This Boston Foundation report finds that Massachusetts’ cities and towns could reduce their health care costs by participating in the state’s Group Insurance Commission (GIC).  The report specifically studied Boston, Cambridge, Melrose, and Marshfield, finding that all of the cities would save under the GIC.  However, under current law, many localities cannot join the GIC without permission from local unions. 

From the report:

The drop in state tax revenues and the subsequent reduction in local aid to cities and towns have forced municipal governments across the Commonwealth to reduce services, impose layoffs, and increase taxes and fees to balance their fiscal 2009 and 2010 budgets. The outlook for fiscal 2011 is hardly encouraging. Compounding this problem is the continued escalation in operating and overhead costs, including the enormous cost of providing health insurance benefits to municipal employees and retirees.

Ten years ago, Boston’s health insurance costs consumed 8% of the City’s budget. Today, more than 11% of the City’s budget is spent on health insurance for employees and retirees. Similar rates of growth have occurred across Massachusetts cities and towns, adversely affecting the ability of local governments to provide basic municipal services.

The Boston Foundation. (2010). The utility of trouble leveling the playing field: giving municipal officials the tools to moderate health insurance costs. Carey, B.