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These local jurisdictions, in the face of serious budget constraints, have repeatedly pushed for legal relief that would enable them to decrease the burden of public employees' and retirees' health benefit costs. Meanwhile, public employee unions have battled to protect what they believe their members have earned through their collective bargaining rights. In this state-policy drama, key players managed to come to a compromise that neither side loves, but both view as a solution.

Earlier this summer, Massachusetts Gov. Deval Patrick signed a new law reforming the way that cities and towns design health insurance plans for their employees. As local governments across the country continue to confront the harsh political and fiscal issues of spiraling employee and retiree health costs, the story of how this law came to be is worth examining.

Employers struggling to keep down insurance costs are increasingly requiring workers to pay a percentage of high-cost drugs rather than a modest co-pay.

Bruce Bodaken of Blue Shield of California says encouraging patients to live healthier lives will help head off chronic disease and pay off in lower costs.