Cosmetic surgeries are driving up Buffalo's health insurance costs by at least $1 million a year as many uniformed employees, their relatives and retirees get tummy tucks, hair transplants, nose jobs, breast implants and other elective surgeries.
Police officers, firefighters and other employees who retired before 1995 are eligible to receive the most costly coverage. Traditional insurance plans for families cost more than $14,000 a year, and Buffalo pays 95 percent of the tab for eligible employees who have at least four years of service.
This is the same city that is cutting the size of its police force, closing firehouses and raising the garbage user fee to balance its budget.
Some claim the perk vividly backs up a premise advanced in a new study that concludes Buffalo provides more-generous medical benefits than those offered by comparable cities and in the private sector.
Buffalo hired a New York City consulting firm that has been dissecting insurance data for 10 months.
"The combination of rich benefits, low employee contributions and lack of discounts is resulting in higher net costs to the city," said Mercer Human Resource Consulting.
But as the long-awaited report was hashed out at a three-hour meeting Wednesday, some union leaders criticized the methodology, saying unfair comparisons were made that "totally discredit" the study.
Consultant Kathleen L. Howell outlined numerous findings:
Employees generally pay less toward their premiums than in comparable cities.
Employees typically have lower co-payments.
Some union contracts continue to force the city to offer expensive traditional insurance coverage, as opposed to less-costly managed care plans. Consultants say the higher-cost "indemnity" plans are no longer competitive.
Thousands of retirees are not enrolled in Medicare Part B or in the new Medicare prescription plan. Convincing retirees to go on Medicare, then providing supplemental insurance to offset any benefit gaps, could save Buffalo $5 million.
The study also concluded that last year's decision to place all city employees under a single health insurer saved $10.7 million. In addition, progress has been made in recent years to move non-uniformed city employees off the most expensive insurance policies and into cheaper HMO plans. The city achieved additional savings when it moved to a different formula for calculating premiums, a formula that takes into account employees' actual use of health insurance. Still, medical benefits will cost the city $48 million over the next year.
Mayor Anthony M. Masiello said the study red-flags the need to make changes.
"Our health insurance costs have gone up 67 percent over the last five years. If we allow that to continue, there will be no one working for the city," he said.
But overhauling insurance benefits is easier said than done.
"Virtually everything has to be negotiated (with the unions)," said Human Resources Commissioner Leonard A. Matarese. "This study gives us a road map for when we sit down with the various unions."
Labor leaders who represent city blue- and white-collar employees said their unions have already made significant concessions over the years. They said they're willing to look at additional changes, but only if the state control board lifts a wage freeze that it imposed last year.
"We stopped talking when they froze the wages," said Michael F. Drennen, president of the white-collar union.
Leaders of the police and fire unions did not attend Wednesday's briefing.
Matarese said if city and union bargainers come up with a plan that would save enough money through concessions to offset the costs of raises, he would be willing to pitch the plan to the control board. Common Council Majority Leader Marc A. Coppola urged negotiators to devise such a plan.
Matarese said the $42,000 consultant study has already paid dividends, claiming the voluminous report put the city in a stronger negotiating position with Blue Cross and Blue Shield of Western New York. He said premiums will go up by 8.1 percent, the lowest increase in several years.