Opinion: Horizon $100M Settlement Proves NJ's Public Workers Are Being Fleeced

Repost from NewJerseyGlobe.com

Opinion: A $100 Million Fine Proves NJ’s Public Workers Are Being Fleeced

By Adam Liebtag and Michele Long-Vickers
November 18 20254:33 pm

The recent news that Horizon Blue Cross Blue Shield will pay New Jersey $100 million to settle claims it overcharged the state is a staggering – and infuriating – revelation. For the thousands of state and local government workers we represent, this is a painful validation of what they’ve  known for years: the system managing our healthcare is broken, and public employees are being crushed by the fallout.

The state claims Horizon knowingly overcharged for medical and hospital services,  violating a key cost-saving clause in its contract with the State. Horizon, on the other hand, calls it a “straightforward contract dispute.” Public employees and employers have paid these inflated bills for years, while being attacked for the high cost of healthcare. Does anyone really believe these overcharges are limited just to the SHBP State group? Does anyone believe these practices are not happening in other public and private health insurance plans? What other inflated costs were charged and were not audited by the State? This settlement does not solve the problem of a broken system with insufficient oversight.

But the real-life effect of this crisis is that hundreds of thousands of working families have been forced to choose between essential medical care and filling their kitchen cabinets. For us, that means our healthcare premiums have shot up by as much as 59% in the past three years. The state’s own actuary is now proposing an additional 20% hike for state workers and 37% for local government workers. These numbers are both immoral and unsustainable.

We see the human impact of these numbers on a daily basis: State workers, though protected by strong union contracts that base contributions on a percentage of their salaries rather than the skyrocketing premiums, are feeling the pressure. When premiums explode, the state claims there’s less money for salaries and other critical needs in our contracts and we are always fighting to protect quality healthcare for our members.

Local government workers are in an even more dire situation. Most are still trapped under the outdated Chapter 78 law, which bases their contributions on a percentage of the premium. A typical municipal employee earning $65,000 is now paying nearly $9,500 annually for a family plan. A 37% premium hike means a 37% hike in what they pay. For many, this effectively eliminates years of raises and forces impossible choices between healthcare and other basic necessities.

Cindy Rivera, a CWA state worker living in northern New Jersey, recently told legislators at a CWA-sponsored forum : “My life depends on my medication.” She is one of thousands forced to choose between healthcare and groceries, between prescriptions and the mortgage.

Another unintended consequence of this unfolding crisis is a slow-motion exodus from New Jersey’s public sector.

We see dedicated employees leaving jobs they love for the private sector. We see our members avoiding promotions just so they can prevent their healthcare contributions from sending their take-home pay backwards. We have members employed full-time who are enrolling in Medicaid and SNAP to make ends meet. We see retirees, who built their lives here, scared about losing benefits they earned over a 25 or 30 years career serving the public.

Ultimately, this crisis hurts every New Jerseyan. As town and county budgets are bled dry by premium hikes, they have no choice but to raise property taxes. The problem grows worse as higher premiums have driven thousands out of the SHBP, creating a vicious cycle as the State’s actuary adds margin to account for smaller risk pools. The only winners are the insurance and hospital executives counting their profits.

The $100 million settlement payment from Horizon is barely a down payment on accountability, but it is definitely not a solution. It’s proof that a lack of oversight takes a toll both on the system and on hard-working New Jersey families.

We have the blueprint for a fix. Our union is fighting for systemic change through legislation (A5903) that imposes real cost controls and affordability measures. We are demanding equal representation for workers and to include local government on the State Health Benefits Commission. The only voice calling for reforms to healthcare pricing, controlling PBMs, and reducing costs for everyone is from labor. It’s absurd that management consistently outvotes labor on the very board that approves these budget-busting hikes.

The backbone of New Jersey—the workers who plow our roads, teach our children, and keep our communities safe—is breaking. We need our legislators to stop cowering to the powerful insurance and hospital lobbies. We need much stronger oversight of insurance companies and PBMs. We need transparency in medical prices. We need to make healthcare more affordable for everyone, not to keep paying whatever inflated – and possibly fraudulent – charges are passed on to the public sector by the influential insurance lobby.

The $100 million fine is a warning. Heed it. The financial and human cost of inaction is a bill we can no longer afford to pay.

Adam Liebtag is the president CWA Local 1036 and Michele Long-Vickers is the president CWA Local 1040.