Say Exodus of Local Governments Could Be Disastrous for State Benefits Health Plan
Senator Michael Testa and Senator Declan O’Scanlon said a decision by the City of Trenton to leave the State Health Benefits Plan (SHBP) for a private insurer to avoid millions in health care premium increases could signal a coming exodus of local governments from the state plan.
Sen. Michael Testa and Sen. Declan O’Scanlon said a decision by the City of Trenton to leave the SHBP for a private insurer to avoid a 23% premium increase could signal a coming exodus of local governments from the state plan. (©iStock.com)
The senators said a 22.8% rate hike this year for local governments in the SHBP was driven by the Murphy administration’s failure to achieve promised savings that had been highly trumpeted and its refusal to consider cost-saving proposals offered by public employee unions, towns, and counties.
“You know Governor Murphy’s mismanagement of SHBP rate hikes is really bad when the often dysfunctional city government in Trenton looks smart for jumping ship from the state plan,” said Testa (R-1). “More local governments are likely to realize they can achieve significant savings for both their workers and property taxpayers by shopping for health insurance in the private market. Nobody who can avoid it will pay the 23% premium increase pushed through by the Murphy administration.”
According to NJ.com, the City of Trenton says it will save more than $4 million annually by switching from the SHBP to Aetna.
Local governments can choose to provide health insurance for their employees through the state plan or through private insurers.
Trenton follows other local governments, including Camden, that have started to announce their shift to private insurers to avoid the massive SHBP rate increases this year for municipal and county workers.
The senators warned that an exodus of local governments from the SHBP could be disastrous for those that remain.
“The Murphy administration failed to be transparent about the huge increases for months before they were announced and they refused to accept any of the suggestions from towns, counties, and worker unions to cut costs and lessen the blow,” added O’Scanlon (R-13). “We’re now likely witnessing the beginning of a mass exodus of local governments from the SHBP that could lead to a total collapse of the system. Some towns with worse experience ratings might not have an option to leave, and they’ll be hit with massive, snowballing rate increases as others that are more attractive to private insurers are offered lower rates to leave the state plan. SHBP rates for towns and counties that remain in the plan will go up so high that nobody will be able to afford them without huge property tax increases. It’s a total mess that Governor Murphy could have and should have prevented.”