Gov. Phil Murphy on Thursday said he doesn’t want big health insurance premium increases for public workers to “become an annual event” and called a last-minute move to ease a bit of the pain for some of those workers “a fair deal.”
A New Jersey health board on Wednesday approved rate hikes for health plans that cover more than 800,000 public workers. The vote calls for boosts in premiums on state health plans by about 21%, and local government plans by nearly 24%.
After Wednesday’s vote by the State Health Benefits Commission, five labor unions issued a joint-statement saying they had reached an agreement with the Murphy administration that will limit the increase on state employee contributions to 3%, shifting the rest of the financial burden to the state.
As part of the compromise, state employee co-pays for specialists will double from $15 to $30 and co-pays for urgent care will increase from $15 to $45.
Murphy, in response to questions from a reporter on Thursday, said reaching an agreement with the unions representing state employees wasn’t easy, but “all parties felt like this was … a fair deal.”
The agreement does not apply to local governments, which can pay as much as 70% of the total premium for employee health benefits. And New Jersey taxpayers could end up feeling the pain if local governments can’t find a way to mitigate the increased costs.
Murphy on Thursday said he looked forward to working with local governments and union leadership that represents local employees, but added that his administration will need help to find a solution.
“We don’t want to live through this again, and we want to do everything we can,” Murphy said at an unrelated event in Newark. “Again, we can’t do it alone. We’ll need the Legislature, we’ll need other partners to try to deliver relief.”
Murphy said a post-pandemic surge in demand for health care services, coupled with rising costs, was to blame for the rate hikes, and he reiterated that it was a nationwide issue not unique to New Jersey.
But the size of the rate hikes are about three to four times higher than average increases in other states, and union leaders have repeatedly asked the administration to explain why New Jersey is such an outlier.
Senate Republican leader Steven Oroho, R-Sussex, and Senate Republican Budget Officer Declan O’Scanlon, R-Monmouth, on Thursday blasted the Murphy administration’s “secretive” move to raise premiums, as well as only finding relief for state workers.
“It is perplexing that they have bailed out State employees without first identifying real savings,” the Republicans said in a statement. “And it is beyond belief that they are ignoring property taxpayers and local employees including police and firefighters who worked throughout COVID and have suffered enough.”
Murphy on Thursday said that “there’s no question this is sticker shock, it’s painful.” And he said his administration is ready to work with stakeholders to find long-term solutions.
“We don’t want this to be an annual event. We want to find solutions that have a lasting element to them, and I’m confident over time we can,” Murphy said. “I look forward to working with the other parties to try to figure out something going forward at some point with the local employees.”
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Derek Hall may be reached at [email protected]. Follow him on Twitter @dereknhall.