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Aldermen Approve Plan to Join GIC Health Care System

The move is expected to save the city millions, but some workers and retirees feel they're victims.

The Somerville Board of Aldermen voted Thursday night to join the state's Group Insurance Commission, a quasi-independent health care agency that manages health care for state employees and employees in some cities and towns.

Doing so will save the city millions each year in health care costs.

"The savings hits you right in the face. It is significant," said Joseph Curtatone, mayor of Somerville, speaking Thursday night to the aldermen.

However, many employees and retirees, who packed the aldermen's chambers Thursday night, fear the switch to the GIC system could make health care more complicated and expensive for them.

Savings
A new state law passed this summer makes it easier for cities and towns to move employees and retirees into the state's GIC health care system without getting approval from unions.

In the first year of switching to GIC, Somerville will save $9.3 million, according to a presentation delivered by Curtatone. 

With GIC, by the year 2017, Somerville will spend about $15.9 million less on health care than it would if it maintained its current health care plans, according to the presentation. Over the next six years, the city would achieve a cumulative savings of $75 million.

Earlier this summer, the city struggled to close a $4.5 million budget gap. It did so by increasing fees, fines and ticketing and by laying off three workers in the traffic and parking department, among other measures.

If the city didn't join GIC, future years would see cuts in "programs, personnel and critical services," the mayor said. "We need fiscal relief."

Concerns about switching plans
Employees and, in particular, retired city workers, packed city hall Thursday night to follow the proceedings.

Many were concerned a switch to the GIC health care system could impact their health care. There were concerns about higher costs, a lack of information about GIC and the financial burdens on people with chronic illness, among other things.

GIC pools health care that's provided by independent health insurance companies, such as Harvard Pilgrim Health Care, the Tufts Associated Health Maintenance Organization and the Fallon Community Health Plan.

Some employees and retirees complained that Blue Cross Blue Shield does not participate in GIC.

Aldermen expressed particular concern for how the switch to GIC would affect retirees on tight fixed incomes, especially if they were to be hit by catastrophic illness, such as cancer. Without Medicare, such people could be forced to spend thousands of dollars out-of-pocked with the switch to GIC.

A tough vote
William Roche, alderman for Ward 1, said, "I can't remember the last time I've agonized this much over a vote."

At-large Alderman Dennis Sullivan said it was the toughest vote he's made in elected office, and that it led to a fight with his wife.

If the city didn't adopt the GIC plan, he said, he feared that in two or three years, Somerville would be forced to close down a fire station or lay off police officers.

Ward 2 Alderman Maryann Heuston, who chairs the finance committee, said the city barely managed to balance the budget this summer. This year "we were lucky," she said, because there were no unexpected costs. She warned budgets were getting tighter and tighter.

"There are no more hats to pull rabbits out of," she said in regard to balancing the budget.

In the end, all eight aldermen present voted to join the GIC.

An angry reaction from those affected
Retirees and employees were disappointed, and some were downright angry, with the vote.

"It's a total disgrace for the retirees," said Tom Leyene, who said he was a retired Somerville police officer who spent 33 years on the force. "This administration picks on the vulnerable," he said, complaining, "They really didn't give us the information. We had no facts to go on."

Herb Vargas, who said he worked for the Somerville Housing Authority but is now retired, worried about older retirees on fixed incomes. That said, Vargas, himself, participates in the GIC health care system, and he said it's "not bad. I like GIC."

Many felt the vote wasn't surprising. "It was sort of like a foregone conclusion that they were going to vote," said a retired Somerville teacher who didn't want to give her name. She, too, worried about retirees on fixed incomes, and she said, "Nobody really understands the GIC plan."

Moves to help those in need
Before voting for the measure, At-Large Alderman William White proposed a resolution that would encourage the city to pay 80 percent of health care costs for retirees; leaving retirees to pay 20 percent of their health-care costs. Currently, retirees pay 25 percent.

The board of aldermen voted to approve that resolution.

Moving to the GIC system also requires the city to put aside $2.3 million to help retirees, low-income subscribers and others pay for health care expenses they can't afford.

Donal Waide August 12, 2011 at 07:44 PM
In the private sector we have to suffer the same thing, sometimes on an annual basis...and retirees aren't affected because the company doesn't carry them. In either case, the company/city is doing what's best for the company/city and trying not to be too hard on the employees. However, in tough times, we have to make tough decisions and this was one that to me was a no-brainer. Saving almost $10m is very significant in a town with a budget of $170m. Also, the city has a contingency of $2m+ for those who may endure extra hardship on this change, once again something the private sector doesn't offer.
Stephen J. Cronin August 12, 2011 at 08:10 PM
The Aldermen cannot claim to have acted in the best interest of the city when they continue to deny its' employees participation in a cafeteria plan. This would allow employees the opportunity to maximize their healthcare dollars. Since most Aldermen receive their health insurance through the city it would be an equal benefit to them and their dependents. It is the law of the Commonwealth. No once during the debate or discussion did I hear or see a single example of what the out of pocket costs would be to an individual with the switch to the GIC. I emailed several Alderman with this question and asked if they would analysis their own circumstances. We all await their responses.
Donal Waide August 13, 2011 at 03:15 PM
Stephen, emailing a pol. for info is a black hole at the best of times. However, it took me about two minutes to find this page http://www.mass.gov/?pageID=afterminal&L=5&L0=Home&L1=Insurance+%26+Retirement&L2=Benefit+Enrollment&L3=Benefit+Decision+Guides&L4=Rates&sid=Eoaf&b=terminalcontent&f=gic_bdgs_bdg_rate_state_lifehealth&csid=Eoaf which explains rates etc.

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