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March 03, 2010 | Health and Human Services
The Utility of Trouble: Leveling the Playing Field: Giving Municipal Officials the Tools to Moderate Health Insurance Costs

Steeply rising health care costs are forcing cuts in municipal services to residents across the state, but communities could save significant amounts of money by changing the way they provide health care to municipal employees.  That is the lead finding of the Understanding Boston report, The Utility of Trouble: Leveling the Playing Field: Giving Municipal Officials the Tools to Moderate Health Insurance Costs .  Potential savings range upward to well over $40 million dollars a year in the case of the City of Boston, according to new research, which includes five specific recommendations that could be used by communities across the Commonwealth.

According to the research, Boston could have reduced its 2010 health premiums by between 15.6 and 17.1 percent, for a savings of between $41.4 and $45.4 million by joining the state’s Group Insurance Commission, more widely known as the GIC. The City is unable to join the GIC, however, without first receiving 70% union approval, according to state law. This requirement and the associated tradeoffs involved are a major barrier to municipal participation in the GIC. Several cities and towns including Boston have called for cities and towns to have the same ability as the state to design health insurance plans.

“At a time when Boston may be forced to close as many as 10 branch libraries because of budget deficits, this report offers a strategy to cut costs, instead,” said Paul S. Grogan, President and CEO of the Boston Foundation. “These research findings hold out the possibility of pushing back against the seemingly inexorable rise in health care costs.”

To put the potential savings in Boston into perspective, the amount that could be realized from use of the GIC strategy could pay for one of the following:

• Cover the City’s entire projected shortfall for the current fiscal year, or
• Hire 420 new police officers, or
• Create 32,400 additional summer jobs for youth, based on current 3,600 jobs at a cost of $4.6 million, or
• Triple the current budget for Boston Centers for Youth and Families, or
• Double the City’s capital improvements for the schools, which were budgeted at $44.5M last year.

“The growing cost of health care is a job-killer,” said Grogan. “We have union leadership that is reluctant to see changes, but how can they accept a situation that makes municipalities grow steadily weaker and less able to maintain the workforce they need? We need unions to align themselves with the communities they serve.”

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