Municipal health insurance costs are creating an unsupportable squeeze on municipal budgets. Over a year ago, I took a position favoring change in municipal employee health insurance — click here to read that post. In a nutshell, under current collective bargaining rules, it is so unwieldy for municipalities to negotiate changes in municipal health care plans that many municipal health care plans have become very expensive, even compared to the state’s plan (the contrast is even starker compared to private plans).
The challenge for managers wanting to make any change in health care plans for their employees is that they must simultaneously negotiate with many unions to bring them all to the same place — health care plans must by law be identical for all employees in a community and most communities’ employees are divided among many distinct unions. I basically favor the approach proposed by the Massachusetts Municipal Association, which gives municipal managers the power to make plan design changes without collective bargaining. I would give municipal managers the ability to make changes, but within a structure defined by comparison to the state’s plan, to protect employees from arbitrary decisions, and would put in place a formula to assure that employees share in the benefits of cost-savings.
The major municipal unions, notably the teachers and the firefighters union have come out strongly against change. Responding to their concerns, while trying to make progress on the issue, some Senators have been advocating a complex approach which would involve arbitration if municipal managers couldn’t reach agreement with unions on plan design changes. In my view, and in the opinion of most municipal managers, this proposal is not workable. Complex arbitration procedures will only create business for lawyers and consultants. The legislature’s municipalities committee recently proposed a set of municipal relief measures that omitted any change in health care bargaining rules — this reflects the political stalemate between unions and municipal managers.
The legislature is most comfortable acting when opposing parties have reached some kind of agreement. In 2007, for example, an agreement was reached to make modest changes to municipal health insurance law. The teachers unions supported the agreement and, although the firefighters did not, that was enough to get the deal done and the bill passed. At the time, I expressed reservations that it might not go far enough, but embraced the bill. Those changes have proved to be far too limited and have resulted in little cost-saving.
The Boston Globe has embraced the management perspective on this issue and recently highlighted the issue in a series of recent articles and columns, for example, click here. The Globe story reflects a public relations campaign for change that joins groups from diverse perspectives — the Boston Foundation, Stand for Children, the Massachusetts Municipal Association, the Massachusetts Taxpayers Foundation. That campaign is having an effect. The legislature is really beginning to focus on making something happen and I am starting to be hopeful that we’ll have a bill this spring.