NJ public health benefits costs could see another massive increase

💲 Health benefit costs for public workers could see double-digit increases

💲 Premiums for local public workers rose by 20% in 2022

💲 Report showed more public workers using weight loss drugs

TRENTON — Health benefits costs for public workers could jump by double digits for the second time in recent years, state treasury officials recently said before the Assembly Budget Committee.

State Treasurer Elizabeth Muoio pointed to a mid-year report from state actuary Aon. Treasure officials said it showed increases in emergency procedures, same-day surgeries, and a surge in prescription use — including weight loss prescriptions.

"While those mid-year reports alone don't determine what the rate is going to be, the indications are there will be an increase. And it could be a significant one. So, everybody should pay attention to those reports," Muoio said.

While health benefit rates are likely to increase, it's "too early to speak to specifics," said Treasury spokesperson Danielle Currie. She said new rates would be set this summer and take effect Jan. 1, 2025.

How big is a "significant" increase?

How much health premiums go up depends mostly on reports outling healthcare trends, according to Currie.

The increase could reach the double-digits, according to John Megariotis, acting director of the pension and benefits division.

"We are seeing trends that are looking at increasing rates. We could see them in the double-digit area but it's too early to tell," said Megariotis.

Part of the increasing cost is that public workers are using services that cost more. But weight loss drugs and surgeries aren't entirely responsible.

"The main driver of those cost increases is medical inflation – that is, the cost of the services and procedures that hospitals and providers are charging both in NJ and nationally, including delayed effects of inflation of longer term contracts, and residual pent up demand for non-emergency surgeries," said Currie.

Second major health benefits increase since 2022

The possibility of double-digit increases raised concerns in the budget committee that rates could increase by around 20% again.

The significant premium increases for local public workers were approved in 2022 by the State Health Benefits Commission for 2023.

Those rate increases spurred protests at the Statehouse Annex, which helped to secure a 3% cap for state worker contributions in 2023 in exchange for higher copays.

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