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Read MorePosted on April 5, 2011
Financially strapped cities and towns in Massachusetts spend 37 percent more to provide health insurance to their employees than the amount spent by private companies as measured by the AIM Benefits Survey, according to a report released this morning.
The report by The Boston Foundation and the Massachusetts Taxpayers Foundation, entitled Municipal Health Plans: Gilded Benefits from a Bygone Era, concludes that municipalities face a deepening financial crisis because of generous health insurance benefits under which employees pay minimal co-payments or deductibles. The result: some cities and towns face significant layoffs because they must use more than 20 percent of their budgets to buy health insurance for employees and retirees.
The study urges state lawmakers to support moves to allow municipal officials to negotiate health insurance plan design outside of collective bargaining. AIM has filed a bill that would permit those negotiations, while Governor Deval Patrick and other have filed slightly different reform proposals.
“Employers care about municipal health care costs because the more money that cities and towns must spend on health premiums, the less they spend on schools, public safety, roads, bridges and other services that impact the Massachusetts economy,” said John Regan, Executive Vice President of Government Affairs at AIM.
The new report compares health insurance benefits in 14 Massachusetts municipalities with two plans offered to state employees, the Federal Employees Health Benefit Plan and statistics on private coverage taken from the 2010 AIM Benefits report, Trends and Practices Among Massachusetts Employers. Among the comparisons: