Bargaining healthcare 2012


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Bargaining healthcare 2012

  1. 1. Bargaining Options
  2. 2. The cost of receiving care in Massachusetts is the highest in the country! Government Response: ◦ Legislative reforms focusing on shifting cost to plan subscribers Carrier Response: ◦ More aggressive provider negotiations ◦ Consumer driven plans ◦ New plans with smaller, more focused networks Employer Response: ◦ Shifting cost with higher premium splits ◦ Raising copays and deductibles ◦ Reducing or eliminating retiree plans Plan users are often left out the problem-solving equation, but they too are stakeholders!
  3. 3.  Average Single Premium 1999 = $2,196 Average Single Premium 2010 = $5,049 11 Year Increase = 129.9% Average Family Premium 1999 = $5,791 Average Family Premium 2010 = $13,770 11 Year Increase = 137.8% 11 Year CPI Increase = 31%Sources: Kaiser Family Foundation; Bureau of Labor Statistics
  4. 4.  January 2001 to December 2010 ◦ All Workers - Wage Growth = 28.8% ◦ State & Local - Wage Growth = 29.9% ◦ All Workers - Benefit Growth = 41.8% ◦ State & Local - Benefit Growth = 60.8%Source: Bureau of Labor Statistics, Employment Cost Index, March 2011
  5. 5. ◦ Demand for health care services remains high, and will remain high as population ages◦ Continued growth, development and utilization of new [and expensive] medical technologies, including pharmaceuticals◦ Price for medical services continues to rise much faster than the price for other goods and services◦ Massachusetts economy largely driven by the healthcare and bio-tech industry
  6. 6.  Section of General Laws that provide for public employee and retiree benefits ◦ Establishes premium benchmarks ◦ Determines plan types that must be offered: HMO, PPO, Indemnity ◦ Provides alternative bargaining options  Section 19, GIC, Municipal Reform Act ◦ Mandates Medicare for eligible retirees ◦ Affirms the obligation to negotiate benefits for active employees
  7. 7. Four Models to Negotiate Health Insurance Traditional 150E bargaining Informal Coalition Bargaining MGL 32B, Section 19, Formal Coalition Bargaining MGL 32B, Sections 21-23, Municipal Health Insurance Reform
  8. 8.  Negotiations take place during individual unit negotiations Plan Design and Contributions MGL 32B allows: ◦ HMO – Units can negotiate different contributions and plan design ◦ Indemnity – 100% of employers bargaining units must agree to any changes (design / contributions) before changes can be implemented Healthcare is part of overall compensation package negotiated and written into CBA’s
  9. 9.  Form of interest-based bargaining ◦ Recognition that collaborative problem solving is needed Stakeholders ◦ Management ◦ Representatives of each bargaining unit and retirees Parties work cooperatively to reach on agreement on healthcare changes Terms of any agreement are drafted into a detailed M.O.A. that is recognized by 150E Signed by management and unions Incorporated into the body of individual CBA’s to make binding Expedites the bargaining process Coalition dissolves at the conclusion of an agreement
  10. 10.  Formal form of Coalition Bargaining Replaces traditional bargaining with a Public Employee Committee (PEC) ◦ One representative from each bargaining Unit ◦ Retiree ◦ Voting is weighted based on eligible pool per unit ◦ 10% guaranteed vote Bargains a comprehensive agreement covering all employees/retirees Modified in 2007 to provide for bargaining into the GIC PEC agreements replace existing CBA language on employee benefits Used successfully in over Fifty cities, towns, and regional school districts ◦ Has lowered costs by formalizing the partnership between stakeholders (employer / employees) ◦ Provides streamlined negotiations by bargaining with PEC rather than individually ◦ Engages employees to understand costs, drivers, and necessity for change
  11. 11.  Municipal Insurance Reform Act Two new options under MGL 32B ◦ Section 22 – Mandates Copays / Deductibles benchmarked against commonwealth’s GIC ◦ Section 23 – Mandates everyone to GIC health plans after satisfying specific cost savings benchmark ◦ Limits collective bargaining compared to current system to a 30-day window of time ◦ Law allows public employers to lower their costs and shift them the plan user ◦ Complicated implementation regulations ◦ Disengages employer / employees as equal stakeholders