Municipal Health Changes In House Budget Plan Cause Divide

In the Massachusetts House's $30.4 billion budget plan released Wednesday, the major policy change is aimed at saving cities and towns $100 million in health care costs.

Under the change, city and town leaders would decide what insurance plans would include and how much employees would pay in co-payments and deductibles — without input from unions. With the proposal, House leaders are siding with municipal and business groups and angering many unions.

The House plan comes amid increasing frustration that municipal workers have among the most generous health insurance plans at at time when cities and towns are closing fire stations, libraries and senior centers and laying off teachers. Ways and Means Assistant Committee Vice Chair Marty Walz says she's tired of seeing all the increases in education funding over the years get absorbed by rising health insurance costs.

"If you talk to parents across the state, their interest is making sure that we're investing in what's going on inside the classroom, where because of the cost of health insurance, our investments have been going to expenses outside the classroom," Walz said. "In the end, this is going to be challenging, no question about it."

“If we continue with the plans we have now, then we’ll be laying union members off to pay for them."

New Bedford Mayor Scott Lang

In the hallway outside the hearing room, union leaders started to mount their challenge to the plan.

"To say that we're affecting children's education in Massachusetts because we get health insurance from our employers, I think that's a misrepresentation of the facts," said Ray McGrath, of the International Brotherhood of Police Officers.

McGrath took issue with Waltz in particular.

"I want her to remember that we are the... teachers who go into the classrooms, we are not the problem," he said.

McGrath says union members are ready to work with municipal leaders to lower health care costs, but municipal leaders say it's been very difficult to get unions to agree to increase their co-payments and deductibles, changes that can reduce the cost of health insurance premiums. Under the House proposal, cities and towns could raise out-of-pocket expenses, but no higher than those paid by state workers. Unions would continue to bargain the share of insurance premiums that employees pay.

"I think it's something that people will be relieved to see," said Scott Lang, New Bedford's mayor and president of the Massachusetts Mayors Association. "If we continue with the plans we have now, then we'll be laying union members off to pay for them, and I think that's something that's untenable."

But the House proposal itself may be untenable or at least a hard sell to Gov. Deval Patrick and Senate President Therese Murray. She said at a Greater Boston Chamber of Commerce event last week that she will not agree to take the right of unions to bargain their health plan benefits away.

"I emphatically agree with the governor that labor has to be at the table, that they have to be part of the solution," Murray said.

But unions acknowledge that it will be difficult for House and Senate members to vote against this municipal health care change because it is part of the budget and the budget as a whole has broad support. In addition, House leaders say the savings from shifting costs to municipal workers — savings in the range of $100 million — will offset the budget's $65 million cut in local aid.

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