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NJ Treasury officials sound alarm about health benefits for local government employees

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NJ Treasury officials sound alarm about health benefits for local government employees



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New Jersey Treasury Department officials are warning about rising costs and spiraling structural deficiencies in the State Health Benefits Program, which provides health care coverage used by hundreds of thousands of state and local public employees.

In a report released May 20, Treasury officials say the program is facing challenges because rising costs of health care coverage are driving some local governments to seek cheaper benefits alternatives. That exodus is creating what Treasury officials call a “systemic unraveling” of the SHBP.

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There are 689 local government agencies using the State Health Benefits Program, and participants have seen premiums increase by nearly 60% since 2022, the report says. The plan covers more than 700,000 public employees statewide.

Premium increases are expected this year as well.

What does the report say?

The local government plan — the portion of the SHBP that covers local government employees — faces legitimate financial concerns right now, the report notes.

In October 2024, Gov. Phil Murphy signed legislation to allow funds to be temporarily transferred from the state plan to the local government plan to cover shortfalls. In five months, transfers of $258 million were approved. About $138 million has been repaid, and an outstanding balance of $120 million remains.

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The plan faces what actuaries refer to as a “death spiral,” the report says.

“This dynamic arises when the financial sustainability of a health benefits program deteriorates in a self-reinforcing cycle, each worsening cycle compounding the next,” it says.

As healthier local governments leave the plan for cheaper options, those left behind with higher medical use see premiums go up. This leads to more local governments leaving the plan. In turn, having fewer participants leads to a smaller buffer to mitigate premium spikes, actuarial losses or cash flow needs, the report explains.

About 45% of the state’s 1,200 eligible local public entities are currently using health benefit programs outside the state’s plan.

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This is “not merely facing a financial problem” but a “structural unraveling that, left unaddressed, will lead to collapse,” Treasury officials say in the report.

What comes next?

With the report, prepared at the direction of the administration of Gov. Phil Murphy, Treasury is urging the Legislature to intervene. That said, the report doesn’t make any specific recommendations as to what comes next but offers policy options because of the urgent nature of the problem.

Even the options provided have no real time frame of implementation but rather depend on the specific initiatives considered by the Legislature.

Those options include a “phased and orderly closing” of the local government health benefits plan to allow “local entities to transition into self-governed collectives.”

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Alternative policy options for short-term stabilization could also be implemented, but they “will not fully resolve the structural deficiencies or halt the death spiral.”

They include a installing a minimum lock-in period of three to five years for agencies participating in the program, reforming the Plan Design Committee to include a delegated authority to the treasurer or director of the Division of Pensions and Benefits so that routine plan changes could be made, and rebuilding the claims stabilization reserve to the recommended two-month level.

“These short-term measures are independent of the more comprehensive solution of dissolution,” the report said. “The simultaneous introduction of all of the three short-term measures will have a cumulative positive effect, since governance modernization alone cannot succeed.”

Katie Sobko covers the New Jersey Statehouse. Email: sobko@northjersey.com



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New Jersey

New Jersey hospital closes, officials ‘deeply disappointed’ | Chief Healthcare Executive

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New Jersey hospital closes, officials ‘deeply disappointed’ | Chief Healthcare Executive


A hospital serving Jersey City for more than 150 years has closed, stunning area residents and leaving New Jersey state regulators frustrated.

Hudson Regional Health closed Heights University Hospital over the weekend. The facility was formerly known as Christ Hospital. Hudson Regional Health took over the hospital after its previous owner, CarePoint Health, went into bankruptcy.

While the hospital is closed, Hudson Regional says it will maintain an emergency department at the facility. Hudson Regional also says patients will be able to get care at the system’s three other hospitals in northern New Jersey.

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“The Heights University Hospital Emergency Department remains open and fully operational for all emergency needs. We are committed to continue providing safe, reliable, and timely care to our community,” the system said in a post on Facebook.

In another message posted on Facebook Monday, the system said the emergency department would be open around the clock and supporting services would ensure care.

Hudson Regional also pointed to an inability to secure needed funding from state officials.

