Atlantic County faces hike in insurance costs Atlantic County faces steep hike in health insurance costs

Atlantic County government is facing a $4.2 million hike in health insurance costs in its next budget, due to the 22.8% premium increase imposed last month by the State Health Benefits Plan Commission, County Executive Dennis Levinson said Monday.

The increase will translate to a county tax hike of about 1.17 cents per $100 valuation to cover current employees, and about 1.77 cents per $100 if all open positions are filled, according to Levinson.

For a house valued at $300,000, the tax increase just to cover the health insurance hike would be $35 to $53.

Particularly vexing to Levinson, the county's ranking elected official, was the late notice of the steep rate hike, which gave the county no time to adapt in time for its 2023 budget.

"For the past 18 years, the average annual rate increases have been less than 3%," Levinson wrote in a Monday letter to the county Board of Commissioners. "To add salt to the wound, we later learned that the (State Health Benefits Commission) has been aware of the pending rate increases since February but withheld that information."

The state had the information, however, and Gov. Phil Murphy negotiated a deal with the state unions to limit their workers' rate increase to 3%.

"Had local governments been aware of the circumstances, we may have also been able to negotiate. But when you only are notified in September and you are required to submit your 2023 budgets in mid-January, your options are extremely limited," Levinson said. "Why weren't we given the same opportunity as the state unions?"

Levinson urged the commissioners to support legislation to force the State Health Benefits Plan Commission to incorporate representatives of local and county governments, and to be transparent about why premium increases are needed.

Commissioner John Risley, of Egg Harbor Township, said at Tuesday afternoon's Board of Commissioners meeting he will sponsor a resolution next meeting on the issue.

"This is going to be a huge problem for us," Risley said. "I would like us as a board to request someone from the state health insurance plan come here and talk to us."

Commissioner Ernest Coursey, of Atlantic City, who is the Chief of Staff to Atlantic City Mayor Marty Small Sr., said some other municipalities do not use the state health plan and the county should consider doing the same.

"We're looking at that," Coursey said of Atlantic City. "We give employees raises and take it right out again (to pay for) health benefits. Our responsibility is to do everything we can to try to reduce that number (that taxpayers and employees must pay)."

School districts in the state plan are also facing double digit percentage increases in health plan costs, said Commissioner Amy Gatto, of Hamilton Township.

"Keep in mind the (SHBP Commission) contains no local government representation despite the fact it is responsible for making decisions that have a huge impact on local governments and their taxpayers," Levinson said.

Costs for active employees will increase from $27.7 million in 2022 to $31.7 million in 2023 ($33.7 million if all job vacancies are filled); while costs for retired members will rise from $2.6 million in 2022 to $2.8 million in 2023, according to Levinson.

The state has refused to release specific claims information, which is needed "to provide a better understanding of claims history and the reason for the exorbitant increases," Levinson said.

A bill introduced Sept. 29 and sponsored by Deputy Speaker Yvonne Lopez, D-Middlesex, (A4670/S3049) would change how often participants in the State Health Benefits Program can access their claims data, and increase its detail without compromising privacy.

The SHBP Commission based the increases on actual usage of medical care by participants in 2021, according to information on its web site said.

In a fact sheet on the issue, the state Department of Treasury said the need for such premium increases is being driven by increased utilization of medical services and health care cost increases.

Its analysis was based on a report by consultant Aon, the department said.

"The combined effects of the COVID-19 pandemic have resulted in far higher utilization of medical services overall by our plans' members, both because of illness due to COVID infections, and perhaps more significantly, because so many members are having services or procedures previously postponed due to the pandemic," according to the fact sheet.

It said members shifted to more visits to high-cost specialists, emergency room visits and urgent care visits.

And due to inflation and other factors affecting the costs of health care, in New Jersey and nationally, the cost of medical services and procedures in 2021 increased overall by more than 5%.

However, New Jersey's costs are going up at more than twice the rate of other states, according to an analysis by nj.com.

Levinson projected an overall increase of $4.2 million in health benefit costs for Atlantic County in 2023 based on existing employees, and an additional $2 million should vacancies be filled.

"The contributions of active members will also increase from $4.7 million to $5.1 million," Levinson said.

Atlantic County commissioners passed a $236.8 million 2022 budget in April that allowed for a small property tax decrease.

The county joined the SHBC in 2003.

The state took until Oct. 13 to post new rates to its web site, Levinson said, so the county can only now project exact cost increases.

"Atlantic County employees will not only be required to pay more in cost share contributions, but may also pay more in property taxes, thus taking it on the chin not once, but twice," Levinson said.

REPORTER: Michelle Brunetti [email protected]