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The original item was published from 8/3/2023 12:39:00 PM to 8/3/2023 1:27:06 PM.

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Pension & Health Benefits

Posted on: August 3, 2023

[ARCHIVED] State Health Benefits Commission Adopts 2024 Plan Year Rates

On Monday, the State Health Benefits Commission adopted the Plan Year 2024 rates, which includes a 7.4% increase for the State Health Benefits Program (SHBP) Local Government Employer Group effective January 1, 2024. There were no changes to the rates that were presented last month, as the League reported, including that the premium rate changes for the combined Local Government Actives, Early Retirees, and Medicare Retirees is an increase of 7.4%. This reflects the following: 

  • The rate change for Local Government Actives is a 5.7% increase for medical and a 19.9% increase for the prescription drug premium rates, for a total increase of 7.3%. 
  • The rate change for Local Government Early Retirees is a 5.2% increase for medical and a 20.8% increase for the prescription drug premium rates, for a total increase of 7.3%. The Medicare Retiree medical decrease for Plan Year 2024 is 0.7%, which includes both self-insured medical premiums and fully insured Medicare Advantage premiums. The recommended prescription drug rate change in Plan Year 2024 is a 15.5% increase.

The recommended changes for Local Government Plan Year 2024 are:


 

RX

 

 

 


Medical

Rx Card

MMRx

Total Rx

Total

Actives

 

 

 

 

 

PPO / NJDIRECT /HDHP

5.8%

20.2%

20.1%

20.2%

7.4%

HMO

5.8%

20.2%

20.1%

20.2%

7.5%

Tiered Network

1.4%

11.4%

11.4%

11.4%

2.8%

Total

5.7%

19.9%

19.7%

19.9%

7.3%

Early Retirees

 

 

 

 

 

PPO / NJDIRECT /HDHP

5.2%

 

 

20.8%

7.3%

HMO

5.2%

 

 

20.8%

7.5%

Total

5.2%

 

 

20.8%

7.3%

Medicare Retirees

 

 

 

 

 

Total

(.07%)

 

 

15.5%

8.8%

Grand Total

5.6%

 

 

19.1%

7.4%


The projected combined Active and Retiree Medical and Prescription Drug Claim Stabilization Reserve Balance is again projected to be below the targeted 2.0 months of plan cost in Plan Year 2024. As a result, 3.0% margin has been added to the Active, Early Retiree, and Medicare Retiree Medical and Prescription Drugs premiums. The state plan does not include a surcharge for a Claim Stabilization Reserve.

During the presentation, AON noted as part of the Trend Analysis that anti-selection of the plan by local governments was included as a reason for part of the rate increase for local government plans. To reflect potential additions and terminations in the Local Government SHBP, the active and retiree medical and prescription drug trends increased by 100 basis points in Plan Year 23 and 75 basis points in Plan Year 24. We understand that the anti-selection, or leaving of the SHBP is attributed to the 22% increase in Plan Year 2023 that had dozens of municipalities leaving the SHBP for comparable coverage at lower costs. Published reports indicate that more than 30 municipalities, from all parts of the state and all types of municipalities, have opted for this path including Newark, Trenton, Camden, Madison, and Ocean City. 

The State Employee and Retiree Group SHBP total recommended Plan Year 2024 premium rate change for the combined State Actives, Early Retirees, and Medicare Retirees is 4.3%. This reflects the following recommended rate changes: 

  • The State Actives is a 2.2% increase for medical and a 16.7% increase for the prescription drug premium rates, for a total increase of 4.3% 
    • The State Active CWA Unity, CWA Unity 2019, NJDIRECT, and NJDIRECT 2019 plan options is a 1.9% increase for medical and an 15.1% increase for the prescription drug premium rates, for a total increase of 3.8%. 
  • The State Early Retirees is a 0.4% increase for medical and a 21.0% increase for the prescription drug premium rates, for a total increase of 3.5% 
  • The Medicare Retirees medical for Plan Year 2024 is 3.4% decrease, which includes both self-insured medical premiums and fully insured Medicare Advantage premiums. The recommended prescription drug rate change for Plan Year 2024 is a 10.3% increase.

The recommended changes for State Employment and Retiree Group Plan Year 2024 are:

 


 

RX

 


Medical

Rx

Total

Actives

 

 

 

PPO / /HDHP

3.00%

23.9%

6.0%

HMO

3.0%

23.9%

6.1%

Tiered Network

2.5%

5.5%

2.9%

CWA Unity / NJ DIRECT PPO

1.9%

15.1%

3.8%

Total

2.2%

16.7%

4.3%

Early Retirees

 

 

 

PPO 

0.4%

21.0%

3.5%

HMO

0.4%

21.0%

3.5%

CWA Unity / NJ DIRECT PPO

0.4%

21.0%

3.5%

Total

0.4%

21.0%

3.5%

Medicare Retirees

 

 

 

Total

(3.4%)

10.3%

5.8%

Grand Total

2.1%

15.5%

4.3%


We remain concerned about the significant disparity between the local government employer group and the state program, as well as the lack of a claim stabilization reserve cost for the state program. With the passage of the 2024 Plan Year rates, we encourage you to share this information with your professionals to explore cost-saving alternatives.

The Commission also readopted all of its existing regulations under Title 17, Chapter 9. These were scheduled to expire in September and the commission will hear revision proposals in the near future.

Contact: Paul Penna, Senior Legislative Analyst, ppenna@njlm.org, 609-695-3481, x110.

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