TRENTON – Governor Murphy recently announced a new agreement aimed at saving around $75 million in state health benefits for the final half of Fiscal Year 2026. This deal involves 17 public sector unions representing state workers and marks the most significant change to health benefits in nearly 15 years.
“We are making responsible changes to improve our health plans,” Governor Murphy stated. “Our goal is to provide strong recommendations for future leaders to secure the best health care deals.”
The planned updates, set to be reviewed by the State Health Benefits Plan Design Committee later this month, include:
- A new in-network deductible of $110 for individuals and $220 for families.
- An out-of-network deductible of $750 for individuals and $1,500 for families.
- Out-of-pocket maximums of $2,500 for individuals and $6,000 for families for out-of-network services.
- Introduction of new co-pays for various medications and lab visits.
- Incentives to use in-network ambulatory surgical centers for certain procedures.
- Limits on out-of-network physical therapy visits.
- Expansion of the Centers of Excellence pilot program.
In addition to these immediate changes, the state will collaborate with unions to identify long-term cost-saving strategies. Voting on these changes is expected at the upcoming PDC meeting, allowing implementation by January 1, 2026. This is crucial as healthcare costs have risen significantly, with New Jersey’s increases often outpacing those in other public employee plans.
Recent data highlights that the average annual healthcare cost increase across the nation is about 4.6%, yet the State Health Benefits Plan’s costs have jumped well beyond that. According to a survey by the Kaiser Family Foundation, nearly 50% of American workers are worried about rising healthcare expenses. This reflects broader anxiety among states, including New Jersey, trying to manage tight budgets while addressing rising health care needs.
With a focus on sustainable health care practices, the agreement sets a path toward better management and oversight. It’s an essential move for the future, especially as costs continue to rise nationwide. For additional details on this initiative, you can check the Memorandum of Agreement and the transition report for long-term strategies.
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