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Globe Editorial

DeLeo’s plan to save on cities’ health costs has courage, vision

April 21, 2011

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EMBRACING COMMON sense in state government shouldn’t require unusual political courage. But as cities and towns across Massachusetts creak under the weight of their employees’ health care costs, House Speaker Robert DeLeo and House Ways and Means Chairman Brian Dempsey have incurred the wrath of powerful unions by proposing a straightforward way to help local governments bring those costs under control. Under their House budget plan, municipal officials would have the power to alter the terms of health insurance coverage without having to negotiate each provision with unions.

The long-overdue change goes well beyond a fuzzier plan by Governor Patrick that calls for further negotiations between towns and local unions, and it’s far superior to a union-backed plan that raises the prospect of binding arbitration. The $100 million a year the House plan will save would greatly assist municipal governments in preventing layoffs, keeping parks and libraries open, and preserving education programs. The House plan would ease the adjustment for local employees by allowing cities and towns to use 10 percent of the first year’s savings to pay for health-related expenses. But ultimately, local workers would be under the same rules as state employees — who still enjoy more extensive health benefits than comparable private workers.

A recent report by the Massachusetts Taxpayers Foundation and the Boston Foundation concluded that the average family premium for city and town employees is 37 percent higher than the typical private-sector policy and 21 percent higher than that of state employees.

Local taxpayers can’t keep absorbing huge increases in health premiums. But when each provision is subject to negotiation, it’s extraordinarily difficult to reduce costs as private employers might — for instance, by switching to a $20 primary-care copay from the current municipal average of $11. Nor can cities and towns easily enroll their employees in the Group Insurance Commission, which offers high-quality coverage for state employees at a reasonable price.

Current law allows cities and towns to join the state insurance plan, but unions have a veto. So while some communities have reaped savings — DeLeo’s hometown of Winthrop, for instance, is saving $800,000 or more a year — few others have been able to follow suit.

Opponents of the House proposal have linked it to Wisconsin’s effort to strip public-employee unions of all collective bargaining rights. But it’s nothing of the sort. Labor and management would still bargain over what portion of the overall premium taxpayers would have to cover — leaving unions significant influence over the health care costs their members will bear.

What else, exactly, are cities and towns supposed to do? Federal stimulus money is drying up. And as the economy remains weak, and as private-sector workers endure stagnant wages and higher health care costs, it’s unthinkable to raise taxes to cover rising municipal health care costs. DeLeo and Dempsey have advanced a fair way to avoid local layoffs and service cuts, and lawmakers ought to pass it.