Doing Something (Nothing) on NJ Health Care Costs

Per a press release from the governor’s office:

Governor Phil Murphy today announced that the Murphy Administration has reached a health care benefits agreement with labor groups, including the New Jersey Education Association (NJEA), a cost-cutting deal that will save the state and local governments nearly half a billion dollars ($496 million) in savings. The agreement includes $274 million in savings in the coming plan year for health care costs for public employees and retirees and another $222 million in year 2020 from the adoption of Medicare Advantage for both SHBP and SEHBP retirees and introduction of a new health plan focused on in-network care. The reforms were passed today through a committee-level vote on the Schools Employees’ Health Benefits Program (SEHBP) Plan Design Committee (PDC). The plan is scheduled for a final vote by the School Employees’ Health Benefits Commission (SEHBC) on Wednesday, September 19th.

According to an analysis this agreement between the unions and the politicians they bought will do three things:

16 responses to this post.

  1. Posted by Anonymous on September 18, 2018 at 1:28 pm

    Still Platinum for non Medicare eligibles but not for those on Medicare. Still unaffordable but I suspect you’ll see continued cooperation by the Unions with Murphy not Sweeney.


  2. Posted by boscoe on September 18, 2018 at 3:00 pm

    The vast bulk of these “savings” will probably go to school districts, not the state. State retirees and municipal/county retirees age 65+ who are in the State Health Benefits Plan are already in Medicare Advantage plans. There was a big kerfuffle several years ago when the NJEA essentially boycotted the group that would have had to approve the same thing for teachers and administrators, so that there was never a quorum to vote. Now this is being changed, but it looks like they had to “bribe” the NJEA to go along with it by reimbursing first $250 of copays and additional for using in-network services. I’m having trouble seeing the purported state savings materialize unless the drug formulary is severely cut back and Aetna comes in with a lowball bid to run the program, which is now run by Horizon BC/BS.


  3. Posted by rdquinn on September 18, 2018 at 3:17 pm

    How does the state force retirees to join Medicare Advantage which is typically closed Network managed care. That is a beneficiary decision. All the state can control is the supplemental coverage. What am I missing here?


    • Posted by Anonymous on September 18, 2018 at 3:18 pm

      It’s the only coverage offered Medicare eligibles retirees. Of course you can deny coverage and purchase gap insurance elsewhere but?


      • Posted by rdquinn on September 18, 2018 at 5:26 pm

        Makes no sense. The state has nothing to do with Medicare and Medicare Advantage is a total replacement for Parts A and B. It’s not supplemental to standard Medicare which is what employer coverage would do. Besides the highest state costs are for early retirees who are pre Medicare age. Something is not right.


        • I agree though, not knowing much about Medicare, I didn’t want to say. Suspicious though that the State retirees had this Medicare Advantage for two years and I did not see any references to how much was saved over those two years.


          • Posted by Anonymous on September 18, 2018 at 6:12 pm


            Do you think Christie had any intention of putting any health care savings into the pension funds?

          • Posted by rdquinn on September 18, 2018 at 6:58 pm

            I’m trying to figure out how the state saves money by retirees electing MA. And I wonder if they will tell retirees they may have to switch doctors, but I still don’t understand how the state saves.

          • The Medicare for Dummies book I got devotes 10 pages to choosing between regular Medicare and Medicare Advantage. Current breakdown is about 70/30. Unless that MA plan that the state will set up limits out-of-network use (and the unions will likely have a lot of say in the setup) I suspect most retirees won’t see a difference.

          • Posted by rdquinn on September 18, 2018 at 9:27 pm

            If the state sets up a MA plan then how does it get retirees to join. It can’t force them. Virtually all MA plans have restricted networks which is how they control costs to the extent they do. Something is missing to this puzzle.

          • Posted by Anonymous on September 19, 2018 at 7:11 am

            Of be nice to know for sure.

  4. Posted by Thom on September 18, 2018 at 3:28 pm

    It’s a continuation of the scam committed by the NJEA and other public unions against taxpayers with the complicity of state Democrats and feckless Republicans who fear the unions more than they respect the taxpayers. See NJ Pension and Benefit Reform Commission report for real reform proposals that save billions


  5. Posted by geo8rge on September 18, 2018 at 4:33 pm

    “administered by Aetna or Horizon.” Nooooooo.

    Gov. Murphy, call your bud Jamie Diamond. It’s still not too late to get in on Amazon Berkshire Hathaway JPM heathcare venture.

    Atul Gawande starts first day as CEO of Amazon, Berkshire Hathaway and JPMorgan health venture


  6. Posted by Anonymous on September 19, 2018 at 9:02 am

    No reason to believe they can’t bury the hatchet (question is where) and agree on meaningful P&B reform?


  7. Posted by skip3house on September 19, 2018 at 1:20 pm

    From Twitter…..
    New Jersey Policy Perspective and Michael Symons follow
    ‏ @path2progressnj
    5h5 hours ago

    An effective way of reducing the unfunded obligation of the pension system is to dedicate state assets to the pension system. Last year, the state moved funds from the State Lottery to state pension funds, resulting in billions in long-term savings #NJPath2Progress


    • Posted by Tough Love on September 20, 2018 at 7:32 am

      It didn’t save taxpayers one dime. Smoke & Mirrors …………. as usual

      The expenses that the lottery proceeds paid for in the past is STILL paid, just out of general budget funds AND the amount of money that WOULD HAVE been contributed into the pension funds from general budget revenue was REDUCED by the amount of the expected lottery revenue deposited into the pension Plans.


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