Let municipalities join county self-insured health plans
Every year, Gov. Andrew Cuomo preaches governmental consolidation, at least at the local level. In discussing this issue, the Times Union referred to one of the very first bills I introduced, A739, a government consolidation bill that would allow all municipalities to join county self-insured health plans. Self-insured health plans provide the greatest array of benefits at the lowest cost. The more municipalities that are members, the more the risk is spread, and the more money they (and taxpayers) will save.
Phil Steck - Times Union: Monday, September 18, 2017
This legislation was requested by several upstate municipal governments that I represent. It is also a product of my experience. Albany County became self-insured when I was a county legislator (thank you, Mike Breslin).
Many state workers think they have the best benefit plans. Not so. When I moved from Albany County's self insured plan to the State NYSHIP plan, my share of the premium doubled and the benefits were less. I had a daughter out-of-state in college, so we left the NYSHIP plan for one that provided her with better coverage.
Since all municipalities in the state are facing rising health insurance costs, I thought passing this bill would be a no- brainer. The legislation is supported by the associations of Counties, Mayors and Towns, and most recently the Civil Service Employees Association. I was told getting these groups on board would be critical to passage of the legislation. Those who said unions would be opposed were wrong.
Rising health insurance costs are not unique to municipal government. But municipalities are different from private employers in that they are subject to a tax cap. Health care costs represent a significant portion of their budgets. Therefore, it is imperative for them to keep health insurance costs under control. It is noteworthy too that many large employers in the private sector are self-insured.
This legislation would benefit every village, town, city, school district, etc., within a self-insured county. There are 24 counties upstate that have self-insured plans.
What obstacles must be overcome to pass this legislation? Private health insurers have not lobbied against the bill, because the counties pay private insurers to administer their self-insured plans. Private insurers have a role to play, even if they do not control premium dollars.
The problem is "institutional memory," specifically Articles 44 and 47 of the Insurance Law, enacted in 1984 and 1994 respectively, which were supposed to promote municipal consolidation but instead retarded it. State control is so cumbersome (more so in Article 47) that only one county has ever joined its constituent municipalities in the self-insured plan. The counties prefer to go it alone.
"Institutional memory" can be a blessing. It prevents legislatures and agencies from dismantling important safeguards. Better institutional memory would have prevented the decontrols that led to the financial crisis of 2008.
But "institutional memory" can be a curse, particularly in health care. The health care market is much different today than in 1984 or 1994, when HMOs were supposed to save us. Change is imperative.
Some argue that "consumers" (employees and taxpayers) have to be protected. But no county plan has experienced any financial difficulty. Nor is the bill at odds with "community rating." It is not an insurer's effort to pick off a healthy population, such as insuring only fitness instructors or bicyclists. Municipal employees are not so numerous as to upset the community rating.
Finally, it does not affect Obamacare, since municipal employees had health insurance before Obamacare and do not buy health insurance in the exchange. The bill's purpose is simple: to save taxpayer money. And, if the private sector can self-insure, why not the public sector?