Monday, February 11, 2008

How to save half on town health insurance premium growth

Dr Allen, among his other mostly good recommendations to the school committee last week was for the town to start negotiating for health care insurance differently to save money.

As he alluded to and this article points out the town should consider becoming part of the state insurance pool. According to his cursory examination, the cost of health insurance in the town is up over 100% in the past 5 years, compared with 47% for the state overall.

Here are some ways we could become more efficient and slow the growth as the article points out:

To rein in costs, some communities have united into consortiums to purchase health coverage as a single group. The West Suburban Health Group, established in 1990, has 16 participants, including Natick, Needham, and Wellesley, that use the buying power of the group's 20,000 members to get better rates, said Wellesley's Waldman, the group's chairman.

Municipalities also save money and time by dealing with just a single, central office instead of directly with insurance companies. The group's board sets a single rate annually for each plan offered and then allows each community to decide how they'll split that cost with its employees.

Towns and cities may also be able to save by joining the state's insurance pool, according to the nonprofit Boston Municipal Research Bureau. Over the last six years, the state's health insurance costs have risen 61 percent, while the city of Boston's rose 92 percent, the bureau noted in a report last fall. A draft bill that would allow municipalities to join the state system is before the Legislature.


This brings up a good point and shows the basic inefficiency of trying to do everything on a town-by-town basis. For instance, towns with regional school systems have lower tax rates because they save on common costs of education. Economies of scale in insurance premiums would help bail us out of this fiscal mess we're in and make a higher quality of life possible for the town while spending the same or less for it.

The excuse given by the town in the past that "this will tie up the time of folks at the town hall" too much is not only puzzling it's again a basic frustration point. We need to do better, come out of our comfort zone and examine doing things like pooling resources. If we don't we'll continue the mediocrity in education, services and infrastructure so many are frustrated with now and face large tax increases or cuts in services in the future.

No comments: