by Nikita Biryukov, New Jersey Monitor
The State Health Benefits Commission approved sizable increases to premiums paid by state, county, and local government workers over the objections of its union members, who claimed the meeting was rife with procedural missteps that should have delayed the vote.
By a vote of 3-1 with a single abstention, the commission approved double digit increases that will raise premiums for most workers by about 20%, though cost-saving resolutions passed by the State Health Benefits Program’s Plan Design Committee nudged increases down slightly for a limited selection of health benefit plans.
“This is far out of line with what is being seen elsewhere,” said Dudley Burdge, the commission’s labor member representing local government workers. “It’s going to be very destructive to the State Health Benefits Plan.”
Active state workers enrolled in CWA Unity or NJ Direct Plans will see total increases of 19.6%, down from the 20.7% the state’s actuary forecast in July. The drop is a result of resolutions raising specialist and out-of-network copays to $15 and $30 above their in-network counterparts that were unanimously approved by the Plan Design Committee Wednesday morning in a bid to drive public employees to cheaper care.
The committee deadlocked on a non-binding, labor-backed measure urging the commission to delay its vote on rates.
Medical coverage rate increases for active state workers on PPO or HMO plans dropped by 0.3% from the July estimates, to 21.1%, while tiered network medical rates rose by 21.9%, or 0.4% less than was estimated in July.
Local government workers saw total increases of between 20.9% and 21.6%, depending on their type of plan.
Total rates for early retirees in state and local government were raised in line with the July forecasts, increasing by 12.7% and 13% respectively. Overall rates for state Medicare retirees fell by 2.9%, while rates for their local counterparts edged up by 0.7%.
“I don’t think there’s been serious consideration given to ways of alleviating those costs, and I’m very concerned that we’re going to have many locals leave,” Burdge said. “We’re going to have many members of the plan who are going to have to pay a lot more.”
Public sector unions and lawmakers from both sides of the aisle expressed alarm in the run-up to Wednesday’s vote, cautioning the rate hikes would force an exodus of public workers, especially at the local and county level, where increases are larger and costs are more directly passed onto residents. Hundreds of union members rallied outside the Statehouse in Trenton Tuesday to protest planned increases. Hundreds of union workers rallied outside the Statehouse in Trenton on Sept. 13, 2022, to protest healthcare premium increases. (Photo by Dana DiFilippo/New Jersey Monitor)
But state actuaries and administration officials said at a Plan Design Committee meeting last month that surging inflation and a post-pandemic rebound to health benefit utilization made them a necessity.
“As public workers ourselves, we sympathize with the rates, but the process has resulted in the rates that are before the commission now,” said Danielle Schimmel, who chairs the commission and represents Treasurer Liz Muoio there.
The commission’s two labor members repeatedly raised process complaints during the meeting, which went into closed session for more than two and a half hours while awaiting Plan Design Committee votes.
Burdge questioned why union-backed resolutions submitted before Wednesday’s meeting that, among other things, would have tied service prices to Medicare rates were left off the agenda and about the meeting’s teleconference format, which he charged risked privacy breaches and made the meeting inaccessible to people with hearing impairments.
Schimmel said those resolutions had been received but needed to undergo a legal review before they could be put forth for discussion or a vote.
The labor members also took issue with the absence of a Horizon Blue Cross Blue Shield representative at the meeting. The vendor has become a target of ire from unions after it failed to deliver savings from under a care navigation contract that was expected to cut costs by 3.5% this year.
“This is the body that, by statute, has the authority for contracts and negotiating, not Aon, not the Division of Pension and Benefits, not even the treasurer,” Burdge said. “It’s this commission, so how is it that our vendors can’t appear here when that has been the past practice, year after year after year?”
They raised other complaints on timing, contending the increases — announced in July — were fast-tracked to approval.
State officials, meanwhile, have said rates must be approved by mid-September to prevent conflicts with the state’s open enrollment period, which begins Oct. 1.
The administration’s representatives on the commission also denied any departures from past process.
“For the record, I don’t believe there’s been any change from prior years in terms of how this is handled, with the exception of the fact that there’s almost been a more dynamic discussion with more information provided directly from the vendors,” Schimmel said.
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