Obamacare Will Burst N.J. Benefits Bubble

By Matt Rooney | The Save Jersey Blog

CadillacGovernor Christie is on the Ocean City Music Pier today pushing for another sweeping round of public employee benefit reforms, Save Jerseyans.

It’s timely.

You know what the pension numbers look like because you’re a regular reader. That being said, our obnoxiously gigantic $40 billion in unfunded pension liabilities is eclipsed only by a public employee health benefit program that’s $47 billion in the red. What else could you expect from a state with roughly 81 government employees per square mile?

But it’s not simply a matter of how many people are drawing pensions and health benefits, retired and active. Nope. It’s how much each plan costs! A new report from the nonpartisan Pew Charitable Trusts and the MacArthur Foundation released Wednesday discovered, unsurprisingly, that our state’s public employee health benefits are the highest in the nation –  $1,334 on average – as opposed to $963 nation-wide.

Assembly Republican Budget Officer Declan O’Scanlon (R-Monmouth) seized upon the reports release to reaffirm the importance of Governor Christie’s newly-convened reform study commission. “Offering benefits at a fair cost to dedicated public employees is the right thing to do,” added O’Scanlon. “Providing Rolls Royce coverage that taxpayers cannot afford is unacceptable. Under this scenario, everyone loses.”

“We need a system that offers more flexibility in coverage and cost. Public employees should be eager to work out a plan that does not crush taxpayers and bankrupt the system. One size does not fit all.”

There’s plenty Trenton can explore to get out of the way of its own feet (e.g. higher employee contributions, tiered plan offering, etc. and so on) but, in truth, the causations are complex and some of this mess is also out of our Garden State politicians’ less-than-capable hands. Obamacare’s looming “Cadillac tax” will, beginning in 2018, add a hefty 9-figure sum to the cost of keeping public employees covered. As a general matter, New Jersey’s insurance rates have always been high due to mandates which are now largely nationalized thanks to the ACA. That, and subsidies have conspired to mask the pain for non-public employees. Now Obama’s Frankenstein baby is, ironically, poised to burst our ballooning bubble (in case losing your preferred plan last year didn’t wake you up).

Repealing the damnable health care law by electing a GOP Senate in 2014 and Republican president in 2016 remain more important than any commission’s recommendations. By a long shot.