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Globe Editorial

Unions’ plan on health costs offers way too little, too late

March 9, 2011

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THE PROPOSAL by public-employee unions in Massachusetts to reduce health insurance costs for cities and towns may be a good-faith gesture, but it doesn’t go nearly far enough. Half measures can’t control soaring medical costs for public employees, which threaten to degrade basic municipal services for taxpayers across the state.

In a tacit acknowledgment that municipal health costs have become unsustainable, leaders from education, public safety, and other unions proposed Monday to give employees 45 days to bargain changes to their health plans with city and town managers. If an agreement can’t be reached, a third party would decide if the employees would be required to join the lower-cost Group Insurance Commission for state workers or accept changes proposed by managers. Estimated savings of $120 million would be split evenly between the municipalities and the public employees, according to the proposal. The unions also want labor to have 50 percent of the seats on the board of the Group Insurance Commission, which approves cost-saving measures such as higher employee copayments and limited network plans.

This proposal would be a step backwards at a time when even Governor Patrick, a hold-out union supporter, is vowing to make it easier for cities and towns to put workers into the state plan without any bargaining at all; the union proposal would not only guarantee further wrangling, but would give unions new clout to block changes within the Group Insurance Commission and then deprive cities and towns of half of the savings.

Municipalities are facing their fourth straight year of local aid cuts from the state. Health insurance costs for cities and towns have risen by 150 percent over the last decade compared with 30 percent for other municipal costs, according to the nonprofit Massachusetts Municipal Association. Not only do the health care benefits of public workers outstrip those of private-sector workers, but the same private employees are losing out when municipal managers are forced to cut back on basic police, fire, and library service to pay for bloated benefits.

State workers receive generous health care benefits that largely aren’t subject to collective bargaining or outside arbitration. And when the state workers’ Group Insurance Commission finds ways to reduce costs, all of the savings accrue to the state. That’s what city managers and taxpayers are asking for at the local level. It’s a reasonable request. Municipal workers deserve coverage that’s no better or worse than their state counterparts enjoy.

The union proposal would make such savings more difficult. As presently constituted, the Group Insurance Commission does an excellent job of adjusting benefits to save costs without drastic cuts. Adding more union representatives to the board would upset that balance. Meanwhile, introducing binding arbitration into the bargaining process would slow the pace of change. Arbitration awards are often based on past practices and expectations; what’s needed now is a fresh willingness to grapple with fiscal reality.

The unions’ willingness to accept contract changes is a welcome first step. But many more are needed to help cities and towns emerge from the fiscal morass.