Baltimore City healthcare plan revised to cut costs

BALTIMORE, Md. - Saving money but still getting quality care. That's what Mayor Stephanie Rawlings-Blake says will be happening with new changes in employee and retiree health benefits.

Changes to those plans are expected to save nearly million in Fiscal 2012 and $10 million in Fiscal 2013.

Mayor Stephanie Rawlings-Blake says the changes are coming to combat rising city healthcare costs.

In Fiscal 2011, the City's costs for employee and retiree healthcare benefits are $257 million, or more than 11% of the entire operating budget.

She says, these costs have grown 30% since Fiscal 2003, despite a shrinking City workforce and previous cost saving measures. This includes over $80 million in annual prescription drug costs. The City spends more on all employee benefits than on the entire Police Department, the City's largest agency.

"Baltimore, like many other cities, is still making its way out of a dire fiscal crisis. If we do not act to address these rapidly rising healthcare costs, it will be impossible to keep basic services like public safety and public schools fully-funded," Mayor Rawlings-Blake said.

"The steps announced today will create significant savings this year and will put Baltimore in a better position to establish a pro-growth tax structure in the future, including a path towards reduction of property taxes."

The biggest change under the revised benefit plan is that employees and retirees will be encouraged to use more generic prescription drugs, instead of pricey brand name drugs.

The new plan will offer co-pay discounts on generic drugs while brand name co-pays will increase.