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STATE HEALTH INSURANCE

While the city contemplates changing its health insurance carrier for the first time in decades, officials say a comparison with the state’s Group Insurance Commission plan should be analyzed and could save even more money than the recent bids received from private firms.

City Councilor Cathy Ann Viveiros asked the city to use a cost-analysis tool by the Massachusetts Municipal Association’s private nonprofit Interlocal Insurance Association to compare city health insurance bids from longtime provider Blue Cross and competitor United Healthcare of New England.

“My preliminary discussions with MIIA suggest that the city would likely see a decrease in premium costs with the GIC,” Viveiros wrote Human Resources Director Madeline Coelho. City Administrator Adam Chapdelaine said the Correia administration supports seeking more insurance comparisons.

The MIIA represents 115 of the 351 cities and towns, and formed a health benefits trust plan with Blue Cross Blue Shield of Massachusetts separate from the state plan.

Viveiros said the MIIA spreadsheet tool offered to all municipalities allows evaluations of current and prospective health insurance plans with the GIC plan. “If we’re going to make a decision on whether to make any changes in health insurance,” said Viveiros, “we should have all the options.”

With state cutbacks in local aid, the city also could be required to make this comparison and choose a different option, Viveiros said.

That’s because Gov. Deval Patrick’s proposed that municipalities demonstrate their health insurance coverage is at least as cost-effective as a GIC plan. Patrick’s filing of the second Municipal Partnership Act in January includes an option that allows the state to cut nonrestrictive local aid to a city or town if it doesn’t join the state insurance plan or have at least an “equitable rate,” said Cindy Roy, spokeswoman for the state Department of Administration and Finance.

If passed by the Legislature, local aid would be lowered by the difference between the GIC and the community’s cost.

The city’s 75 percent share for nearly 5,000 employees is about $38 million, while members’ share puts the total cost to roughly $50 million.

Rationale for the GIC option, Roy said, “is some municipalities are spending entirely too much on their health care costs. And there are options to lower their costs and there are incentives to do just that.”

Twenty-six municipalities will participate in the recent GIC offering as of July 1, Roy said.

The legislature’s Joint Committee on Municipalities hearing Tuesday will include the MPA. Rep. David Sullivan, a committee member, concurred the GIC option might be a way to “leverage some efficient cost savings.” A challenge, he said, is reaching collective bargaining agreements with multiple unions.

The MPA proposal this year reduces the 70 percent threshold approval by unions to 50 percent for GIC participation, Roy said.

The state’s GIC offers a half-dozen carriers, but does not include Blue Cross.

Chapdelaine said about a year ago, under his predecessor Alan Silva, the city sought help via an online tool to compute individual health insurance costs through the private, nonprofit Pioneer Institute. “That’s what we’re beginning to do,” he said, saying the administration will also “look at what the MIIA has to offer” to cut costs.

According to Viveiros, the institute is not set up to do “a complete plan analysis” to compare each carrier’s plans.

Chapdelaine called the Pioneer Institute a “research institute” and the MIIA “an advocacy group.” He said the two groups could provide complementary information. He did not know when the city would have it.

Chapdelaine said he understood the city’s Insurance Advisory Committee had not shown interest in the GIC. An issue city unions would want to address is different co-payments and out-of-pocket expenses.

“The unions are not saying we won’t change,” said fire Lt. Michael Coogan, chairman of the Insurance Advisory Committee representing city unions. Speaking of any change from Blue Cross, he said, “We want to assure members we’re not exploring a lesser plan.” Viveiros suggested the city could negotiate a different share of the premiums to offset workers’ expenses.

The GIC, Roy said, “is one of the ways to reduce the costs that municipalities are facing.”

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