Officials considering bidding on city insurance
Date: 4/17/2012
April 18, 2012By G. Michael Dobbs
news@thereminder.comSPRINGFIELD — The Sarno Administration is considering whether or not to engage a consultant to write a Request for Proposals (RFP) for the city's health insurance.
Thomas Walsh, communications officer for Mayor Domenic Sarno, confirmed that city officials are considering whether or not to seek a bid for the policy covering city employees.
In a document sent to Gov. Deval Patrick by Sarno last month, rising health insurance costs were cited as among the factors that are causing serious concerns about the city's financial stability.
City Councilor Timothy Rooke has been urging for Sarno to go out to bid for the past two years. Rooke said the city's participation in the state Group Insurance Commission (GIC) did initially save the city money.
School Committee Chair Christopher Collins has joined Rooke in the effort to seek outside bids to compare with the cost of the GIC.
"I think what we should be doing rather than increasing fees, is increasing our own efficiencies within before we go out and increase any of the fees we have in place," Rooke said.
He now thinks it's time to consider what the private insurance market can offer. Under the GIC, the city's rates have been raised.
Rooke said that estimating a "real number" indicating how much the city could save by switching to a private firm couldn't be determined until a census of those covered by the GICs policy is completed. That information would include the number of people, their age, the breakdown of genders and pre-existing conditions among other facts.
He believes, though, a conservative estimate could be a savings between $4 million and $7 million.
Sarno has mentioned the possibility of layoffs as the city's newest budget crunch grows and Rooke said, "It's difficult to ask the School Committee and the City Council to lay off people when we're not helping ourselves by going through the process of an RFP."
Rooke said the reason a bidding process is vital now is because if the city doesn't opt out of the GIC by October, it will be locked into the insurance program for the next three years.
"Why would you want to box yourself into a corner, boxed in by a vendor?" Rooke asked.
According to the state's website, the GIC was founded in 1955 to provide health insurance for state employees. Under the Patrick Administration, municipal governments have been allowed to participate as a way to control health insurance costs. Recent news reports have shown that cities and towns across the state are seeking additional savings by going out to bid.
The Worcester Telegram & Gazette reported on April 11 that Fitchburg has realized more than a $1.6 by opting out of the GIC. Recently,
Rooke emphasized that despite being in the insurance business, he "doesn't have a horse in this race."
When asked about the political fall-out from Springfield leaving a program set up by Patrick, Rooke said, "I don't think it would be an embarrassment for Gov. Patrick. He has encouraged every city and town to go out to get the best plan and the best price."
Rooke said a consultant to draw up the RFP may cost the city $5,000 and if that fee is an obstacle, he said he would lead an effort to raise it privately.
