Proposed Premium Hikes Up to 24% Will Squeeze Local Budgets, Drive Property Taxes Higher

Senator Steven Oroho (R-24) and Senator Declan O’Scanlon (R-13) have introduced legislation to form a special legislative committee with subpoena power to investigate massive proposed premium increases for the health plans that cover state government, local government, and school employees.

Sen. Steven Oroho and Sen. Declan O’Scanlon have introduced legislation to form a special legislative committee with subpoena power to investigate massive proposed premium increases for the health plans that cover state government, local government, and school employees. (©iStock)

“The proposed premium increases will impact hundreds of thousands of state and local government workers, teachers, and retirees who will see their health care costs soar if the proposal is adopted,” said Oroho, the Senate Republican Leader. “These higher premiums will also have a huge impact on school districts and local governments that pay a large portion of the total premiums for their employees. Any higher costs they pay will translate directly into higher property taxes for our families. We must investigate the failures that led to these catastrophic premium increases to develop an effective plan going forward.”

The measure, SCR-120, would create a special committee of the Senate and General Assembly entitled the “New Jersey Public Employee Health Care Program Costs Investigation Committee” to review proposed premium increases for the State Health Benefits Program (SHBP) and School Employees’ Health Benefits Program (SEHBP) for Fiscal Year 2023.

The legislation was drafted following calls by Republican leadership in the Senate and General Assembly for an investigation after it was revealed that premiums for active employees covered by the SHBP are set to increase by 24% this year, while those for school employees and teachers covered by the SEHBP are set to rise by 15.6%.

Similarly, SHBP retirees are set to pay an additional 15.6% for health care, while SEHBP retirees will pay 13.6% more.

The proposed legislative committee would also be charged with reviewing and investigating state contracts with Horizon and allegations published by Bloomberg that the Murphy administration squashed an attempt to recover $34 million paid to Horizon for a failed program to lower costs.

Horizon administers the health care plans for the hundreds of thousands of state and local government employees and retirees in New Jersey who are covered by the SHBP and SEHBP.

“It’s imperative that the Legislature investigate the proposed premium increases to understand the cost drivers since nobody else seems to be doing the job,” said O’Scanlon, the Senate Republican Budget Officer. “While some of the higher costs may be attributable to inflation or the pandemic, it’s almost certain that Murphy administration mismanagement and lax oversight of state contracts with Horizon play a substantial role. Our goal, however, isn’t to place blame. It’s to understand how we can lower the premium costs that will be paid by public workers, teachers, and taxpayers.”

The legislation is sponsored by all 16 members of the Senate Republican caucus.