Senate President Removes SEHBP Moratorium from Proposed Health Benefits Legislation
State Senate President Steve Sweeney (3) of West Deptford told State Street Wire April 29 that he is pulling a moratorium for the State Health Benefits and School Employees Heath Benefits Plan from his public employee health care reform bill S-2718. The move comes a week after the New York Times detailed Sweeney’s close relationship with South Jersey powerbroker George Norcross and the benefit to Norcross's insurance brokerage firm from the hold on entrants into the state health care plan (Move on New Jersey Health Plan May Cost Towns but Help Power Broker NY Times April 19 2011).
“I’m not going to let the unions discredit (this reform)” Sweeney said as he was leaving Senate chambers today. “I’m going to pull back on (the moratorium).”
Sweeney said his decision to kill the moratorium had nothing to do with the New York Times story and everything to do with getting a deal done with the unions. The article highlighted Mr. Sweeney’s ties Norcross.
The Current Process
The state cuts brokers out of the process and allows municipal school and county entities to join the insurance pool denying brokerages like Norcross’ Conner Strong the opportunity to profit from the large public employee demographic.
The program covers hundreds of thousands of state school and municipal employees with generous benefits at low cost partly by cutting out brokers like Mr. Norcross. Each municipality or district that joins the state program pays the same rate so healthier work forces subsidize sicker ones.
A moratorium local officials warned would shrink and eventually destroy the program. Employers with the healthiest workers would continue to leave if they found better deals on the private market. But with no new employers coming in those that remained with sicker workers and more expensive claims would shoulder more of the burden at accelerating costs.
Mr. Sweeney acknowledged discussing a moratorium with Mr. Norcross but said he had not introduced it at Mr. Norcross’s behest. Mr. Sweeney added that the program had lost hundreds of millions of dollars in recent years and was being subsidized by the state.
But The NY Times reported that the program was not losing money or requiring any state subsidies.
The program’s popularity has soared since 2008 as public officials have scrounged for savings. The number of employers in the program is up by more than 200 to 1034. The number of municipal and school workers covered has also grown sharply records show.
Sweeney was critical of some of the proof presented in the NY Times piece. The Senate President also said various editorial boards have raised “legitimate issues” with the moratorium to which he responded.
He said further review of the moratorium and SHBP/SEHBP plans are needed and left the possibility of further reform bills that address it on the table.
Source: NY Times State Street Wire