Saugus opts out of health care program

SAUGUS – In 2007 Saugus was the first community in the state to jump into the Group Insurance Commission and in 2014 it will be the first community to jump out.”I think at the time it was the right choice,” said Town Manager Scott Crabtree.The community signed onto the state’s health insurance program, at the state’s urging, seven years ago after a series of catastrophic health care crises suffered by users sent the town, which was then self-insured, into a financial tailspin.When the unions signed a deal cementing the town’s entrance into the GIC it was estimated the town would save $1 million, now it’s estimated the town will save the same by getting out. Crabtree said the town has signed a three-year deal with Blue Cross/Blue Shield through MIAA, a nonprofit insurance arm of the Massachusetts Municipal Association, that will go into effect for July 1, 2014.The first year is estimated to net the town $1 million in savings, and rates during year two cannot go any higher than the trust average, Crabtree said. The MIAA is similar to the GIC in that it includes a pool of communities, so increases are averaged out across roughly 120 participants, he explained.”The rates locked in for FY 2015 are lower than the rates we had three years ago,” he said.Firefighter Union President William Cross fought hard in 2007 to get all of the town’s municipal unions to sign onto the GIC but like Crabtree he agreed the time had come to cut ties.”We actually already signed an agreement to leave the GIC,” he said recently. “We did our homework when we went into the GIC but since then the landscape has changed.”Cross said once communities began to sign onto the GIC insurance companies like Blue Cross/Blue Shield began to offer products that mirrored the state. He believes the new insurance program will allow users to control costs better than they could with the GIC plans. Crabtree said certain plans under the new program retain the same 90/10 split with the town picking up 90 percent of the cost of insurance and employees paying 10 percent, and they include no deductibles. The catch is they must use particular hospitals, should they choose one outside the plan they will have to pay a deductible, he added. But there is also a plan offered where participants pay 15 percent of the cost while the town picks up 85 percent and they can use any hospital with no deductible, he said.Anyone with eyes on the potential first year’s savings can pretty much put their collective wish lists away. Crabtree said he plans to use the savings to create a stabilization fund to offset any future health care costs. Although the town will not be self-insured under the new plan, he said he wants to establish a safety net to guard against any increase that might come in year three of the contract or thereafter.”I think it’s precedent-setting to come out of the GIC, but I think MIAA and Blue Cross/Blue Shield is the best for the town in terms of being able to maintain a full-service community,” Crabtree said.”It took some conversations but all the unions got together and voted for this,” Cross said. “The GIC worked out OK. It was great insurance as long as you didn’t use it.”
Saugus GIC membership on Dipity.