Newark faces ‘astronomical’ health insurance hikes for city workers

NEWARK, NJ – Officials say Newark is facing an “astronomical” rise in health insurance rates for city employees, which could cause local taxpayers to suffer.

Based on a September 14 state health benefits commission vote, some New Jersey municipal governments will see a 23 percent increase in the health insurance rate, while state employees will see a 21 percent increase. The increased rates will affect the health care plans of more than 800,000 local and state government workers.

On Friday, Newark Mayor Ras Baraka issued a statement attacking the price increases, which are “neither controlled nor controlled” by the city.

The mayor said municipal officials are trying to find an alternative solution.

“At a time when health insurers are making record profits, plans to increase health care costs for New Jersey public employees are a betrayal of the thousands of hard-working Newark municipal family members already impacted by the rising cost of living,” Baraka said.

“The city may have to bear these expenses, which would put pressure on our taxpayers,” Baraka added.

The mayor continued:

“Adding these costs will only lead to additional financial hardship for these dedicated workers, retirees, taxpayers and their loved ones. While we are disappointed with this decision, my administration is working nonstop, around the clock, to find viable solutions that will protect our workers from this massive increase.”

With open enrollment fast approaching, and the state’s Health Benefits Plan (SHBP) — of which Newark is a member — “dramatically increasing rates,” the City of Newark faces an attempt to mitigate these “astronomical increases” to its benefits, Baraka’s office said, adding that employees, retirees and their dependents are in a state of emergency.

The mayor’s office added:

To combat these moves, the city will be marketing for fully-funded, self-funded Blue Cross/Blue Shield (BCBS) medical plans in New Jersey and Aetna; seeking to create a new pharmacy benefits plan; and working with HealthCare2U, a national company, to provide part-time workers who lack medical benefits with access to non-emergency care.With current rates and payment structure, for the city to leave the Social Housing Program, it would have to pay approximately $32 million to the state, which is our portion of medical claims and medical claims pending, as well as administrative costs.

Baraka is not the only elected official from Newark to criticize the recent increases.

Senate Majority Leader Theresa Ruiz, who represents the city in the 29th district, expressed her “disappointment” with the price hike earlier this month before it became official.

Ruiz wrote:

“The financial realities we have faced due to the pandemic have been difficult. With the recent announcement of a twofold increase in health benefits for public servants, the surging concern about this issue is understandable. While the health benefit rate trends nationwide increased by about 10 percent, New Jersey increased in the absence of Any solution, can ultimately lead to an increase in property taxes.We should all be concerned because there are consequences for employees, local government, local government, schools and taxpayers.More robust discussions should be held to find immediate solutions Reduce the financial impact of this year and achieve cost savings on Long term Committees should defer approval of the proposal to allow for productive negotiations to find these solutions In addition to taking action to mitigate the immediate financial impact of this proposal, they should reform the process so that this never happens again, they need to achieve greater transparency and accountability for what is an opaque process that has allowed these proposed increases to go unchecked. Expanding the committees’ membership to include representation of sectors that will feel the impact is a strong step in the right direction” .

“Health care costs and services are a major concern for everyone – they must be managed responsibly and effectively,” Ruiz added.

>> Read more: Newark’s proposed city budget would mean higher taxes for homeowners

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