TRENTON, N.J. – With the threat of health care rate hikes of up to 24% looming for public employees and retirees, Assemblyman Christopher DePhillips says there is no better time than now to pass years-old reforms to health care benefits, lowering costs immediately and long term.
“Clearly this is an urgent issue that has never been addressed with urgency,” said DePhillips (R-Bergen). “Lowering the cost of health care has been on the backburner for years, and the few attempts to do so with backroom deals have failed.”
The reforms are based on the findings of the New Jersey Pension and Health Benefit Study Commission, known commonly as the Byrne-Healey reports for two of its most notable members. At the time of publication, the reforms would have saved the state $1.4 billion and local governments $2.7 billion, enough to alleviate the looming rate hikes while reducing future costs and potentially lowering property taxes.
The looming 24% rate hike is on government employees as school employees face a potential 15.6% hike, plus 15.6% for retired government employees and 13.6% for retired school employees. Those crushing cost increases have been postponed indefinitely at a July 13 meeting of the State Health Benefit Commission. Average cost increases are 3%-5%.
The Murphy administration has blamed Covid and inflation for the increase. DePhillips questioned Democrats for doing nothing despite controlling the state government for five years, and the legislature for 20.
“We cannot honestly blame the pandemic and inflation for these proposed rate hikes. It is Democrat-controlled government mismanagement that has brought us to the precipice,” DePhillips added. “Republicans want to act now to pull us back from this fiscal cliff and actually make life more affordable.”
Taxpayers spend an average of $16,000 for individual and $13,000 for retiree health benefits through the State Health Benefits Program and School Employees Health Benefits Program commissions. Meanwhile, private sector employers contribute an average of $5,000 toward employees’ health plans.
“The state spends nearly triple what a private employer contributes for health benefits. Neither taxpayers nor public sector workers can sustain this,” DePhillips said.
A highly touted plan negotiated between Democrats and the state teachers union in 2020 to save $1 billion annually backfired in 130 school districts. Some districts instead saw increases of $1 million or more in premium costs. And since Gov. Murphy took office, Democrats have rubber-stamped over $900 million in six new health care taxes foisted on the middle class, including penalizing those who cannot afford benefits.
“Instead of taking responsibility for the problem becoming worse, I hear excuses that are purely political cover when people need solutions,” lamented DePhillips. “We need to secure benefits and people’s financial future as the commission said. The reports are as true and necessary today as they were then. The time to act is now.”
DePhillips added that asking public employees to switch from top-tier platinum plans to gold or gold-plus levels – mirroring the options of the federal Affordable Care Act to level public section benefits with private section benefits – would translate into savings for workers and taxpayers while still providing high-quality benefits.
The 2015 commission report said, “Under the circumstances, continued inaction is the same as conceding failure, and failure should not be an option when the future of the State and its employees is on the line. The need for urgency in adopting a solution cannot be overstressed… Let’s secure the benefits for public employees and the financial future of the State of New Jersey.”