When signed into law this past July, the program was touted as a potential source of significant budget savings at the local level. Cash-strapped local officials stood shoulder to shoulder with Governor Deval Patrick, while applauding the new law.

Now local officials, who are predicting a new round of budget shortfalls in 2008, claim that little savings can be had by transferring their local insurance plans over to state control. Some claim that such a move could actually raise budget costs, rather than lower appropriations.

One local concern is that municipal retirees, in communities that only offer managed care health plans, may opt to join the more robust and expensive GIC Indemnity Plan. Upon joining the GIC, the law allows local retirees to choose to enroll in any one of the nine plans offered by the state.

Over the past decade, some municipalities have dropped their indemnity coverage, thus forcing retirees into HMOs, PPOs, and other varieties of managed care plans. This has been a sore issue with many local members, particularly for those retirees living outside of Massachusetts.

“Insurance benefits vary from community to community. The types of plans offered and costs of the insurance are really all over the map,” said Association Legislative Liaison Shawn Duhamel. “As we have been saying all along, joining the GIC is not a one-size fits all solution. It may be a great idea in one community and a terrible one for another.

"Our hope is that each municipality will use this time to examine their current insurance plans and compare their situation with that of the state and other communities. They may find that they are already getting a good deal on insurance or, if not, make the collective decision to join the GIC. It’s very important that this law is a local option, in which our members have a seat at the table.”

Looking To 2009

“We have seen this process work well in Saugus and Winthrop, where the local unions, retirees, and municipal officials were able to quickly come together and strike a deal. In fact, Saugus has agreed to pay 60% of the Medicare Part B premium and is still saving money by joining the GIC,” explained Association President Ralph White. “There has to be a give and take between local officials, retirees and unions to make this process work.

“Unfortunately, there are some local officials and, more notably, their insurance consultants, who would prefer to focus on shifting more and more costs on to the retirees rather than exploring other options like the GIC. All we ask for is that our members are treated fairly and have a voice in this process.”

Recent reports have unfairly blamed local retirees and active employees as obstructing the process by rejecting the GIC outright. However, the feedback, that Association officials have been getting from local retirees, indicates just the opposite.