EVEN AS Massachusetts should be girding for a fiscal shortfall, state lawmakers can’t bring themselves to take the most obvious step to save cities and towns at least $100 million a year. The new state budget will cut local aid and other programs, further deplete the dwindling rainy day fund, and yield perhaps 1,000 or more layoffs. What the bill won’t do is give cities and towns the power to make cost-cutting changes in their employee health care plans, a power that both the state and most private employers have. Municipal officials need the flexibility to design plans comparable to what the state’s Group Insurance Commission offers, and lawmakers should give it to them quickly — not wait until next year, as legislative leaders seem inclined to do.
The days of the $5 visit to a doctor have all but vanished for private-sector workers, but not in Massachusetts towns where municipal unions have a veto over even the smallest changes in the design of health insurance plans. As a result, spiraling costs for employee health care are crowding out services that directly help taxpayers.
Somerville is an extreme case: The city now devotes 24 percent of its budget to employee health care, up from 9 percent just 10 years ago. Yet the trend across the state is dire. Employee health costs have risen about 150 percent in the last decade, while costs overall have risen by just 25 percent.
Last month, the state Senate adopted a compromise provision that would have given local government power to save on health care costs, but the process would have been cumbersome, and lawmakers were wise to leave it out of the final budget bill. But they’re reluctant to go further. Many legislators hold cities and towns responsible for agreeing to unsustainable health insurance provisions and want municipal officials to work out deals with organized labor.
Yet it’s not clear that union leaders are open to any meaningful compromise. When firefighters in Framingham agreed to pay 13 percent of their health benefits, it was an improvement over the 10 percent they were paying, but a far cry from the private-sector norm of 30 percent or so. Even then, the union chief insists that letting town officials control copays is “too drastic.’’ Not true. As long as cities and towns maintain roughly the same standards as the GIC — generous, by private-sector measures — municipal workers will not suffer. They will receive the same benefits as their state counterparts.
If the Legislature fails to address the excesses of the municipal health system, a ballot initiative is the likely result. The backers won’t be radical antigovernment activists; they’ll be mayors who can’t sustain basic services when an ever-larger portion of local taxes goes toward preserving $5 copays. But it shouldn’t come to that. Struggling cities and towns won’t benefit from a drastic measure that takes effect years in the future. They need relief now.