Blue Cross Blue Shield of Massachusetts is starting to recapture business it lost when cities and towns started joining the health plan for state workers, with the aim of saving money on premiums. The state’s biggest insurer announced that the town of Saugus, the first town to make the switch, would be returning to the fold.
Most of the municipality health insurance business, 75 percent, still belongs to Blue Cross. But after a 2007 law allowed cities and towns to join the state workers’ plan, called the Group Insurance Commission, they started to defect from Blue Cross and other commercial insurers. It is unclear how much money is at stake for Blue Cross.
The town of Saugus terminated its contract with Blue Cross in favor of the Group Insurance Commission in January 2008. A second wave of municipalities joined the GIC after a municipal health care reform law was passed in 2011. There are now a total of 39 cities and towns in the GIC, plus a handful of school departments and other local government entities, for a total of 51 municipal customers. Three towns — Gloucester, Northampton, and North Andover — are set to join in January 2014.
But along with Saugus, the Wachusett Regional School District will switch back to Blue Cross, and the insurer is aiming to add to that list.
Saugus officials said signing on with Blue Cross will enable the town to save $1 million next fiscal year.
“It’s important for municipalities to have the flexibility to shop around to find the best health care benefits for them and their employees,” town manager Scott Crabtree said in a statement. “Our rates for FY 2015 are locked in and will be lower than what we had three years ago through the GIC.”
Date: Nov 6, 2013