Transcript Community Preservation Act - Metropolitan Area Planning

Section 18 Election
2006 Wellesley Town Meeting
$12
600%
$10
500%
$8
400%
$6
300%
$4
200%
$2
100%
$-
0%
Total Group Insurance Budget
% Growth - Group Insurance Budget
Group Insurance Budget Growth (%)
Group Insurance Budget ($ Millions)
Growth in Group Insurance
Year-Over-Year % Growth
Group Health Insurance
30%
25%
20%
15%
10%
5%
0%
1990 1991
-5%
1992 1993
1994
1995 1996
1997 1998
1999 2000
2001 2002
2003
2004 2005
2006 2007
Growth in Health Insurance as %
of Prop 2 ½ Revenue Increase
120%
100%
80%
60%
40%
20%
0%
2001
2002
2003
2004
2005
2006
2007 (est)
Chapter 32B
• Basic program of health insurance
(1965)
• Optional provisions adopted
– Indemnity Plans
– HMO Plans
– Retiree Coverage
• Collective Bargaining Issues
Wellesley vs. Peer Communities
Town Cost
ACTIVE PLANS
MEDICARE
PLANS
HMOs
Indemnity
Wellesley
80%
50%
50%
Brookline
75%
75%
75%*
Lexington
84%
80%
80%**
Needham
71%
50%
50%
Wayland
70%
50%
50%
Weston
80-90%
50%
70-77%
* Pays 50% of Part B premium
** No subsidy for Part B premium
Coverage Eligibility
• Active Employee: Any non-seasonal
employee who regularly works 20 or
more hours/week
• Retiree: Any employee with 10 years of
full-time equivalent service
Employees/Retirees
Receiving Health Benefits –
1/1/06
1000
900
800
700
600
500
400
300
200
100
0
Active Employees
Retirees
What Have We Done?
•
•
•
•
West Suburban Health Group
Wellness Initiatives
$600,000 OPEB Appropriation
Healthcare Working Group
Section 18 Election
• Vote by Town Meeting
• Medicare eligible retirees required to
enroll in Medicare Supplement Plans
• Plans must be of “comparable actuarial
value”
Medicare Insurance
• Part A:
care
Coverage of hospitalization & hospice
• Part B:
Coverage of physician services and
outpatient care
• Supplement
Plans:
Fills in gaps in coverage gaps & provides
prescription drugs
Cost Shifting
Federal Government
Medicare Insurance
• Part A:
Coverage of hospitalization &
hospice care
Cost Shifting
Individual Plan
Total Cost
Town
Retiree
Before: Harvard Pilgrim HMO
$5,016
$4,128
$ 888
After: Medicare & Medex
$5,298
$2,649
$2,649
Difference
$ 282
$1,479
$1,761
After: Medicare & First Seniority
$3,066
$1,533
$1,533
Difference
$1,950
$2,595
$ 645
Black = Benefit
Red = Cost
Cost Shifting
Both Spouses over 65
Total
Town
Retiree
Before: Harvard Pilgrim HMO
$13,056
$10,353
$2,703
After: Medicare & Medex
$10,596
$5,298
$5,298
Difference
$ 2,460
$5,055
$2,595
After: Medicare & First Seniority
$ 6,132
$3,066
$3,066
Difference
$ 6,924
$7,287
$ 363
Black = Benefit
Red = Cost
Selectmen Vote
If Town Meeting accepts Section 18, the
Board of Selectmen directs the staff in
its implementation of Section 18 to
grandfather those retirees who are age
65 on or before July 1, 2006 and who
have retired.
March 21, 2006
Retirees Affected by
Election
700
600
500
400
300
200
100
0
Over 65/Active Plans
Over 65/Medicare
Plans
Retirees/Employees
Affected by Election
1200
1000
800
600
400
200
0
Additional Eligible
Employees
Current Active
Employees
Retirees under 65
Benefits to Town
• Immediate Impact/OPEB Liability:
$8M↓
• Future Savings
– Retirees under age 65
– Active Employees
– Active Plan Premium Savings
• Trend in WSHG and neighboring towns
Section 18 Adoption
WSHG Towns
Adopted
At 2006 Town Meeting
Ashland
X
Dedham
X
Dover
X
Holliston
X
Natick
X
Needham
X
Sherborn
X
Shrewsbury
X
Walpole
X
Wayland
X
Wellesley
X
Westwood
Wrentham
Not Adopted/
Not on 2006 Warrant
X
X
Other Towns
Adopted
Belmont
Not Adopted
X
Concord
X
Lexington
X
Milton
X
Newton
X
Sudbury
X
Weston
X
Winchester
X
Future Options
•
•
•
•
•
•
Legislative changes
Wellness initiatives
Contract negotiations
OPEB funding
Enrollment growth control
Board education on costs of hiring
practices
Good News! People are living longer than ever! Bad news –
we don’t get to choose which people.
OPEB Funding Program
without Section 18 election
120
101M
Millions ($)
100
80
60
56M
40
20
0
Before Election
Active Employee
Liability
Retiree Liability
OPEB Funding Program
with Section 18 election
120
101M
Millions ($)
100
93M
80
60
56M
56M
40
20
0
Before Election
After Election
Active Employee
Liability
Retiree Liability
National Healthcare
Expenditures as % of GDP
12,000
16.5%
16.0%
10,000
15.5%
8,000
15.0%
6,000
14.5%
14.0%
4,000
13.5%
2,000
13.0%
0
12.5%
2000
2001
GDP
2002
Healthcare
2003
2004
Healthcare as % of GDP
2005