Melissa Bailey Photo
Outside an East Rock home that held an opponent’s campaign sign, Jessica Holmes made a pitch to reject City Hall’s plan to strip city worker’s benefits, and offer a different plan to save health care dollars — targeting $3.4 million that goes to insurance company middlemen.
Holmes, a Democrat, is running as a nominating candidate for the city’s only open aldermanic seat, in East Rock’s Ward 9, in Tuesday’s elections. She faces the party’s endorsed candidate, Democrat Matt Smith. She has made health care a central issue in the campaign. Holmes is being backed by local Yale unions; Smith by some higher-ups from City Hall.
In a stop along the trail, Holmes called for grouping more city workers into the same health care pools, as a way to cut the fees it pays for a health insurance company to administer its plans. She also called on the city to follow Hartford’s lead in joining a state prescription drug plan that just opened up to municipal workers.
Holmes made her case last week on a sidewalk near her Nash Street home, where she came across a voter with a Smith sign peeking out over red hydrangeas. Augustine Filomena (at right in photo above) met her by the stoop of his house wearing a broad-brimmed hat. The two got to talking.
The topic of health care came up as they discussed rising taxes and the cost of government.
The city is self-insured for its health care plans, with 5,642 active and retired workers and over 13,000 lives, which includes family members. It hires an insurance company, Anthem, to negotiate group rates with certain health providers.
Holmes told Filomena that the city’s workers are spread out between too many different health care pools and thus don’t have as much purchasing power when it comes to negotiating discounts on health insurance. The current setup also means more fees for the middleman: Anthem gets paid for each plan it administers.
The city paid Anthem $3,432,375 in administrative fees in fiscal year 2009-10, according to city spokeswoman Jessica Mayorga. In addition, the city hires a health insurance consultant on a year-by-year basis: William Gallagher Associates Insurance has a $87,000 contract for fiscal year 2010-11.
Right now, the city has a half-dozen different health care plans for its workers, according to union officials.
Holmes called for grouping more workers together to minimize administrative costs.
She said that would be a better option than the one Mayor John DeStefano is pushing for at the contract negotiation table: Shifting more of the burden of health care onto workers, or leaving unionized janitors out of a job.
The city should reduce the cost of its middleman, Holmes added, by going out to bid more regularly for its health insurance contract.
She handed Filomena a piece of campaign literature that references her health care ideas.
Holmes, who has a Masters in public health from Southern Connecticut State University, later gave more detail stemming from her experience in the field.
Before moving back to New Haven in June, she spent three years working for a not-for-profit health fund in Atlantic City. The fund was managed by a joint board of the HERE union and management of casinos. Her job was to design health care plans would save the companies money while maintaining good benefits.
Her ideas for New Haven come as the city grapples with rising health and pension costs that the mayor claims are on track to “bankrupt taxpayers.” In the past five years, increases in health care and pensions added an extra $36 million to the city budget, which was about 40 percent of the budget increase during those years, according to the mayor’s office. DeStefano is aggressively pursuing privatizing custodians’ jobs, which he claims would save millions per year.
“We’ve heard the mayor talk about health care as the key driver” for the city budget, Holmes noted. “Part of his idea is to make people pay more out of pocket for their coverage before their insurance kicks in.”
The city’s 13 labor unions all share the costs for their health care, with workers paying anywhere from 9 to 24 percent of the premiums, according to a city bond statement.
As DeStefano negotiates new contracts with nine of the city’s 13 labor unions, he is asking workers to pay more.
He is asking the city’s 179 school custodians to switch to a new health care plan where they would pay for a greater percentage of their premiums, according to Kevin Murphy, the labor advocate on a three-person arbitration panel that is determining the contract. The move would follow the lead of a small trades union, which agreed to have new members join the costlier plan.
DeStefano has also advocated shifting some other union workers to a health savings account (HSA), where workers put away money into a tax-sheltered fund to pay for medical needs.
Holmes warned against those solutions.
Health savings accounts “would be good if people had that kind of cushion,” she argued, and if health care were more predictable. But “unless you’re a wealthy person, it’s difficult to do.”
“If you make people pay those first couple thousand dollars themselves,” she warned, they tend to skip primary care. That means missing key screenings like mammograms, pap smears, and early diagnosis of diabetes. The end result is people don’t catch diseases early on, “you spend more money in the long run, and it’s more detrimental to peoples’ health.”
She pointed to two studies that show that high-deductible plans and HSAs have a “detrimental impact” on patients’ access to primary and preventive care.
