Communities Find Health Cost Savings Through New Law

(Metropolitan Area Planning Council and The Boston Foundation)

A new survey finds that about three-quarters of cities and towns in the region are beginning to save millions of dollars in health insurance costs after a 2011 law that made it easier for communities to change health plans or join with the Group Insurance Commission. According to the new report from the Metropolitan Area Planning Council and The Boston Foundation, 78 of 101 communities have implemented such reforms, or are planning to.

“The new reform law, passed with support of municipal, labor and business leaders and enacted in July 2011 will easily exceed projected savings of $100 million during its first year,” the report says.

Here are some reforms that have led to savings, according to the study:

  • In 2011, Salem adopted the new health insurance reform law and then reached an agreement with its unions to enter the GIC. The agreement is expected to save the city approximately $1.3 million in its first year.
  • In 2011, Somerville adopted Section 21 but ultimately came to an agreement to join the GIC through Section 19 coalition bargaining. The city is expected to save $9 million in the first year of the agreement.
  • In 2011, prompted by the impending passage of the new law, Revere reached a plan design agreement with first-year savings of approximately $1.5 million.

  • In 2012, Chelsea reached a plan design agreement outside of the new law. First-year savings of $1.3 million are expected as a result of the changes.
  • After adopting the new reform law in February 2012, Littleton reached an agreement to make significant plan design changes in March 2012. First-year savings of close to $317,000 are expected.
  • In 2012, after adopting the new law, Framingham reached a plan design agreement with expected first-year savings of almost $3 million.
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