In a letter to members of the New Jersey State Health Benefits Commission prior to their meeting to consider astronomical increases in health benefits costs, Senator Holly Schepisi urged them to “think ‘outside of the box’ to evaluate other options rather than creating an additional fiscal burden on those already struggling.”

In addition to active state and local workers who could lose $1,500 per year or more under the planned cost structure, Schepisi noted her significant concerns about the impact of the increase on “local governments and school districts that shoulder a disproportionate share of the benefit costs.”

“Higher premiums will break the backs and the budget of local governments and school districts across the state that already pay a significant share of premiums for their employees,” Schepisi wrote. “More importantly, local governments will have to face slashing personnel or programs in order to absorb these unintended increases into their upcoming budgets.  For a municipality with 70 governmental employees the additional proposed cost may result in over $500,000 in unanticipated expense.”

Schepisi emphasized that the untenable increases “should have been mitigated by an offset of pandemic monies received by the State coupled with more effective negotiations with insurers and enforcement of contracts that require Horizon Blue Cross Blue Shield to provide more transparency on provider costs and quality.”

The full text of Schepisi’s letter is below:

Dear State Health Benefits Commission Members,

I am writing to express my significant concerns about the impact of the proposed healthcare rate increase on municipalities, counties, schools, government employees and retirees, and taxpayers across the state.

I request this be read into the record of today’s discussion prior to a vote.

The heft of the planned increases is fiscally devastating during a time that everyone is stretched thin, not only for state and local government employees and retirees who could see their take-home pay slashed by as much as $1,500 or more per year but also for local governments and school districts that shoulder a disproportionate share of the benefit costs.

Higher premiums will break the backs and the budget of local governments and school districts across the state that already pay a significant share of premiums for their employees.  More importantly, local governments will have to face slashing personnel or programs in order to absorb these unintended increases into their upcoming budgets.  For a municipality with 70 governmental employees the additional proposed cost may result in over $500,000 in unanticipated expense.

These increasing costs will hit hard at taxpayers who will inevitably see reductions in services they depend on as well as rapidly increasing taxes and fees at a time that most cannot afford it.

The untenable increases should have been mitigated by an offset of pandemic monies received by the State coupled with more effective negotiations with insurers and enforcement of contracts that require Horizon Blue Cross Blue Shield to provide more transparency on provider costs and quality.

I implore the members of this Commission to think “outside of the box” to evaluate other options rather than creating an additional fiscal burden on those already struggling.

In addition, we must insist on responsible fiscal management of state contracts like the one that would have allowed New Jersey to claw back millions of dollars from Horizon that the Administration refuses to enforce.

I have joined Senate Republican leader Senator Steven Oroho, Budget Officer Senator Declan O’Scanlon and every member of the Republican caucus to sponsor legislation, SCR-120, that would create a special legislative committee with subpoena power to investigate the Governor’s efforts to stop treasury’s enforcement of the contract with Horizon and review the proposed rate increases.

Today’s proposed increases proves our contention that an investigation is necessary to properly understand the factors igniting significant cost escalation.

New Jersey simply cannot remain on this current path. For the sake of tax-weary residents in every county, we need you to stop this financial bloodbath and find a more tenable resolution.

Sincerely,

Senator Holly Schepisi
District 39