Since joining the GIC in January 2007, the City of Springfield has saved millions of dollars, according to a report commissioned by The Edward J. Collins, Jr. Center for Public Management at UMass Boston's McCormack Graduate School of Public Policy Studies and the Rappaport Institute for Greater Boston at Harvard's Kennedy School of Government. The study, titled "Controlling the Cost of Municipal Health Insurance: Lessons from Springfield" found the following for Springfield:
- Cut its health care cost increases $14 to $18 million over two years;
- Saved an additional $5 million per year by requiring eligible retirees to enroll in Medicare Part B in order to receive Medicare supplemental health coverage through the city; and
- Will save between $56 million and $82 million from 2008 to 2012 if the GIC's historic eight percent average annual increases in health insurance premiums continue compared to past increases in Springfield.
The report offers suggestions for cash-strapped localities to reduce their health insurance costs, whether or not they decide to join the GIC. It states that many Massachusetts communities could achieve significant health insurance cost reductions by adopting Section 18 of MGL Chapter 32B, requiring eligible retirees to enroll in Medicare. In Springfield, many members selected lower-cost HMOs and select network plans, which significantly contributed to the savings but the report cautions that these same shifts might not occur in every municipality. The GIC's strict eligibility rules significantly contributed to the savings, with a 5% reduction in the number of employees and retirees covered by Springfield's health benefits, saving an estimated $1.1 million for the city. Municipalities that verify employee eligibility and documentation for covered spouses and dependents, similar to the GIC's requirements, could reap potential savings according to the report.
For a complete copy of this report, authored by Robert L. Carey and released May 2009, see the Research Centers and Initiatives - Center for Public Management section of the McCormack Institute's website.
This information provided by the Group Insurance Commission.
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