
In July, the Massachusetts AFLCIO hosted a virtual meeting of all public and private sector unions operating within the Commonwealth that began to lay the foundation for greater collaboration amongst the various labor groups on healthcare issues.
While Mass Retirees is a private nonprofit association and not a union, we have enjoyed a decadeslong close working relationship with labor and the AFL-CIO. The Association is frequently invited to not only participate in meetings related to pension and healthcare issues, but we are often called upon to share our unique expertise on related topics.
At the July meeting, Mass Retirees joined AFT MA, SEIU 1199, and the Bricklayers Union in presenting to the larger group that included more than 40 representatives of various labor organizations from across Massachusetts. The focus of our Association’s presentation was the legal structure of our public sector health insurance laws (Chapters 32A and 32B), along with the political process that exists in governing these benefits.
“We want to thank MA AFL-CIO President Chrissy Lynch for inviting Shawn and I to actively participate in the meeting. As Chrissy indicated, this was the first of many formal steps now being taken by labor to get out in front of these issues and work toward common solutions for our collective members,” says Mass Retirees Director of Healthcare and Retirement Advocacy Nancy McGovern. “Hearing from the building trades, as well as unions representing healthcare workers, provided us with a comprehensive overview of how different groups provide benefits to their members, as well as the various approaches being taken to control rising costs. We believe the AFL-CIO plans to hold additional meetings early this fall, where the discussion will focus on cost containment options.”
NEW FOCUS ON MUNICIPAL CONCERNS
Back in 2010, the primary trigger for what became an effort by former Governor Deval Patrick to “reform” public sector healthcare benefits was the rapidly rising cost of municipal health insurance. Yes, growing costs for the GIC were also a factor in what became an all-out brawl between labor and Mass Retirees on one side and state and municipal governments on the other, but the belief that local insurance costs had become an “unsustainable budget buster” drove the reform argument.
That fight not only ended with employees losing some longheld bargaining rights, but with all employees and retirees paying more for their insurance benefits. The worst aspects of the reform proposals were defeated, largely with the help of our Association which placed the focus of the debate on what we viewed as measures harmful to public retirees.
“Thankfully, we had strong leaders such as Marty Walsh and Katherine Clark serving in the state legislature at that time. They took up our cause and helped broker a compromise,” recalls Duhamel, who was the Association’s legislative liaison at the time. “Nancy McGovern was with AFSCME at the time. She and I worked closely to protect our respective members and learned some valuable lessons. We’re not about to take anything for granted going forward.”
Beyond general concerns regarding rising costs, Mass Retirees is alarmed by reports of potential financial instability amongst some local insurance plans. These concerns are compounded by what we view as a lack of transparency by some plans, coupled with very little state oversight of municipal insurance plans in general.
To be clear, Mass Retirees believes that most municipal insurance plans are well run and operate with enrollees’ best interest in mind. And no retiree is in danger of losing insurance coverage. All municipalities do have the option of joining the state’s GIC.
One specific issue that has been flagged by our Association and labor as a concern is what appears to be a conflict of interest by certain health insurance broker/consultants operating at the municipal level, whereby the same company is allegedly providing both services to the same municipal entity simultaneously.
At our request, legislation has been filed by State Representative John Lawn (D-Watertown), that would not only prohibit the practice but also provide transparency on fees and costs associated with consultant and broker services. Representative Lawn is the House chairman of the Joint Committee on Healthcare Finance. The legislation is now before the Joint Committee on Public Service, where it received a public hearing on July 9th.
“These problems at the local level, while certainly not something we would like to see, have the benefit of bringing legislative attention to the bigger issues at play. We do not want to see the situation worsen to the point where another large reform proposal is filed. We see this fundamentally as a healthcare financing challenge, on best addressed through collaboration between Retirees, Labor and Management. Having been down that road in 2010, it is not a fight we want to revisit. That is why it is so important that attention be brought to these issues now and we work collectively on solutions. Retiree healthcare is far too important to leave anything to chance,” added McGovern.