Everybody — households, employers, and governments alike — is dealing with rising healthcare prices.
Whereas no single coverage can clear up healthcare inflation broadly, Home Invoice 1399 (H.1399), at present earlier than the Massachusetts Home Methods and Means Committee, presents a focused and sensible alternative to deal with affordability for one group particularly: Medicare-eligible municipal retirees, whose healthcare prices should not solely rising sooner than inflation however sooner than municipal revenues.
H.1399 gives municipalities with a voluntary alternative to modernize retiree healthcare by pairing employer-funded Well being Reimbursement Preparations (HRAs) with particular person Medicare protection. This strategy has been used efficiently nationwide for practically 20 years and already serves greater than 50 million Medicare beneficiaries, together with lots of of 1000’s in Massachusetts.
Importantly, H.1399 doesn’t mandate any change. It merely permits municipalities to think about this selection—and it ought to solely be pursued if an actuarial evaluation demonstrates, with 99.99% confidence (as actuaries by no means say 100%), that retirees can be equal or higher off than beneath the prevailing group plan. As soon as an HRA funding stage is established, the construction ensures advantages don’t erode over time, as funding is adjusted yearly for medical inflation.
For Medicare-eligible retirees, the potential advantages are substantial. A consultant retiree might get hold of probably the most complete Medicare Complement protection obtainable in Massachusetts — no networks, no prior authorizations, and close to first-dollar protection — together with a strong Medicare Half D plan, for roughly $275 per thirty days in 2026. Comparable municipal group retiree plans now price nicely over $500 per thirty days and proceed to rise extra quickly.
As a result of Massachusetts regulation already requires municipalities to subsidize no less than 50% of retiree healthcare premiums, retirees in cities like Wellesley that present a 50% subsidy might see common financial savings of roughly $4,000 per retiree per 12 months (or about $8,000 for a retiree and partner), with none discount in advantages.
Municipalities profit as nicely — not solely as a result of their share of premiums is decrease, however extra importantly by a discount in long-term healthcare liabilities. OPEB liabilities, which characterize retiree healthcare obligations for each present retirees and energetic workers, sometimes decline by 20–30% beneath this mannequin. Decrease liabilities enhance long-term fiscal sustainability, strengthen municipal steadiness sheets, and might positively affect credit score high quality. In flip, this makes it simpler for communities to fund capital initiatives, put money into faculties and infrastructure, enhance worker wages, shore up pension funding, and think about extra strong COLA base will increase for municipal retirees — with out elevating taxes or reducing companies.
Some advocacy teams oppose H.1399, however doing so successfully prevents municipalities from even evaluating this chance — whereas concurrently denying Medicare-eligible retirees entry to equal or higher advantages at considerably decrease price. Sustaining the established order just isn’t a impartial place; it just about ensures rising fiscal pressure and diminished flexibility over time.
H.1399 just isn’t a mandate. It isn’t a profit reduce. It’s a measured, accountable choice that deserves critical consideration.
Municipal retirees, native officers, and taxpayers who care about long-term affordability and monetary stability ought to respectfully encourage their state legislators to permit cities, cities, and the Commonwealth the chance to judge H.1399 on its deserves.
Considerate consideration — not obstruction — is what accountable governance requires.
The creator, David Kornwitz, is chair of the Wellesley Retirement Board
