Latest news with #StateHealthBenefitsProgram
Yahoo
22-05-2025
- Business
- Yahoo
N.J. public health plans are in distress — how would our governor hopefuls fix the mess?
New Jersey's would-be governors said competition, more oversight, and price transparency could pull the State Health Benefits Program out of a death spiral. (Dana DiFilippo | New Jersey Monitor) Riven by years of municipal departures, soaring premiums, and surging prescription drug use, the local government part of the State Health Benefits Program is on a path to complete collapse, and New Jersey's gubernatorial hopefuls differ on how to fix it. The plan, which in January provided health coverage to 56.2% of the state's local government employers and has repeatedly seen double-digit premium hikes in recent years, faces even sharper increases and will collapse absent wholesale changes to benefits, entry and exit rules, and governance, the Treasury warned in a report released Tuesday. Plans that provide coverage to local government face cumulative premium increases set to exceed 60% over the next four years and will likely collapse as more towns, authorities, and counties flee, the Treasury said. That collapse could leave towns with small or sickly workforces facing high rates in the private market. Because premiums under the local part of the State Health Benefits Program are paid largely by local revenue like property taxes — whether through withholdings from local government workers' salaries or directly from public coffers — spiking premiums stand to raise tax burdens at the local level. There are 11 candidates running in the June 10 gubernatorial primaries (Gov. Phil Murphy, a Democrat, can't run for a third term this fall). They presented disparate paths on how to control escalating costs under the state's public health plans, with some favoring increased competition, new drug pricing rules, or thinner plan requirements. 'We need more competition,' said former radio host Bill Spadea and former Assemblyman Jack Ciattarelli, both Republicans. On top of boosting competition, Republican candidates want to lower the number of public plans' coverage requirements as a method of controlling costs. Murphy in late 2023 signed a law to allow the state's public health plans to have more than one third-party administrator. Aetna has since joined Horizon Blue Cross Blue Shield of New Jersey in administering the state's self-funded public health benefits, but its entry was not expected to generate savings in the current fiscal year, with benefits unclear for out years, according to budget documents. It's not clear any other New Jersey insurers have the capacity to administer health benefits across the breadth of state. Aetna and Horizon were the only two bidders for contracts to administer the public health plans, a Treasury spokesperson said. Spadea and Sen. Jon Bramnick (R-Union) suggested reducing plan coverage requirements, allowing the state to offer cheaper, less fulsome coverage in a bid to lower premiums. 'Right now, we have insurance policies that mandate a whole bunch of different services. I want to bring in companies that have options where you can choose policies that have less mandated requirements than we require in New Jersey,' Bramnick said. In its report, the Treasury listed high-cost health care services among the primary driver of cost increases, alongside surging use of expensive medications, especially new weight loss drugs. It's not clear what services candidates would seek to limit or whether their plans would include a winnowing of existing health care plans. Treasury's report notes that most local government workers remain on older plans with generous benefits and high costs. Most candidates provided answers on how to control escalating costs in public worker health plans before the release of the Tuesday report that warned the plan had entered a death spiral. Newark Mayor Ras Baraka, Rep. Josh Gottheimer, and teachers union chief Sean Spiller — all Democrats — provided responses after its publication. Democrats' proposed solutions were more varied than their Republican counterparts. Some, like Jersey City Mayor Steve Fulop, backed increased competition, though Fulop also wants limits on hospital mergers. 'You have an increase in costs for New Jersey because you have this hospital monopoly as well, which has put a stranglehold on doctors,' Fulop said. 'I think that Trenton needs to be more aggressive in not allowing that consolidation within hospitals or them acquiring medical practices downstream.' Others favored boosting oversight of plan spending, targeting certain insurance middlemen, or broader changes like those the school workers' public health plan saw in 2020. Gottheimer and Rep. Mikie Sherrill (D-11) both suggested increased plan oversight, her through audits of the State Health Benefits Program and him through compliance reviews. The two also said they want greater regulation of pharmacy benefit managers, third-party firms that negotiate prescription prices on behalf of insurance providers and have been blamed for rising prescription drug prices. 