More join state plan on health
Stoneham, schools seek cost savings
Nine communities and other municipal groups, including some in this area, have decided to join the state group health insurance plan this month, bringing to 23 the number that have taken the option in the two years since it was permitted.
Several local officials said they believe the plan will save their communities and their employees money, give them more choices for healthcare providers, and reduce unpredictability in costs.
"I think it's a good move," said David Ragucci, town administrator in Stoneham, which has enrolled. "It's a good move for the town. It starts to address the structural deficit we're struggling with in Stoneham. It doesn't solve all our financial problems, but it's a big step in the right direction."
But some officials took a less upbeat view of the possibility of saving money with the plan. In Woburn, for example, employee unions and the city mayor had major reservations about it and did not sign up.
Woburn Mayor Thomas L. McLaughlin said he has asked area lawmakers to try to rejigger the plan when the Legislature comes back into session in January. "For all intents and purposes, it takes away the discretion of cities and towns to be able to negotiate," said McLaughlin, who says he wants more flexibility in joining or quitting the program. "Once you enter into it, it's very difficult to get out of it."
Local officials everywhere have been trying to curb the escalating cost of health care for employees, which remains one of the top dollar items on municipal budgets, and growing every year.
Last year, state lawmakers voted to open up entry into the 294,000-member state health insurance program. Recently, in the northwest suburbs, Stoneham, Groton-Dunstable Regional Schools, and the Lowell Community Charter Public School decided to take advantage of the program.
Ragucci said employee unions in Stoneham saw many advantages to the plan. Instead of one option for a health insurance carrier, municipal and school employees will be able to choose among 10.
The average employee now pays 20 percent of the cost of healthcare. That contribution will drop to 15 percent when the plan kicks in on July 1, 2009, saving the employee about $150 per month, he said.
There is also added stability in joining a large program. Ragucci said that with the economy of scale in the state plan, rates are not likely to jump around as much as they have under plans covering just a relatively small community like Stoneham.
Meanwhile, the town will save $600,000 to $700,000 out of a total health insurance budget of about $6 million - money that is "desperately needed," Ragucci said.
Stoneham voters turned down a Proposition 2 1/2 tax-levy override last year, and this year had to trim budgets; the health-insurance initiative comes as the town looks ahead to the possibility of layoffs next year, he said.
But Stoneham officials conceded the plan also has drawbacks, with employees looking at more out-of-pocket expenses in co-payments and deductibles.
Stoneham school Superintendent Les Olson said the idea was not exactly a hard sell to the unions, but took intense negotiations that lasted until Sept. 23 - seven days before the Oct. 1 deadline for signing up.
"It was not a foregone conclusion by any stretch," Olson said.
Woburn's McLaughlin said while he invited municipal unions to discuss the plan, they turned it down flat. He said he also has qualms about it, particularly the provision that requires communities to sign a contract for three years or more to be enrolled in the plan. 