Increased Healthcare Costs Challenged By Madison Council

MADISON, NJ — The Madison Council recently passed a resolution opposing proposed rate increases to state health benefits under proposals under consideration by the State Health Benefits Commission during its last council meeting.

Under the new proposals, hundreds of thousands of public employees, early retirees and school employees in New Jersey could face rate increases of up to 24 percent for health benefits. "They have rolled out the potential increases of above 20 percent, which is certainly substantial," Mayor Bob Conley said.

According to John Donnadio, Executive Director of the New Jersey Association of Counties, rate increases being considered include a 24 percent increase in medical and a 3.7 percent increase in pharmacy benefits for active public workers, as well as a 15.6 percent increase in medical and a 26.1 percent increase in pharmacy benefits for public workers who retired before the age of 65.

According to the passed resolution, such proposed exorbitant rate increases will fall on local property taxpayers as well as local public employees at a time of record inflation; and the proposed premium increase for most active employees will take thousands more out of their paychecks annually and lead to huge costs for local governments, resulting in higher property tax bills for struggling families.

While double-digit increases in the state health care plan are problematic and unsustainable, increases in the NJ School Employees' Health Benefits Program (NJEHP) are especially concerning for local school boards.

According to the New Jersey School Board Association, employees enrolled in Chapter 44 pay a percentage of their salary toward their health care, rather than a percentage of the premium, as was the case with Chapter 78.

As a result, employers will bear nearly all of the costs associated with any increase in NJEHP premiums.

"NJSBA believes that the proposed premium increases are unacceptable and must be rejected," said Dr. Timothy Purnell, executive director of NJSBA. "Should they go through as is, districts will be forced to make incredibly difficult budgetary decisions that could result in cuts to critical educational programming, services and staff. At a time of record inflation, every action must be taken to bring the premium adjustments down to a more acceptable level."

According to the resolution, Madison officials are calling on the State Health Benefits Commission to reconsider the rate increase and strike a rate increase that is appropriate in the current economic conditions.

The increases were originally scheduled to be approved by state health boards on July 25, but the vote was postponed due to public outrage from local governments, labor leaders and state lawmakers from both parties.

A new date for the meeting has yet to be set.