Massachusetts cities and towns face huge long-term health care financing challenges, thanks to ill-considered policies that allowed health insurance benefits for unionized jobs such as firefighters and teachers to get totally out of control. The legislature is finally taking some modest steps to let the municipalities control costs somewhat by moving into the very successful program run by the Group Insurance Commission (GIC). Unions have fought related reforms bitterly in the past but are now starting to relent, according to recent Boston Globe articles such as this one.
That’s a savvy move on their part. First, citizens of the Commonwealth are slowly starting to wake up to the fact that health care benefits for public employees and retirees are substantially more generous than those in the private sector. Second, moving to a GIC plan can keep benefits generous while controlling costs. Third, we’re already at the point where health care costs are crowding out spending on vital services such as education, and it won’t be long before the backlash begins.
No doubt some of the anti public union rhetoric from Wisconsin is encouraging the unions to be more flexible. Massachusetts is not on the verge of following the Wisconsin path, but the unions are smart to be conciliatory.May 25, 2011