N.J.’s doomed health plan hits breaking point — and Murphy wants sacrifices

💥 Murphy drops bombshell plan to rescue N.J. health benefits — and workers explode

😡 ‘A joke’: Unions revolt as Murphy pushes massive health cost hikes

💲 Without action, the State Health Benefits Program will collapse, Murphy says

In one of his final major acts as governor, Phil Murphy is asking New Jersey to swallow a bitter pill: pay far more for public-sector health insurance or watch the State Health Benefits Program for Local Government collapse altogether.

The program covers nearly 150,000 workers but is mired in debt, drained by exploding premiums and mass municipal exits that have left a smaller, sicker pool behind. Murphy’s proposed fix — a $260 million state bailout paired with sweeping premium hikes and drastically fewer plan choices — is the kind of tough medicine he says “good government” demands.

Sticker shock and fury from unions

But to workers long accustomed to gold-plated benefits, the sticker shock is staggering. Copays would triple — from $10 to $30 for a primary-care visit, from $75 to $300 for an ER trip. Deductibles, once negligible, would spike to $2,500 in-network and $5,000 out-of-network under the new PPO. Plan options would shrink from more than 50 to six.

Labor leaders wasted no time scorching the proposal. AFSCME’s Steve Tully told NJ.com the plan was “a joke” and “an insurance executive’s dream,” blasting the administration for demanding sacrifices without tackling hospital costs. CWA’s Tonya Hodges said the state should be moving toward more oversight, not less — especially after Horizon agreed to a $100 million settlement for overbilling the plan.

A political and fiscal time bomb for the next governor

Murphy leaves office Jan. 20, when Gov.-elect Mikie Sherrill inherits the mess. Lawmakers must move quickly if they want to pass the reforms before then — a tall order when police, firefighter, teacher and engineer unions are united in opposition. Senate President Nicholas Scutari says compromise is possible, but Assembly Speaker Craig Coughlin is staying noncommittal.

A reckoning decades in the making

For years, generous public benefits were the trade-off for salaries that lagged the private sector. But as premiums soared 59% in three years and municipalities bolted, the math stopped working. Murphy insists the choice is grim but clear: pay more now, or risk a catastrophic crash next year. Whether New Jersey’s workers accept that tradeoff may define the state’s political landscape well beyond Murphy’s exit.

May be a short term fix

Murphy's plan counts on towns and counties that left the plan to come back.

Their exit is what caused this problem. Towns with younger and healthier workforces are able to obtain cheaper insurance for their workers and for taxpayers.

That leaves behind older and sicker workers in the state plan. They are more expensive to insure.

If Murphy - and the next governor - cannot convince the local government that left the plan to come back, the State Health Benefits Program could find itself right back in the same problem in a very short period of time.