Town employees can expect to feel the pinch from rising health care costs in the coming year thanks to municipal health care reform legislation that will shift the burden of paying for health insurance away from towns and onto workers.

The new state law passed in July makes it easier for towns to bargain for health insurance plans with unions and allows towns to move their employees to the less costly health insurance plans used by the state through the Group Insurance Commission (GIC).

The Cape Cod Municipal Health Group, the joint purchasing group for all the Vineyard towns, wants to create GIC “look alike” plans through its insurance providers Blue Cross Blue Shield, Harvard Pilgrim, and Tufts. The new plan would be modeled after the state plan and result in lower premiums. Towns are expected to save 13 per cent on premiums with the switch, with 25 per cent of that savings going to the employee in the first year. Meanwhile, deductibles and copays will double or more.

The law allows for towns to extend that 25 per cent savings, called the mitigation plan, beyond year one if they choose.

Other units in Dukes County that buy their insurance through the group include the Oak Bluffs water district, the Martha’s Vineyard Regional High School, Martha’s Vineyard Commission and Martha’s Vineyard Refuse and Resource Recovery District.

The health group’s steering committee, the group charged with coming up with the new plans, met with its members on the Vineyard last week to vote on the changes. It was the second of three votes; the first was two weeks ago on Cape Cod and the final vote will be on Oct. 5. If adopted, the changes will go into effect July 1, 2012.

The plan changes being considered keep the options of Blue Cross Blue Shield, Harvard Pilgrim and Tufts PPOs and HMOs but only the GIC look-alike version will be offered. No benefits will change, only the cost.

Currently there are no annual deductibles for in-network services but with the change, annual deductibles would be $250 for an individual and $750 for a family. In some plans office visit copays go from $10 to $20, specialist office visits go from $10 to $35, emergency room visits go from $20 to $100, and in most plans inpatient admission increases from no copay to $500.

Carol Cormier, a private consultant to the health group, explained that as health care costs have risen steeply over the years, the share for members has not because copays have remained fixed. She called the change a rebalancing of the cost share.

“I keep using the word rebalance because the copays have stayed the same for years and years, whereas cost of services to where copays applied have been growing very rapidly at about 10 per cent a year,” she said.

The reason for the look-alike plan is because the GIC has a tiered network plan for providers; tiered networks give patients financial incentives for choosing more cost-effective doctors and hospitals.

Ms. Cormier said the health group realizes the Cape and Islands are not good places for the tiered network plans because there are not enough choices for providers and hospitals in the service areas.

“Your providers are the in highest tier and that’s what happens when you’re in geographically isolated places,” she said. “What [the health group] is proposing is a modification of that where there is no tiering to specialists or hospitals.”

Maggie Downey, the Barnstable County representative on the health group steering committee, explained it another way.

“What this is doing is shifting the costs to the employees and two key things — high deductibles, and higher copays,” she said. “This is good, better and different, it shifts the costs away from towns and municipalities to their employees, hence the mitigation plan.” She continued:

“It’s going to change the way we start to view our health care and it’s going to take time, you’re going to have to question your doctors, it’s really going make the individuals and families take a different position on health care. Whether we like it or not, this is our world and we’re going to have to approach it differently. [Employers and employees] will be reacting in a totally different way on the Cape and the Vineyard.”

At the Chilmark selectmen’s meeting last week selectman Warren Doty sounded off on the plan and expressed concern about shifting medical costs onto the backs of the employees.

“It’s going to reduce our burden by 13 per cent but it might increase the burden on our employees by significantly more than 13 per cent,” Mr. Doty said.

Town treasurer Melanie Becker said employees could expect increases of 100 to 150 per cent.

“Our employees and towns of Martha’s Vineyard are middle-class folks, they aren’t doing great and some of them are being paid $15 or $18 an hour,” Mr. Doty said. “They’re the ones who are going to be hit with additional costs because of this thing. It’s crunching down on regular, working folks.”