Public workers face steep health insurance premium increases this year

💲 Gov. Murphy announces huge spike in insurance rates
💲 Popular weight loss drugs partly to blame
💲 Republicans blame mismanagement by Democrats

Gov. Phil Murphy has pandered to state and local government employee unions since he announced his first run for governor eight years ago. Their loyalty is being rewarded with a double-digit increase in healthcare premiums for the fourth year in a row.

Murphy announced on Wednesday that public employees will pay as much as 36.5% more for insurance coverage.

County and local workers will see the biggest increase (36.5%) with costs for state workers going up 21% and school employees 29.7%.

Over the last five years, premiums have gone up as much as 115%.

Hundreds of thousands of government employees will be impacted by the higher costs.

Weight loss drugs driving higher prices

The Murphy administration hired health insurance consultant AON to review employee coverage and identify what is driving costs higher.

Among the findings: The increased use and cost of weight loss drugs like Wegovy and Zepbound has been driving up the cost of prescription coverage.

AON also says employees and their families are using their health benefits more frequently, which is further driving up the costs.

Murphy and fellow Democratic legislative leaders announced plans to find $100 million in savings to reduce the cost of healthcare for government workers by the end of the year.

That would likely include a reduction in coverage and/or higher copays.

Local governments fleeing the system

County and local governments are not required to get health coverage from the state, and many have opted out of the system.

Dozens of towns and some counties have pulled out of the state plan after finding more affordable options to cover local government workers.

That is good news for those municipal workers, but bad news for those that remain.

AON says the local and county entities that remain contain an unhealthy pool of members and that is further driving up the costs for those who remain in the system.