TRENTON — Remember last week’s good news for taxpayers about healthcare premiums for active and retired workers staying level or going down in 2018?

It’s a different story this week when it comes to teachers and school spending.

Days after one state Treasury Department panel voted to not increase health-care premiums in 2018 for current state and local public workers and to cut rates for retirees, its companion that oversees the education health plan approved an overall 8.5 percent rate increase.

That includes a 13 percent increase for current workers and a nearly 16 percent hike for people who took early retirement. Both represent the biggest increases in five years.

Rates will be down almost 6 percent for Medicare-eligible retirees, who benefit the most from the savings that result from changes in how prescriptions are bought.

Between state, local and school employees, health-care costs through the state plans are forecast to reach $7 billion in 2018 – $4.5 billion for current employees and $2.5 billion for retirees.

Public workers pay for a portion of their healthcare premiums, but the government agency that employs them picks up a majority of the cost.

Department of the Treasury spokesman Will Rijksen said the difference is that the committee that designs the School Employees’ Health Benefits Plan has not adopted cost-saving measures that were approved by the State Health Benefits Plan for other public workers.

“Last year, the SHBP Plan Design Committee elected to move forward with a benefits package that included minor changes to the prescription drug plan and reduced reimbursement for certain out-of-network services. This removed excess costs to the system with no cost-shifting to members and has resulted in no premium increases for 2018,” Rijksen said.

“Conversely, for the second year in a row, the SEHBP PDC decided that it would not implement these beneficial cost-saving measures,” Rijksen said.

For 2017, current teachers’ premiums had gone up 8.4 percent, compared with a 3.4 percent increase for state workers and a 0.1 percent drop for local workers covered by the State Health Benefits Plan.

The increases come despite the state beginning to use an online reverse auction for buying prescription drugs, a change that the New Jersey Education Association estimates will cut costs by more than 10 percent, saving $1.6 billion over three years.

 


New Jersey: Decoded cuts through the cruft and gets to what matters in New Jersey news and politics. Follow on Facebook and Twitter.


Michael Symons is State House bureau chief for New Jersey 101.5 and the editor of New Jersey: Decoded. Follow @NJDecoded on Twitter and Facebook. Contact him at michael.symons@townsquaremedia.com.