Hale workers, sick cities

MUNICIPAL UNIONS should raise a holiday toast to gullible Massachusetts taxpayers for their willingness to absorb disproportionate pain from increases in health insurance costs. Bostonians, for example, sit by passively while city workers, who pay just 10 percent of premium costs for their HMO coverage, gobble up nearly half of the annual increase in the city's operating budget.

The nonprofit Boston Municipal Research Bureau warns in a report published today that "Boston cannot maintain its reputation as a competitive place to live, work, and invest" if city employees don't do their share to lower healthcare costs. Health insurance spending by the city, estimated at $235 million for the current fiscal year, has jumped 92 percent over the past six years. The report notes that it requires the annual property taxes from five average homeowners in Boston to pay the roughly $14,000 needed to cover one city worker's family plan.

The cost of healthcare is the tapeworm of municipal finance, and it needs immediate attention. Luckily, the best fix is also the most obvious. By placing municipal employees under the same Group Insurance Commission that manages employee and retiree health benefits for state workers, good healthcare could be offered for substantially less cost. State spending for health insurance rose only two-thirds as rapidly as Boston's, due to aggressive actions on the part of the autonomous commission. While municipal officials wring their hands, the commission cuts deals for less costly mail-order drugs and provides incentives, such as lower co-payments, to state employees who choose from a list of doctors known for providing cost-effective care. The commission is still able to provide more health plan choices than most municipalities. And with the state kicking in a more reasonable 80 or 85 percent of premium costs -- still far higher than the private sector, coverage remains affordable for workers.

It's time for this sensible state plan to come to a city or town near you. Proposed legislation from a coalition of government and union officials is a decent step. It would provide a local option for communities seeking to join the Group Insurance Commission. Instead of bargaining with individual unions, a municipality could negotiate with all town workers collectively. Agreements would be binding on all employees. But real reform would eliminate the potential left in the draft bill for union representatives to scuttle the plan. If taxpayers are serious about bringing down the healthcare costs in their communities, they should follow the state model and allow cities and towns to place their workers in the commission free of any bargaining restrictions.

Municipal workers deserve good, affordable health care coverage. But not at costs that sicken their cities.