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Beverly's new muni health plan goes into effect

Posted by Justin Rice  April 2, 2012 11:30 AM

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The first phase of Beverly’s new municipal health insurance plan that is expected to save $1.2 million went into effect on Sunday, putting the city on the path toward sustainability, according to Mayor William F. Scanlon, Jr.

“I think we are a significant step closer to sustainability than we had been,” Scanlon said during a telephone interview Monday morning. “I think we got the good feeling several months ago when we completed the deal, but it’s a very important step.

“We had gone from spending 7 cents out of every dollar on health care when I first got here to spending 17 cents on every dollar.  That 10 cents had to be taken from other things, it had been taking from maintenance, condition of streets and sidewalks, and from our number of employees.”

The Health Insurance Reform Act, which Gov. Deval Patrick signed on July 12 last year in an effort to curb health insurance costs, gave Scanlon the power to negotiate a health plan for current and retired city workers.

In January, Scanlon and the unions reached a deal on reforming the city’s health plan rather than entering the Group Insurance Commission, or GIC, which was also an option for reform under the new law.

At the time, the unions decried the agreement, saying the new law tied their hands at the negotiation table.

While the new plan’s copays went into effect this week, the new deductibles will not go into effect until July 1, Scanlon said, because it doesn't make sense to prorate them for the final three months of the fiscal year.

Under the old health plan, the city spent 17 percent of its budget, or $17 million, on health care costs.

Under the new plan, the city will continue to pay 80 percent of premiums, but employees will have to pay deductibles and copays from $25 to $45 for a trip to the doctor that they didn't under the old health plan.

Scanlon said the HMO Blue family plan has actually gone down for employees from$373.49 to $344.26.

The city held multiple sessions and sent out letters to its employees to outline the changes.

“We’ve been talking about this for a very long time, what we’ve done here is to focus on planned decisions, we did not join the GIC, we mirrored it,” Scanlon said. “Nobody has to see a different doctor or go to a different hospital and they also get a cut in their rates effective [Sunday] but the heavy users, they will pay more than they have in the past.”

Scanlon said the fact that they didn’t join the GIC made the transition run slightly more smoothly.

“Joining the GIC has a lot of administration associated with it, this did not have that much because it was largely a case of changing rates and copays etc. etc.,” he said. “The employees appreciate the fact that we took a approach that allowed them keep hospitals and doctors. I even got a couple thank you notes.”

Justin A. Rice can be reached at

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