Municipal health reform yields huge savings

A million dollars goes a long way in a small city like Haverhill, and when officials announced this spring that the city had reached an agreement with its unions to save $1.1 million by moving employees and retirees into a cheaper health plan, it was a big victory for a municipality that had been forced to cut back services and furlough workers to pay for skyrocketing insurance costs.

Stories like Haverhill’s have played out in dozens of towns across Massachusetts over the last year, thanks to municipal health insurance reforms pushed by House Speaker Robert DeLeo and signed by Governor Patrick. The legislation, which allows cities to move workers to lower-cost plans without union approval, has been even more successful than predicted. Towns and cities have saved $175 million, exceeding the $100 million once projected. Nor are workers getting a bad shake: The new plans are required to be comparable to coverage offered state workers. For instance, in Haverhill worker contribution to premiums rose from 20 to 25 or 30 percent, and co-pays went from $5 to $15 for doctor’s visits.

The savings underscore the waste in the old system, and the wisdom of the reform. Every dollar saved by cities and towns bolsters their ability to repair buildings, provide community services, and avoid layoffs. DeLeo and Patrick, both of whom came under pressure from labor leaders not to support the measure, deserve credit for giving municipalities such an effective tool.