Press of Atlantic City: $496M Health Benefits Savings is Overdue Cut In NJ Wasteful Spending

Gov. Phil Murphy announced last month that his administration had reached a deal on government employee and retiree health benefits with public worker unions that would save taxpayers an estimated $496 million through the end of 2020. The pro-union governor said it demonstrates what negotiating in good faith can achieve, as opposed to the adversarial bargaining approach of Gov. Chris Christie’s administration.

A close look at the changes and savings, however, shows that most are the product of a bargaining process established by a 2011 law enacted by the Democratic Legislature and Christie. And since they largely maintain current benefit levels at a lower cost, the changes should have been made by the state long ago.

Since the 2011 law, benefits changes have required a consensus on panels with equal representation from labor and management. Last year, a deal was reached that is expected to yield $1.6 billion in savings over three years, while resulting in no premium increase for workers. All that was needed was a change to having pharmacy-benefits managers compete on price, a no-brainer.

Read the full editorial here.