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Health care task force recommends ways to lower costs for public employees

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New Jersey Treasurer Elizabeth Maher Muoio released the state's Health Benefits and Quality Task Force's recommendations to lower the cost of health care for the state's public employees.

The recommendations were made by the state’s health consulting service, AON, which also indicated that active members of the state’s health plans for public employees could see a six percent increase in premiums in 2019. The recommendations are:

  • Conducting member eligibility audits, which would involve audits of dependents, spouses, Medicare-eligible enrollees, and staff at higher education institutions and other government entities. The audits have already begun, and the task force expects that they will identify and remove ineligible enrollees that can be removed from state-administered plans, thus producing savings of $77 million by the end of 2019; 
  • Pay additional fees to third party administrators such as Horizon Blue Cross and Blue Shield of New Jersey, Aetna and Optum, for services provided to members. The Office of the Treasurer would work to ensure transparency in its relationship with these TPAs to ensure that members and the state are receiving a high return on their investment. Invoices would be verified to ensure that they reflect services provided and payment mechanisms to TPAs and providers will be streamlined in order to ensure accountability and accuracy. The Treasurer’s office expects that this will yield roughly $15-25 million in savings, and  
  • Continue the work of plan design committees to discusswith members potential modifications to achieve reductions in premiums. In the past, PDCs had been actively engaged in several critical plan modifications that not only produced savings for members and taxpayers, but also improved the quality of service delivered to members. That mission will continue this year with the PDCs as they explore, with the administration, several potential plan improvements, including a review of how out-of-network claims are administered. The magnitude of the savings will be dependent on the extent of the reforms that are ultimately adopted, said the Treasurer’s office.

“As part of the Governor’s goal to change the way we do business, we put together an internal working group at the start of this administration that was tasked with finding more immediate health benefit cost savings,” said Muoio. “These initial measures are designed to exact savings through efficiencies in order to keep premiums in check while maintaining the same quality level of service for members. We anticipate that these proposals can be enacted relatively quickly while the Governor’s Special Task Force pursues longer term savings, enhanced value within the plans, and efficiencies. Ultimately, our goal is to find the most cost-effective means to deliver quality health benefits to our nearly one million state and local government and school employees.” 

The task force is comprised of staff from the Treasurer’s Office, the Governor’s policy team, the Office of Management and Budget, and the Division of Pension and Benefits.  

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Vince Calio

Vince Calio

Vince Calio covers health care and manufacturing for NJBIZ. You can contact him at vcalio@njbiz.com.

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