Spiraling cost for city employee health insurance unsustainable

March 4, 2010
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As Mayor Carlo DeMaria goes about the effort of cutting city spending, he must ultimately and inevitably deal with the health care monster – that is – the cost of insuring the city’s employees.

It turns out, Everett’s per employee cost for supplying city paid for health insurance is $26,000 a year.

According to the mayor himself, the tab for this city benefit is rising dramatically from year to year and this year alone will add $1 million to the city budget.

It is an added $1 million the city does not presently have.

One might reasonably suggest that something must be done.

It is certainly being done in private industry, where employee insurance contributions have been adjusted to reflect the difficulties caused by the economic downturn, lower profits and less cash available for such benefits.

Not so in the public sector where city hall passes on the spiraling health care hikes from year to year to the homeowners and the commercial property owners.

The mayor alone cannot fight the unions representing city employees – he is asking for help to have the state legislature pass new reform laws that will force the issues like health care coverage.

However, the state legislature does not have the political will to change anything.

During the past ten years, health insurance premiums paid for by the city have doubled.

If nothing is done, they will double again – but this time in five years or less.

Everett presently pays 11.9% of its fiscal budget for employee health insurance – or about $8 million a year.

A Boston Sunday Globe report last week revealed that a former Everett city employee, Elizabeth Debski (a good and capable worker who did her job well for the city) who worked here for 10 years, leaving at the age of 42, and is now receiving free health insurance from the city for her family for the rest of her life.

In fact, it was revealed by the Globe report that Everett’s cost for employee family premiums are the third highest in the state behind Framingham and Waltham.

Those of us who are small business owners or who work in the private sector understand that the world is changing.

At the municipal level, not many seem to share this understanding.

The spiraling cost for city provided and paid for health insurance must be dealt with or every city and town will go bankrupt.