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As outlined by the Massachusetts Municipal Association, local communities are not immune to the impact of escalating costs, particularly the rapid rise in health care expenses.
Despite growing financial pressures, municipalities remain limited by Proposition 2 ½, which limits annual property tax increases to 2.5 percent over the previous year and requires voter approval for any additional increase through an override. Historically, most of Massachusetts’ 351 municipalities have had little success in persuading residents to support these overrides.
Underscoring the MMA’s warnings, a January 5 Boston Globe article, “Health insurance costs are rising sharply, and Mass. towns and school districts face a budget nightmare,” detailed the fiscal crisis facing municipalities as health insurance costs surge. This “budget nightmare” is driven in large part by the expiration of Affordable Care Act premium subsidies and federal cuts to Medicaid.
Already burdened communities are now dealing with double-digit premium increases, forcing many municipalities to make difficult decisions about how they will meet these rising costs, with some considering reducing the number of employees. With concern mounting, the Group Insurance Commission is exploring changes to health plans, possibly resulting in increased deductibles and co-pays.
Michael Nicholson, Mayor of Gardner, pointed to the serious consequences of Gardner’s largest employer, Heywood Hospital, filing for bankruptcy two years ago. Although the hospital ultimately recovered, its collapse would have left thousands of residents without jobs and plunged local businesses into economic uncertainty. Heywood Healthcare, the hospital’s parent organization, has been significantly affected by cuts to Medicaid and Medicare, as well as the expiration of Affordable Care Act benefits.
Further cuts in benefits will cause smaller rural hospitals to close, Mayor Nicholson says, forcing people in health care crises to travel longer distances for care. In addition, he predicts that people facing higher copays will think twice before summoning an ambulance, thereby endangering their survival.
While the U.S. House of Representatives has voted to extend ACA premium subsidies for three years, Senate Republican leadership has declined to allow a vote this year.
In January, Donald Trump released a “health plan” that promises to lower drug prices through negotiations with pharmaceutical companies, provide funds directly to individuals to purchase health care, and explain coverage options in “plain language.” Notably, however, the plan does not extend Affordable Care Act premium benefits, effectively ensuring continued skyrocketing insurance costs for millions of Americans.
This proposal underscores just how disconnected Donald Trump is from the economic realities facing working families and local governments that are already struggling to absorb the rising cost of health care.
