A reworked approach to pulling 270 retired teachers and school employees out of the state health insurance system and into the municipal system to save the city money won the support yesterday of a pivotal voice on the City Council.

Sefatia Romeo, who voted against the initial approach to bringing the retirees into the city health insurance system, said she was satisfied that no one would be penalized under the new plan.

Romeo said the retirees and their surviving spouses will "be grandfathered" in the proposed shift to the city's health insurance plan. It will provide them "a little bit better coverage," Romeo told the Times.

The grandfathering, Romeo estimated, would reduce the city's savings to around $150,000. The initial proposal was pegged at saving the city more than $450,000.

"(The retirees) are grandfathered in, so I'm happy," said Romeo, the council's specialist on health insurance, an expertise attained in work counseling patients and matching them with coverages for Northeast Health System's Addison Gilbert Hospital.

At an afternoon meeting in Mayor John Bell's office, personnel director Donna Leete outlined a modification of a plan that the council rejected 4-3 on May 1. That vote came after a raucous hearing at which more than 100 teachers and retirees made clear then liked the system they were in.

Teachers union president Mary Rudolph, who led the opposition, said she was unaware of the meeting, but added, "It's always good to keep an open mind."

"This is not a done deal," Bell said.

At the start of the budget cycle, which required cuts to many departments, Councilor Jason Grow researched and introduced the idea of moving all school retirees out of the state program, which requires the city to pay 90 percent of premiums.

The city pays only 75 percent of the premiums for the more than 600 municipal workers.

Grow said he and Leete responded to Romeo's concerns that the shift, while saving the city money, would have cost the retirees more in premiums.

The new plan also adds a rider for hearing aids and an optional dental plan. The state system covers hearing aids but does not include dental coverage.

"We're making sure existing people are taken care of," Grow said. The retirees will "pay the same rates and have better benefits."

The amended approach to the shift must be approved by City Council. A council hearing could be held as soon as Aug. 7. If approved, open enrollment in the various programs offered to municipal employees could begin within days, according to an outline of the issues discussed yesterday.

In the days ahead, Bell said, teachers union officials will be briefed.

"This is discussion, not negotiation," he said.

But Bell described the opportunity to bring the retirees into the municipal health insurance system as "an equity issues."

Grow used the same phrase to urge his colleagues to adopt the original program.

Steven Magoon, Bell's administrative assistant, said the strengths of the amended approach are "improved benefits," the offering of coverage for "hearing aids and dental benefits."

The written outline for yesterday's meeting with Romeo proposes a "mass mailing with notice of a public hearing to all retired Gloucester teachers."

The city agreed to put retired teachers into the state system in 1971. At the time, the state required the city to pay about 70 percent of premiums, then over time shifted more of the burden from the retirees to the city until the current 90/10 shift was reached.

Grow said he began researching the savings of shifting out of the state system when confronted with the near certainty that the city's dire fiscal condition would force massive teacher and school employee layoffs.

School Committee Chairman Jonathan Pope and his committee colleague Carolyn Kirk, a mayoral candidate, endorsed the concept as a means of limiting layoffs.