Passing along the pain
Affordable Care Act hitting town hard
Happy Sequestration Day, newshounds.
As I’m writing this, we still don’t know if our elected “leaders” in Washington have figured out a way to stave off the supposedly Draconian federal budget cuts that will “devastate” services and send several hundred thousand federal employees on unwanted vacations. But here in Greenfield, the town is facing its own mini-fiscal tsunami in the form of health employee insurance rates which are increasing by $31,000 a month starting today.
“We currently have around 900 people covered under our health plan, 461 of which are retirees,” Greenfield Finance Director Lane Kelly told the Town Council this past week. “We’re facing major retirements in the next few years and these are people who are going to have to be replaced.”
Those retirements, however, aren’t the main reason for this latest increase. Greenfield Mayor Bill Martin says the problem can be found in the federal “Affordable Care Act” better known as “Obamacare.”
“We know there will be an additional increase next year and we can’t negotiate those, because they are pass-throughs from the insurance companies to the buyer, which, in this case, is the city,” Martin said.
Isn’t that lovely.
But it’s not all that surprising to everyone, except maybe federal lawmakers, who still seem unable to grasp the concept that when they pass a “reform” that impacts business owners, in this case insurance companies, those business owners find a way to pass it onto consumers, which means everyone pays more for services that often wind up being reduced.
This is just the latest “unintended consequence” of the great federal subsidized health care adventure. The first of what will likely be many punches landed at the start of the calendar year, when a lot of part-time employees were informed that they could no longer exceed 28 hours a week, lest the employer be forced, by federal regulation, to provide them with health care coverage or pay a financial penalty. That means, in the government’s view, the definition of “full-time” employment is 28 hours a week, when it used to be 32.5 hours.
The really hilarious part is that the law doesn’t even go into full effect until next year, but the government is going to begin auditing companies now to ensure that they are in “compliance” with a law that isn’t even on the books.
And then you have the impact on towns like Greenfield, which are getting killed by open market rate increases because its legislative arm of government refuses to accept a section of Massachusetts General Law allowing the town to purchase its benefits through the state’s “Group Insurance Commission,” the agency that purchases them for state employees.
The GIC buy-in provision was passed by the Legislature a few years back in an attempt to help towns save money, but not many have been able to take advantage of it because of pressure from employee unions concerned about possible reductions in benefit choices, reduced coverage, higher co-pays or having to assume a larger percentage of their coverage.
The council instructed Martin and Kelly to go back to the unions and negotiate, which Kelly said did produce some savings, most of which has been eaten up by increases related to the federal changes. The town still offers an 80-20 health care split in the employee’s favor, something Kelly says may have to change radically if the unions and the council continue to dig in on joining the GIC.
“We’re not going to see any savings until we go back to the drawing board and reconsider the decision on health insurance reform,” Kelly said. “It’s either that or work out some kind of dramatic split in the 50-50 range.”
Kelly says she understands that the union membership “doesn’t want to talk” about health care, and, quite frankly, neither does she — but they have to.
“I think the unions are cooperative for the most part, but they have to realize that we have nowhere to go here,” Kelly said. “The citizens aren’t going to accept another $500,000 increase per year because they don’t want to discuss it.”
And Kelly said all of the haggling over health insurance benefits prevents the larger discussion she wants to have about developing a broader benefit package.
“I say let’s start looking at the whole plan, because health insurance is really all they have. I tell them ‘you love this health plan, but you don’t have anything else — no long-term disability, volunteer dental,’ so, at some point, we need to get back to that table, and boy do they hate it, and I don’t blame them ... I don’t like it much either.”
“I don’t pull any punches,” Kelly added. “I tell it the way it is, and I’m not going to sugarcoat or try to make it worse than it is, I just know that it’s bad and getting worse.”
In Washington, they have another word for it.
Chris Collins is the Franklin County News Bureau Chief for WHAI, WPVQ and WHMP Radio. He is a former staff reporter for The Recorder, and is a Greenfield native.