'They've driven up pharmaceutical costs up to 10 times,' Sherrill said. Baraka backed reference-based pricing, which would tie prices for some services or drugs to those charged by Medicare. He also supports shifting some regulatory authority over the public plans to the Department of Banking and Insurance. 'We need reference-based pricing to bring costs down and increase transparency in this state and we need to lay the foundation for a true public option — one that prioritizes people, not profit,' the mayor said. Treasury's report partly blames the structure of plan design committees for rising costs within the State Health Benefits Program, saying those bodies, whose membership is split evenly between management and labor, had entrenched the status quo of expensive benefits. Ceding some authority to Treasury could lower costs, the report says. At present, only the committees or the Legislature can change plan designs by, for example, changing copay levels, shifting reimbursement rates, or eliminating specific insurance plans within the program. The State Health Benefits Commission and its schools counterpart set premium levels. Spiller and former state Sen. Steve Sweeney highlighted past reforms to state plans, including the 2020 changes that moved most school workers enrolled in the School Employee Health Benefits Program to cheaper public plans. They also suggested reverse auction rules that see pharmacy benefit managers bid each other down for state contracts. 'When I did the reverse auction on pharmaceuticals, it saved half a billion dollars a year, so that's one of the lower-hanging fruits,' Sweeney said. 'The other one is sitting down with the unions to see where we can negotiate and reduce healthcare costs like we did with the (New Jersey Education Association).' The 2020 changes, which came when Spiller was the teachers union's vice president, succeeded in providing some relief to public school plans, but Treasury's report warns the dynamics that sent the local part of the State Health Benefits Program into a death spiral could do the same for the school workers' plan. Multiple Democrats, including Gottheimer and Baraka, said they want more transparency over hospital pricing, while Spiller blamed hospitals' political heft for public plans' present distress. 'We've seen it where we can make changes to some of the plan's structures. They refuse to do it. Over and over, they refuse,' he said. 'And let me tell you, I am sure it is because the biggest donors in New Jersey politics are the hospitals, the insurance companies, their brokers, all the other folks. We never get the change we need.' Dana DiFilippo and Sophie Nieto-Muñoz contributed. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
Yahoo
20-05-2025
- Health
- Yahoo
Local government workers' health plan enters ‘death spiral'
Sharp premium increases and waning enrollment have put the local government part of the State Health Benefits Program on a path to the grave. (Dana DiFilippo | New Jersey Monitor) New Jersey's health benefits plan for local public workers, harried by years of sharp premium increases and a dwindling subscriber pool, has become 'structurally unstable' and 'financially unsustainable,' the Treasury said in a report released Tuesday. The purely informational report is the latest in a series of dire warnings, now outright alarms, over the future of the public worker health plan, which has faced an exodus of municipalities amid repeated double-digit premium hikes approved in recent years. 'The plan's very high actuarial values, a depleted and now insolvent cash management margin reserve … and a static governance structure have created a self-reinforcing loop of premium increases and employer exits — what actuaries commonly refer to as a 'death spiral,'' the report says. Health insurance plans function by diluting risk, using healthy subscribers' premiums to underwrite medical care for sicker members. But as premiums under the local part of the State Health Benefits Program rose, towns and cities with younger, healthier workers fled to private options. As a result, risk and premiums continued their climb, and municipalities continued their departures. The number of local governments participating in the plan fell from 768 in 2021 to 689 at the end of March. In January, only 56.2% of local governments were participating in the program, and the municipalities that return to the plan after facing higher premiums under private options could push costs up further as higher risk workers return to the public pool, driving up overall risk and costs. Rising prescription drug usage — especially around new and trendy weight-loss drugs — plus the growing use of high-cost services and inflation have contributed to the plan's rising costs, the report said. The state's actuary has said premiums for the local government part of the program would need to rise by 19.5% to stabilize its reserve fund, on top of separate hikes to account for increased prescription and medical benefit usage. A law signed last November to keep local government workers' plan solvent by lending from state workers' plan could bring the floor for premium increases up even higher. The local part of the State Health Benefits Program owes state workers' plan roughly $120 million, and it won't have the money to repay that debt without a mid-year premium hike. By law, those loans must be repaid within 365 days of being taken. 