Political analysts and union leaders are urging state lawmakers to curb escalating hospital prices amid recent double-digit increases in insurance premiums for state employees.
According to a report released Wednesday by New Jersey Policy Perspective, a liberal think tank, state insurance programs could pay hospitals more than $1.2 billion annually over the actual cost of care for people covered by the state insurance programs for government employees and school workers.
By “curbing high hospital prices, state legislators can make health care more affordable for patients, public servants, and state and local governments,” wrote Brittany Holom-Trundy, a senior policy analyst for New Jersey Policy Perspective.
The report was released during the annual League of Municipalities meeting in Atlantic City, when four of the state’s largest unions, along with New Jersey Citizen Action, a consumer advocacy group, and the political group announced the formation of the Coalition for Affordable Hospitals.
State legislators should explore “ways to contain the costs associated with hospital pricing, such as rate caps and reference-based pricing,” according to the New Jersey Policy Perspective report. Reference prices tie the price of hospital care to a standard, such as B. The rate paid by the state Medicare program.
According to the report, hospitals in New Jersey currently receive, on average, 2.3 times the Medicare rate and 1.5 times the “commercial breakeven rate” for care for people covered by the state programs.
The call for price controls is the latest salvo in a debate that began in July, when pay increases for public employees became public. Members insured by local and county governments and schools face the largest increases – in some cases more than 20%. Mayors and county officials have said the unexpected spikes will blow their budgets.
The coalition announced Wednesday is joined by the Communications Workers of America, the New Jersey Education Association, the New Jersey Police Benevolence Association and 32BJ SEIU.
More:How badly are taxpayers and public workers in NJ being hit by increases in the health plan?
Nearly 54,000 fewer people are enrolled in state health programs for public employees — the State Health Benefits Program (SHBP) and the School Employees’ Health Benefit Program (SEHBP) — than in 2015, Holum-Trundy wrote. But the cost has increased by about $417 million.
“Hospital rates account for a significant portion of rising insurance costs,” the report said, and there is “little standardization of hospital rates paid by insurance plans.”
Legislatures should “better regulate and lower high hospital rates,” she wrote, because doing so would create savings for both public employees and the taxpayers who fund the SHBP and SEHBP.
“To put New Jersey on a path to a more equitable future, the state must not simply cling to one-off band-aids like band-aids and continue to increase premium costs for public employees and state and local governments,” the report states.
In recent months, Republican lawmakers have accused the treasurer of lying during testimony before lawmakers and requested subpoenas for more information about the increased health insurance rates.
They claim the Murphy administration knew more about the big raises than Treasurer Elizabeth Maher Muoio admitted during budget hearings earlier this year. But Muoio, in a letter to Republican Senate leaders, countered that “any allegations of a lack of transparency are manifestly false” because this year, as in previous years, the Legislature received thousands of pages of budget-related documents .
Typically, members of the state’s plan draft committee discuss and draft what is covered and how, and then approve the plan. The State Health Benefits Commission is mandated by law to annually determine the premiums for plans within the program.
These rate increases were not released until July when the rate renewal report was released as the commission prepared for the vote. Local and regional labor organizations continue to push for rate hikes. The plan covers more than 816,000 public employees nationwide, both active and retired.
Five government employees’ unions have reached agreements with the Murphy government that require them to pay just 3% more – with taxpayers picking up an 18% increase. The same deal was not made for the local and regional staff in the plan.