Cities weigh in
The national local government organizations generally did not take positions on the final health bill, although they worked behind the scenes to ensure that provisions that affect local governments make sense from their point of view. In the end, though, most issued statements supporting the expansion of health insurance coverage that is one of the bill's primary objectives.
Bomberg identified four key components that cities and towns wanted in the final legislation:
- Near universal coverage,
- Cost containment,
- Protection for the positions of cities and towns that currently purchase insurance for their employees, and
- Protection from a health care cost shift from the federal and state governments to local governments.
On the issue of universal coverage, Bomberg says the bill's expansion of Medicaid coverage, and new incentives, penalties and insurance shopping exchanges will extend health insurance to 31 million more Americans, which comes close to the organization's objective. In terms of cost containment, he is hopeful that there are sufficient incentives and experiments in the legislation to help reduce the rate of increase in health costs.
Of particular concern to cities and counties is the ability to provide health insurance to their own employees at a reasonable cost. "Local governments are the fourth largest employer in the nation," Bomberg says. "They spend $87 billion on health care. Our interest is so great on this issue. We have a huge work force, and we spend a huge amount on health care."
One of the strongest provisions in the plan to reduce health costs is the one that would tax the so-called "Cadillac plans," which are the highest cost, and often most generous, health plans. Many city plans fall into that category, which would be charged a 40 percent excise tax starting in 2018.
Bomberg believes that the provision will give both the unions and the managers an incentive to find ways to reduce the cost of health care and avoid the excise tax. "It will drive people to carefully examine the costs associated with the plan," he says. "People will want to avoid paying it, so it may help reduce the ultimate cost for cities." He is careful to note that the eight years until implementation should give the bargaining system enough time to test alternatives.
NLC also is pleased that local governments can continue to combine their health programs into "pools" that spread the risk of health insurance among a large number of local government programs, reducing the cost for individual plans. "The legislation is silent on pools," he says.