GREENFIELD — Mayor Ginny Desorgher, sitting alongside Finance Director Stephen Nembirkow, warned City Council that the city will face a roughly 15% increase in health insurance costs in fiscal year 2027, which may necessitate cuts and layoffs.
Last spring, City Council approved the current fiscal year 2026 budget, which included a 20% increase in health insurance costs from FY25, bringing the total health insurance cost from nearly $8.85 million to $10.65 million.
A 15% increase in health insurance costs this upcoming budget season would bring about a nearly $1.6 million jump in fiscal year 2027.
“It’s going to be a really tough year. We have met once with the insurance company (Health New England), and they projected another 15% increase; that would mean a 45% increase over three years. That’s pretty much not sustainable,” Desorgher told the council. “That’s something that every city and town is struggling with. There may have to be cuts and layoffs with that. [It’s] pretty grim.”
In response to Desorgher’s warning that health insurance increases will bring about a challenging budget season this year and in years to come, At-Large City Councilor Wahab Minhas asked the mayor whether she had considered implementing an “opt-out” option for the city’s approximately 600 employees who are receiving health insurance benefits.
Desorgher explained that an opt-out system is not expected to benefit the city, nor its employees, as the city will have to budget for all its eligible employees anyway in the event that employees leave or join the city’s health insurance.
“You have to have a pool of money set aside for that,” the mayor explained. “There are some people opting out that then won’t be covered. That’s not the best thing for the employee that works here. … Sometimes the problem with that is somebody can opt out for that year, wait a year, come back to Greenfield, take their significant other’s insurance if they were eligible for it, and then come back another year later to opt into Greenfield insurance. You have to allow enough money in the pot of insurance for all your employees, if they’re taking it.”
Nembirkow added that changing health insurance contributions to an 80-20 split, in which the city is responsible for 80% of an employee’s health insurance costs and the employee is responsible for the remaining 20%, may be a more tenable effort to reduce the city’s health insurance costs.
Even with an 80-20 split, though, the finance director explained that the city’s insurance costs would still be unsustainable. He said whichever cost-saving solution the city chooses to pursue, it would have to be negotiated between insurance unions and the Insurance Advisory Committee.
Precinct 1 City Councilor Katherine Golub suggested the city look for “creative solutions” to the rising costs, bringing up state efforts to implement a single-payer health care system, which was supported by the council through a resolution in September.
“It’s true that we’re getting to the crisis; it reminds me of our conversation we had last a few months ago with single-payer health care,” Golub said. “We might be saving a few thousand dollars and it is important just to look at creative solutions anywhere we can. It is just completely unjust to all the municipalities, to all the workers — this is getting to that crisis place, that wall.”
Desorgher, noting the severity of rising health insurance costs, said she does not believe the single-payer health care bill, S.860/H.1405, “An Act Establishing Medicare for All in Massachusetts,” will pass, given the state’s legacy as a mecca for health care services.
“Last year was traumatic. After going through that, I talked with our legislative delegation, because I feel like they need to do something on the Legislature with the insurance companies. However, Massachusetts is built upon insurance, health and education, so I don’t see anybody picking up that little basket and wanting to carry it,” Desorgher said. “I don’t think that [single-payer health care] is going to happen, just because of the investment that the state has made in health insurance and education.”