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Report: NJ Health Care Costs for State Workers Among Costliest in U.S.

8-13-14

By Christie Duffy
Correspondent

Health benefits for state workers in New Jersey are among the costliest in the nation.

That’s according to a new report from the Pew Charitable Trusts and the MacArthur Foundation.

New Jersey is ranked number three for the highest average premium cost per employee, at $1,334. That’s more than double the lowest premium. South Dakota averages $580 per state worker.

The report’s research also shows that New Jersey sits about 27 percent above the U.S. average — $963.

According to the report, most state employees pay for almost 20 percent of their premium cost while New Jersey state employees are listed as paying only 5 percent of the cost of their health plans.

But the largest state workers union disputes the findings.

“That’s not true. Employees pay between 19 and 35 percent of the costs for the premium. And that’s a very big difference,” said CWA Area Director Hetty Rosenstein.

Effective this year, state employees in New Jersey began paying between 3 and 35 percent of their premium costs, according to the treasury.

The researchers behind this report say they scaled their numbers off of a state worker salary of $50,000 and a health care plan similar to a platinum level plan on the health exchange marketplace.

Rosenstein says if the state engaged in more collective bargaining, negotiated bulk rates for things like pharmaceuticals and created its own exchange rather than depending on the federal insurance marketplace, costs here would be lower.

“The real story is that health care in New Jersey is extremely expensive. It’s the most expensive health care in the country,” Rosenstein said.

The president of a non-profit representing commercial plans in the state says the biggest driver of costs are New Jersey’s hospitals.

“One thing that’s different about New Jersey is we have some great hospitals but we really do have a handful that just charge an awful lot of money, especially in Hudson County,” said New Jersey Association of Health Plans President Wardell Sanders.

Assembly Republican leader Jon Bramnick says the report demonstrates the need to create a strategic plan for the state. He says, “Trying to solve the problem one law at a time does not work. The governor has created a panel to review pensions and we need to follow that lead by establishing the four committees proposed recently.”

Last week, Gov. Chris Christie created a panel to address rising pension and benefit costs. New Jersey Democrats didn’t respond to our request for comment today.

Researchers behind the report say higher spending in states like New Jersey doesn’t necessarily mean more waste. But they say by comparing the 50 states, policy makers can see where and how others may have slowed the growth of health care spending.