, Salem, MA

June 14, 2012

Our view: New health plan a good deal for Peabody taxpayers

Peabody's Ted Bettencourt appears to have passed his first major test as a municipal chief executive by reaching a deal with city unions to have their members obtain health insurance through the state Group Insurance Commission.

The agreement was signed without the acrimony seen in some other communities and, by Bettencourt's reckoning, will save city taxpayers between $3 million and $5 million a year.

The deal also signals a welcome recognition by the unions that it is their best interest to partner with the administration in achieving those savings. By helping the city save money, they may well avoid job cuts and be able to maintain the salaries and benefits to which their members have become accustomed.

As a city councilor, Bettencourt was among the first to express support for the adoption of state legislation that could have mandated a switch to the GIC. The move was a bold one given the number of friends, family members and political supporters he has among the union rank-and-file.

But after moving into the corner office last January, Bettencourt chose not to use that cudgel, choosing instead to reason with the unions that understood they would serve their members better by accepting some of the incentives being offered to make the change from the current health insurance plan to the state's.

The larger state plan has experienced a much lower rate of premium increases than those purchased by cities and towns on their own. And the benefits, as noted by several Peabody union leaders interviewed this week, are comparable.

According to Bettencourt, all that's needed now to make the change effective is Gov. Deval Patrick's signature on legislation currently before him.

The Massachusetts Taxpayers Foundation, which spearheaded the effort to give municipalities more leverage in their efforts to reduce health insurance costs, reported last month, "Implementation of the 2011 municipal health reform law is vastly surpassing expectations, as 102 Massachusetts communities have negotiated agreements with employees that will generate $117 million in first-year savings. ... The original first-year savings estimate of $100 million statewide will be dwarfed as more communities implement changes throughout 2012."

We hope the City Council goes along with the deal and the governor signs the bill so Peabody taxpayers can immediately start seeing some of the savings other communities have experienced through modification of their health insurance plans.