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My state rep weighs in

On my continuing march against the unreasonably high costs of health care coverage for municipal employees in Massachusetts I reached out to all my elected representatives as well as the Town Manager of Bedford.

Tonight I heard from my state Representative, Charles Murphy.  Murphy is also the Chairman of the Massachusetts House Ways and Means Committee.  His entire response is copied below.  I appreciate that he has been monitoring this issue for some time.

The most important part of his response is the frustration that I sense that the cities and towns are looking to the state to solve a problem by mandate that they can't solve themselves.  Since Bedford has been able to deal with this, I think that all other cities and towns should find a way.  What may be needed is the state setting the standard to let the cities and towns take stronger action, such as adjusting health plans without collective bargaining.  Although a state law would be helpful, it seems like we also need stronger leadership in many of our cities and towns.

Overall, I appreciate the detailed and thoughtful response from Rep. Murphy.  I'm happy to share it with you.  It's also been nice to see that many of my friends are now researching the situation in their own city or town in Massachusetts in order to pressure officials to take action on this matter if they haven't already.

Response from Rep. Murphy:

Dear Mr. Feinstein, Thank you for your email regarding the effects of rising health care costs on municipal budgets.  Hearing the views of my constituents enables me to make more informed decisions, and I appreciate your input regarding this issue. I also read with great interest the two-part Boston Globe report you reference in your email.  While this topic is not new to me, I think the Globe’s in-depth coverage will draw great attention to the issue in the weeks and months ahead.  As State Representative for the 21st Middlesex District, (Burlington, Bedford, and part of Wilmington) and Chair of the House Committee on Ways and Means, I work closely with a great number of local officials who are struggling with budget shortfalls as a result of rising health insurance costs. 

While not insensitive to their plight, I find it telling that cities and towns now look to the legislature for solutions to what most would admit is partially a self-inflicted problem.  I think the second part of the Globe series detailed the escalation of this problem well.  Cities and towns bare much of the responsibility for drastically increasing their premium contribution rates, for agreeing to plans requiring low or, in some cases, no copayments, and allowing some individuals serving very few hours to qualify for health insurance.  While yearly health insurance cost increases are easy to focus upon, I think the report gave some historical perspective as to how we got to this point.

The example used to kick-off the Boston Globe series details a 42-year-old woman, an eight year employee of the City of Everett, receiving health insurance for life because she was terminated by an incoming mayoral administration.  This unusual retirement benefit is allowed by Massachusetts General Laws Chapter 32, Section 10.  Earlier this session the legislature voted to eliminate all elected officials’ ability to collect an enhanced pension under this section, believing that the original intent of the law had been exploited by some individuals over the years.  There have been subsequent discussions of scrapping this law in its entirety.  

Outside of the above provision, retirement benefits for city and town employees should be commensurate with time served.  It takes 10 years to be eligible for a pension, and then the actual pension amount is a function of years served and age at retirement.  As noted in the first Globe story, municipal and state employees cannot qualify for a pension until age 55.  Pension payments for employees who only work 10-15 years are extremely modest, and these payments are even less if the employee is retiring before age 65.  As the Globe series points out, it is not the pension payments alone that weigh on a municipality, but the health care costs that come with it.  One possible way to address this issue would be to raise the number of years an employee must work to qualify for health insurance coverage or a pension.

In your email you also suggest that when an employee leaves municipal service, other than severance benefits, employees should not get continuing health care coverage before retirement age.  While I addressed the health benefits and retirement in the two paragraphs above, I should also note that public employees do not receive any sort of severance package when dismissed from service, regardless of years served or reason for dismissal.

To your final point, about requiring municipalities to enroll all retirees in Medicare, the legislature granted towns this ability in 1991.  I only wish the Globe piece had asked each of the local officials spotlighted in the report why their communities had not yet moved their retirees to Medicare.  I think an honest answer would have been reveling.  Presently cities and towns already have this ability; they seem to lack the desire to achieve these savings, therefore a statewide solution may be necessary to accomplish this initiative.

Again, those of us in the legislature are not insensitive to the plight of local municipalities, regardless of whether or not they contributed to their present situation through past actions.  Over the past year, the House and Senate convened a municipal relief working group to examine ways to aid communities during this financial downturn.  The commission issued a report, the recommendations of which were recently reported favorably by the Joint Committee on Municipalities.  In a similar regard, the House appointed a special committee of members to look at ways to reform the pension system in Massachusetts.  The findings of this report were the basis of a pension reform bill passed earlier this year, and could spawn further legislation this session.  Given the economic times that we now find ourselves, I think government at all levels should be looking for new and innovative ways to deliver necessary services.  Please know that I will continue to work with our local officials to find solutions to the issues raised in your email.  Ensuring that both our state and local governments are good stewards of the taxpayers’ money is necessary in the best of times; this need is only amplified during times like these.

I greatly appreciate your informed opinions and well thought out input on this subject.  Thank you again for taking the time to reach out to me.  If you need any further information or assistance, please contact my office at 617-722-2990.

Kindest regards,

Charles A. Murphy
Chairman
House Committee on Ways and Means

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