“I’m a person that believes in prevention and early detection,” Holmes said. She offered a different solution: “volume discounting.”
She advocated the city merge more of its worker health plans to lower administrative costs. And she called for adding city unions to the state’s prescription drug plan, which recently opened up to municipal employees.
AFSCME Council 4, which represents 1,400 city and Board of Education workers, pushed hard for the bill, which Gov. M. Jodi Rell signed into law in June.
Municipal workers in Hartford joined the pool for a projected savings of $3 million, according to AFSCME spokesman Larry Dorman.
Mayoral spokeswoman Mayorga said the city is “currently in the process of working with the state to evaluate the prescription plan.”
Holmes said the idea is simple: “the more people you have in one pool, the deeper the discount.”
That idea should apply to pooling city workers, she added.
The city’s bargaining units have different choices for health plans. Contract negotiations determine the structure of their plans, and the portion of the premiums that workers have to pay.
Altogether, there are six or seven plans, according to Murphy. Anthem charges the city to design each plan, and then negotiates discounts from doctors. Fewer plans would mean lower administrative costs, he said.
Most unions “have worked with the city to reduce the number of available medical plans,” according to the July bond statement, which gives an in-depth look at the city’s financial health.
Mayoral Chief of Staff Sean Matteson said one reason there are multiple different plans is to make sure workers still have choice on how much they want to pay per month on health care, depending on their needs and family situations.
Smith, Holmes’ opponent, echoed that argument. He said workers need to retain “choice.”
Holmes said the number of pools could be reduced while still keeping some options for workers: “We should at least explore having a few different plans across multiple bargaining units. … You want to be able to maintain the choices for what’s appropriate for your family, but you also want to be able to lump [workers] together.”
A Competitive Process
The other proposal Holmes notes in her campaign literature, and which she pitched on the Nash Street sidewalk, is to more frequently put out to bid the city’s contract for its health insurance broker.
For the first time in 24 years, the city in the spring of 2008 opened up its health care plan to a competitive bidding process. Six health care insurers answered the bid. The city ended up with the same company, Anthem, but because of the competition, it got a cheaper plan. The plan was projected to save city at least $300,000 in the first fiscal year. Budget documents say the new bid will save the city $1.5 million, though the time period isn’t specified. The total savings weren’t available as of press time.
Holmes said standard practice is to put contracts out to bid every three years.
Matteson said the city has no plans to put the contract back out to bid this year, but doing so regularly is “not a bad idea.”
Smith replied that Holmes’ idea is not new.
“I don’t know exactly what new idea she’s bringing to the table on that,” he said. “Her idea is something that the city is already implementing. I don’t know where else it could go to save the kind of money that she’s looking to save.”
Smith said he is comfortable sending the contract out to bid every two years, but “I think we might have to look somewhere else for the savings” on the city budget.
Asked he if he has a suggestion, Smith said, “Off the top of my head, I don’t. That’s going to be part of the job. Looking at all areas of the city and looking at where we can find cost savings.”
Back at the hydrangea bushes, Filomena said he was impressed with Holmes’ take on health care. He said he deeply values preventive care — so much that he is starting a health care company of his own, based on preventing disease through nutrition.
After a 10-minute conversation, Holmes got up the nerve to ask what she had come to ask: Will he support her on election day?
“I think so,” said Filomena. “I think you’re both really good people and will work hard for East Rock.”
Without saying a word, Filomena slipped over to the fence and removed his Smith campaign sign.
A couple of days later, the sign lay in a state of purgatory, lying at the bottom of his white-painted fence, neither discarded nor displayed.
Past Independent stories on the Ward 9 race:
• Unions Go Independent In East Rock Race
• Holmes Makes Ballot
• Lifelong East Rocker Wins Party Nod
• It’s A 3‑Way Race In East Rock
• Schools The Issue In East Rock Race
I wondered how long it would be until the New Haven Independent picked a side in this race. Congrats Jessica - you and Roland are now this rag's favorite local politicians in East Rock! A day before the election, good timing NHI, I imagine you'll now write a whole story about Matt's ideas and how Jessica is forced to respong to them on the fly?
[Editor's Note: For previous stories on Matt Smith's positions: http://www.newhavenindependent.org/index.php/archives/entry/ward_9_candidates_focus_on_schools/ and http://www.newhavenindependent.org/index.php/archives/entry/smith_gets_the_nod_holmes_presses_on/
[And Mr. Smith's take on these health care issues, which emerged as central on the campaign trail, are fully included in this current story too. We do not pick sides in campaigns.]