The Massachusetts Taxpayers Foundation (MTF) has long touted the benefits of municipal plan design, citing the potential for cities and towns to realize combined annual health care savings as high as $100 million. Today, the MTF drove that point home by releasing a community-by-community historical analysis that it says helps quantify “the dramatic impact of municipal health care reform on municipal budgets and jobs.”
Over the last 10 years, while health care costs under the state’s Group Insurance Commission (GIC) increased by an average of 6.4 percent annually, “more than 90 percent” of the state’s 351 cities and towns saw their health insurance costs “grow at much faster rates,” according to the MTF. In preparing its analysis, the MTF reviewed each community’s actual health care spending from FY2001 to FY2010 , then compared those numbers to what each community would have spent had their local health insurance costs increased at the same average rate as the GIC.
How dramatic an impact would such a simple reform have on communities? According to the MTF, if cities and towns had been granted plan design authority in 2001, more than $3 billion in health care cost savings would have been achieved statewide over the last decades, or the equivalent of 6,500 municipal jobs, based on an average salary of $50,000 per job per year. Boston alone would have saved a cumulative $260.1 million, or the equivalent of 520 municipal jobs each year.
The Senate Republican Caucus has historically advocated for changes in the financing of municipal health insurance. Without such changes, MTF President Michael Widmer warns, “cities and towns across the state will suffer irreparable damage as they are forced to lay off more and more teachers, police officers, firefighters, and other local employees who provide critical public services.”