'There could be a 26.5 percent 'floor' to 2026 premium increases … in addition to the 'regular' medical and prescription drug trend rates,' says the report, adding increases to rebuild the plan's reserves could be phased in over multiple years. Cumulative increases from 2026 through 2029 are expected to 'significantly exceed' 60%, according to the report. Those would add to the 59% cumulative increase it saw between 2022 and 2025. 'Without meaningful intervention, current trends in enrollment, utilization, and health care cost inflation will continue to drive unsustainable premium increases,' the report says. 'The situation is not one of temporary imbalance — it reflects deep-seated structural challenges that, if unaddressed, will further destabilize the plan.' The high rates at which the plans cover medical expenses have also contributed to their price. Nearly all, 95%, of local government workers enrolled in the program are on plans with actuarial values of 97%, meaning workers are responsible for paying just 3% of their health care expenses through copays, deductibles, or coinsurance. The School Employees Health Benefits Plan faces similar distress, the report says. That program, which offers health benefits to school board employees, has escaped most of the large premium hikes faced that hit local government workers — between 2022 and 2025, their premiums rose by 44% — and saw some temporary relief from 2020 changes that moved most of its enrollees to more cost-effective plans. But that plan is facing price pressures for the same reasons as the State Health Benefits Program, and the 2020 changes bar the committee tasked with oversight from tweaking benefits or plan rules in response to rising costs until 2028. 'The SEHBP now faces significant financial and actuarial risks and may be on a similar trajectory as SHBP-LG — potentially entering a death spiral in the medium-term or experiencing serious affordability issues for its members,' the report says. Because state workers cannot leave their public health plan, the state part of the State Health Benefits Program remains stable, but it will still require premium increases to meet rising costs, the report says. Plan design changes could partly defray rising costs but 'even the most aggressive plan design changes will likely not be enough to reverse the systemic unraveling now underway' and broader changes are needed to stabilize the public health benefit programs, the report said. Those changes could include a lower actuarial values — meaning enrollees would pay a greater share of their medical costs — as well as waiting periods for municipalities to reenroll in the State Health Benefits Program after leaving and more rule-setting authority for the Treasury. 'Failure to reform will lead to ongoing price increases and employer exits, and eventually a complete and disorderly collapse of the plan,' the report says. Alternatively, the state could unwind the local part of the program and leave local governments to find health coverage through group insurance funds while the plan phases out. 'Phasing out the plan in an orderly, supported, and equitable manner will mitigate further destabilization and align the State's policy approach with prevailing market conditions and local preferences,' the report says. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
Yahoo
25-04-2025
- Politics
- Yahoo
Montclair health benefits matter raises questions about Democrat running for governor
As Sean Spiller campaigns for governor, his record as mayor of Montclair has received scant attention. (Illustration by Alex Cochran for New Jersey Monitor/Spiller photo by Dana DiFilippo) There's a years-old scandal involving one of our candidates for governor and no one's talking about it. Well, almost no one. State Sen. Mike Testa brought it up during a recent budget hearing with Attorney General Matt Platkin. Testa, a Cumberland County Republican, asked Platkin why his office prosecuted the GOP former mayor of Wildwood for fraudulently obtaining town health benefits for his part-time city job — New Jersey law says benefits are meant for full-time workers only — yet has not filed similar charges against a Democratic ex-mayor of Montclair and current gubernatorial candidate accused of the same thing. Testa didn't name names, but he meant Sean Spiller, president of statewide teachers union the New Jersey Education Association. You may know him from the tens of thousands of vote-for-Spiller flyers that have been showering the state since the fall. 