MUNI OFFICIALS SAY UNION HEALTH PLAN LIGHT ON REFORM, RELIEF
STATE HOUSE, BOSTON, MARCH 7, 2011…. Municipal officials on Monday panned a health care reform "compromise" from union leaders, who said they would be willing to make concessions on benefits this year as long as collective bargaining rights were preserved and workers could share equally in any savings achieved through restructured health plans.
The plan, offered by leaders of the state’s largest public employee unions, marked the first concrete proposal from organized labor to cut health care costs that are crippling municipal budgets statewide. The unions said they would agree to cut $120 million in spending on health care for municipal employees in exchange for half of those savings being poured back into health benefits for employees, such as health reimbursement accounts.
The unions, for the first time, also publicly endorsed the governor’s proposal to force all municipal retirees into Medicare, an option already available to cities and towns but one that hasn’t universally been adopted.
“We understand the strain on municipal budgets and are prepared unequivocally to provide savings to municipal governments,” said Robert Haynes, president of the Massachusetts AFL-CIO, joined by leaders of the Massachusetts Teachers Association, the American Federation of Teachers, the Professional Firefighters of Massachusetts and others.
The Massachusetts Municipal Association immediately said the insistence of unions on splitting the savings defeats the purpose of municipal health care reform. The MMA has offered its own plan design legislation that would remove health coverage from collective bargaining as long as municipal managers don’t cut benefits deeper than what is offered through the state.
“There really isn’t much new there. It’s pretty much a repackaged framework from over the past couple of years. There really isn’t much in terms of lasting reform and taxpayer relief,” said Geoffrey Beckwith, executive director of the Massachusetts Municipal Association.
The State House rollout of the proposal served to set parameters on the debate scheduled to formally resume on Beacon Hill Tuesday when the Legislature hosts a hearing on Gov. Deval Patrick’s proposal to achieve cost reductions by forcing unions and communities to negotiate immediately for savings or join the state’s Group Insurance Commission.
The unions, representing teachers, firefighters, police and other employees, said there plan would save $120 million, the same figure being sought by Patrick and the MMA, without eroding collective bargaining rights.
The plan agrees to a 45-day window for expedited coalition bargaining, like the governor’s bill, toward a benchmark for savings on health care premiums with higher co-pays, deductibles, or other changes. Those benchmarks have not yet been established, but the governor has proposed using the GIC as a threshold for cost.
If unions and management could not agree, an independent third-party could decide whether local employees must join one of the state’s group health insurance plans or set the framework for a local plan to achieve similar savings.
Unlike Patrick’s plan which does call for some sharing of the savings with employees, the unions are calling for 50 percent, or $60 million, to be put back toward other health benefits for employees in the first year. In the second and third years of the agreement, the cities and towns would be allowed to retain all the health care premium relief.
Ann Clarke, executive director of the Massachusetts Teachers Association, said the proposal was “very much in line with what the governor has laid out,” but said the union plan was “more fleshed out.”
Union leaders said they hoped the altered process would be a one-time compromise, and unions and municipal managers would go back to bargaining health care under traditional coalition bargaining rules when the new contracts expire. The unions also called for labor representation on the state Group Insurance Commission to be increased to 50 percent of the governing board, giving them enhanced power at the state bargaining table.
Paul Toner, president of the Massachusetts Teachers Association, said aggressive efforts to limit GIC cost increases by the state have “negatively impacted many employees most in need of treatment.” The state last week announced that GIC plan premiums would increase on average 2.4 percent, far below average increases at the municipal level.
Beckwith said the proposal only strengthens the unions’ position at the bargaining table by forcing communities to adopt “coalition bargaining” rather than negotiate with each individual employee union, and potentially puts millions of taxpayer dollars in the hands of an “unaccountable” arbiter.
“The real problem is we don’t have parity between state and local government,” Beckwith said. “The solution isn’t to take the relief communities could get and direct it to other benefits. That’s not a model the state has used, so the framework would not provide the kind of savings and taxpayer relief that’s needed.”
House Speaker Robert DeLeo said he had not yet read the unions’ plan or familiarized himself with the details, but called it “a good sign they have come out and decided it is an issue that has to be tackled.” The Speaker has come out in support of moving communities to the state’s Group Insurance Commission without collective bargaining.
“At the end of the day, I want to see savings. I want to see real savings and I want to see our cities and towns be able to have the opportunity to make sure that they can provide adequate police, adequate fire, adequate teachers, and adequate DPW workers. As long as that is part of the proposal, that is just fine,” DeLeo said.
The Patrick administration thanked union leaders for their offer to be a partner in efforts to cut health care costs for cash-strapped municipalities.
"We appreciate the unions' willingness to work with us in delivering cost-savings to cities and towns that will help preserve critical services to residents across the Commonwealth. Governor Patrick has made health care cost-containment a top priority and we look forward to hearing further details of this proposal and again working with public employee unions to tackle the important issues facing Massachusetts,” Secretary of Administration and Finance Jay Gonzalez said.
The union’s proposal is not unlike a Senate plan, adopted as a budget amendment last May but dropped in talks with the House, that would have provided for coalition bargaining and binding arbitration to achieve savings in municipal health care by negotiating plans of equal or greater savings than the GIC.
The Senate’s plan called for cities and towns to retain 25 percent of the savings, employees to share in another 25 percent, and for the remaining 50 percent of cost savings to be negotiated.
“At the end of the day there’s a recognition that there’s a crisis that has to be dealt with and that’s a positive, but I think we’re still very far apart in terms the expectations and the details,” said Joel Barrera, of the Metropolitan Planning Commission, which supports plan design and the unilateral authority for managers to join the GIC.
“I don’t detect any major restructuring of the conversation that we’ve been having,” Barrera said.
“Unions are not the problem in our economy, or our government,” Haynes said, acknowledging that public employees might be “convenient targets” but have already “sacrificed significantly” during the recession with wages freezes, furloughs and other benefit concessions.