A bill coming due

To appreciate what is happening to healthcare costs, consider this amazing number: $2,228,099.

That is what it will cost the City of Boston, on average, for health insurance alone for a single employee, say a cop or a teacher, over a lifetime, according to Segal Co., the city's actuarial consultant. That is $2.2 million per employee on a city payroll that currently has 16,400 employees and another 12,600 retirees and their dependents.

The city, of course, isn't alone in grappling with how to pay for the medical miracles our system routinely produces on a daily basis. We are now facing a seventh-consecutive year of double-digit rate increases in Massachusetts. And it is that kind of escalation, year after year, that eventually produces an insurance bill for a cop or a teacher or a clerk of $2.2 million.

Segal Co. got to that number by analyzing the cost for a city employee (a man) who was hired last year and retires after 30 years and then receives retiree benefits for another 30 years until he is 85. The estimate does not even include the cost of any dependents, or the employee's own contribution to the costs, or Medicare.

This can't continue. Consider: Over the last six years Boston's health insurance spending has increased by 92 percent, or 11 percent a year on average. All other spending is up by 18 percent, or just 3 percent a year. The Boston Municipal Research Bureau, an independent watchdog group, notes it takes five single-family taxpayers to pay the city's share of one city employee's average family health insurance premium.

Taxpayers in every city and town in the Commonwealth are paying more and getting less because the price of healthcare is crowding out everything else.

It gets worse. New accounting rules are forcing state and local governments to disclose the real cost of providing benefits -- largely healthcare -- to retirees. The new rules do not require governments to fund the liability, only disclose it. Over time, however, the light of day will force governments to do something or face the consequences from the credit rating agencies.

In June, the state pegged its shortfall at $13.3 billion, a scary number. Now a new estimate puts Boston's obligation under the new accounting rules at $5.2 billion, another scary number. To put that in context, the city last year paid $78 million for healthcare benefits for its retirees. To fund the entire $5.2 billion on an annual basis -- something that is not about to happen -- would more than triple the city's retiree healthcare cost to $286 million a year.

More for retirees means less for everyone else, higher taxes, or both. The huge rising costs are going to force a meaningful restructuring of health insurance in cities and towns. The numbers are just too compelling.

One place to begin is allowing cities and towns to join the state system, which has been far more successful in holding down costs by taking the insurance plans off the negotiating table and turning them over to the state Group Insurance Commission. The state system works well for state employees, and there is no reason it won't for municipal employees, too. The state also needs to treat the retiree insurance sinkhole as it did pension reform in the late 1980s, allowing municipalities to fund their obligations on a 30-year schedule, which will cut the long-term costs in half.

Any company, any individual, paying an insurance premium is feeling the same pressure. Ultimately the problem is double-digit healthcare increases year after year. It is not a sustainable model.

Steve Bailey is a Globe columnist. He can be reached at bailey@globe.com or at 617-929-2902.