'That case never reached a criminal court, while the case in Wildwood was presented to the grand jury not once but twice, and has been pursued aggressively. You've recused yourself from the Montclair investigation, which stopped completely dead in its tracks. Why such a disparity between those two cases?' Testa asked Platkin. Platkin mostly declined to answer questions about the Montclair matter since he's recused from it — Platkin lives in Montclair — and deferred questions about it to the unnamed person in his office who was or is handling that investigation. Platkin said he doesn't know its status. I don't know why Spiller's Democratic rivals — there are six Democrats in the race to succeed Gov. Phil Murphy — have not needled Spiller about this particular matter in advance of their June 10 primary. But the Montclair story is worth examining. Spiller won election as the Montclair mayor in May 2020 after serving on the town's council for two terms. The town had recently joined the State Health Benefits Program, which since 2010 has barred part-time employees from receiving health benefits. Montclair's mayor and council members are part-time employees but were given the green light to receive health benefits because a town official said they worked the requisite 35 hours a week, according to allegations raised in court by Padmaja Rao, the town's CFO. Rao alleged in a 2022 whistleblower lawsuit that an outside auditor told her Montclair's officials could not accept health benefits per state law, and when she told other town officials this, she became the victim of harassment. Spiller did not accept most of Montclair's health benefits, but he did sign up for its dental plan and take about $5,000 annually from Montclair taxpayers in exchange for not taking medical benefits, according to Rao's lawyers. The $5,000 waiver is intended to encourage town employees to save taxpayers money by, say, remaining on their spouse's health plan — not to fatten the wallet of its already well-paid mayor. The New Jersey Education Association's IRS filings show Spiller's 2022 salary was $291,289, plus $106,217 in other compensation. Like Testa, Nancy Erika Smith, Rao's attorney, is curious about why the ex-Wildwood mayor was charged with a crime but no one in Montclair was. 'I don't know what the excuse is,' Smith said. Smith noted that Montclair elected officials, including Spiller, signed certifications swearing under oath they worked 35 hours a week so they could qualify for benefits or the $5,000 waiver. Spiller also worked 40 hours a week for the teachers union, per the union's IRS filings, meaning he was clocking 75-hour work weeks. Busy guy! During Spiller's deposition in the Rao case, Smith asked Spiller how long he worked per week, but Spiller cited his Fifth Amendment right not to incriminate himself — and proceeded to plead the fifth more than 400 more times during that deposition. I asked Spiller's campaign if he would chat with me about this. It sent a statement from Spiller trashing Testa's comments to Platkin as 'yet another MAGA fueled diatribe in Trenton' and said his assertions and those by 'an interested attorney have no bearing on the facts.' (Testa's response: 'Thou doth protest too much.') I also asked if Spiller would move to change the law if elected governor to allow part-time public workers like elected officials to collect health benefits. They are denied benefits under a 2010 law, championed by then-Gov. Chris Christie, who said it would lower costs for taxpayers. 'I have always stood for, and run on, Healthcare as a right for everyone and not a privilege,' Spiller's statement says. 'With countless folks and their town and county legal counsel all over the state — including Essex County — working to interpret current law, we need a Governor who will fight for universal Healthcare for every New Jersey resident. And that's exactly what I'll do.' Awfully slippery. The question was about part-time mayors foisting the cost of their health benefits onto taxpayers even if they have full-time jobs that could provide those benefits, and the answer was a progressive call for universal health care. Spiller would fit in well in Trenton. As for Peter Byron, the former Wildwood mayor, he admitted in September that he defrauded the State Health Benefits Program, among other crimes. Prosecutors with the state Attorney General's Office recommended a three-year prison term. Rao settled her whistleblower lawsuit with Montclair last May for $1.25 million. And Spiller declined last year to seek a second term as Montclair's mayor. 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