As reported by nj.com, Governor Chris Christie estimates his plan to overhaul the state’s public employee health benefits system will save more than $870 million a year by 2014 by shifting significant percentage of the costs to employees and future retirees, according to the Treasury Department.
In the most detailed explanation of the proposal to date, Treasury spokesman Andrew Pratt said the governor wants to gradually increase state employee health benefit contributions over three years, requiring them to pay 10 percent of premiums this July and climbing to 30 percent by July 2014. New workers would immediately pay 30 percent. Currently, state employees pay 1.5 percent of their salary for medical benefits. Most Democratic lawmakers and budget observers believed Christie wanted employees to start paying 30 percent of their premiums immediately and assumed that was how he justified savings of $370 million in his proposed state budget.
In response to requests from The Star-Ledger, the administration says the final tally is more than $870 million and the proposal would involve much more than increased contributions, such as tiered plans, increased co-pays and lengthening the eligibility requirements for post-employment health care. The savings represent about one-third of the $2.5 billion the state expects to pay in employee medical costs this year, Pratt said. They would also dwarf initial estimates of a proposal by Senate President Stephen Sweeney, who wants contributions to be based on salary.
Democratic lawmakers who were already skeptical about the $370 million in savings in the proposed budget expressed more disbelief about the latest figures, with the chairman of the Senate Budget Committee calling them “ridiculous.” The Christie plan would not change payouts for current retirees and workers with at least 25 years on the job when the measure takes effect would not be required to pay more when they retire. But, all others would have to pay 30 percent after they retire and workers would not be eligible for post-retirement health coverage unless they work for 30 years, up from 25 years.
With no Republican bill and a lack of Democratic support for Sweeney’s proposal, Christie’s budgeted $370 million in health benefit savings is on shaky ground. It is one of several uncertainties in the governor’s budget. The State Supreme Court is considering whether Christie needs to restore up to $1.6 billion in education cuts and the administration has yet to explain how it plans to achieve $300 million in Medicaid savings through a federal waiver, which faces layers of approvals. “There could be a lot of problems,” said Assembly Budget Committee Chairman Lou Greenwald. “I hate to see him strike out on all three of these.”
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