“Despite the best efforts of HRH leadership and advocacy from a number of elected officials, the governor’s office declined to provide the necessary funding to continue operations at Heights University Hospital as an acute care hospital,” the system said on Facebook.

About 700 employees are affected by the closure, but Hudson Regional says the “majority” of those employees have been, or will be, offered positions at the system’s other three hospitals. “All earned wages and benefits will be provided,” the system said.

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Hudson Regional cited “unanticipated setbacks” in the decision to close the hospital, including losses in charity care and the challenges of caring for a patient population that has lower incomes. The system said nearly two-thirds of its patients have little or no insurance.

The health system said it recognizes the need for a strong healthcare facility in the Jersey City community and says it will work with local officials to bring that to fruition. The system also points to the investment of over $300 million in its facilities and other efforts to improve the facilities.

The New Jersey Department of Health indicated its dissatisfaction over the closing of the hospital.

In an email to Chief Healthcare Executive Monday, a department spokesperson said the department said it was notified last week that Hudson Regional “failed to fund their payroll and started transferring its patients to surrounding hospitals.”

The health department said it advanced nearly $2 million to the hospital to avoid a disruption in services, and another $2 million grant last month to help make payroll and avoid an abrupt closure. The state also gave over $10 million to the former CarePoint system to support it through bankruptcy.

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The department also said Hudson Regional didn’t follow a restructuring plan approved by a federal bankruptcy court.

“And it has not followed through on its commitments to the community it serves and to the State to turn things around after taking over the hospital,” the department said.

Hudson Regional had filed an application with state regulators to close the hospital. The department said it was still reviewing the petition, “yet Heights University Hospital has closed acute care services without the Department’s approval.” The department said it will continue to ensure the emergency department remains functioning.

“We will continue to hold Heights University Medical Center and Hudson Regional Hospital accountable through this closure with patient health and safety as our top priority,” the health department spokesperson said.

CBS New York reports the swift closure of the hospital stunned neighbors. “This is beyond devastating,” a nurse said.

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Hudson County Executive Craig Guy said in a post on X that he was “deeply disappointed” by the closure of the hospital.

“This acute care facility has been a lifeline for Jersey City and Hudson County residents for generations, and its loss will have a real and immediate impact on residents who rely on timely, accessible emergency and inpatient care,” Guy said.



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Millions of gallons of raw sewage spill into Camden County’s waterways each year

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Millions of gallons of raw sewage spill into Camden County’s waterways each year


Swimmable waterways have long been the goal of the federal Clean Water Act, which was passed in 1972.

But more than 50 years later, older industrial cities like Camden and Philadelphia have struggled to reach that level of cleanliness because of outdated sewer systems.

Unlike modern infrastructure, which utilizes separate piping systems, older sewer systems send stormwater and sewage through the same underground pipes.

During heavy rain, this combined sewer/stormwater system can overflow, spilling raw sewage into the region’s rivers and streams. The overflow can also mean flooding in nearby communities.

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As of 2018, there were 30 active combined sewer outfalls located within Camden and Gloucester City, according to the New Jersey DEP. Overflows discharge into three receiving streams: the Delaware and Cooper rivers and Newton Creek.

Camden’s main waterways, the Cooper and the Delaware rivers, often contain fecal bacteria levels that make it unsafe for humans to swim, fish or even kayak in.

Prior to the Clean Water Act, the Delaware River between Trenton and Philadelphia supported virtually no aquatic life at all. More than 50 years ago, regulations requiring facilities to treat wastewater before discharging it changed what was once a “stinky, ugly mess” into a place where hundreds of thousands visit its urban shorelines each year.

Swimming and kayaking are now permitted in much of the Upper Delaware River, which is regulated by the Delaware River Basin Commission. However, for a 27-mile stretch along Camden and Philadelphia, the commission restricts residents to boating and fishing.

Swimming in waterways polluted with bacteria and viruses can cause health problems such as gastrointestinal illnesses, skin rashes and respiratory problems. About 90 million illnesses caused by swimming, boating and fishing in polluted waters are reported each year in the United States.

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“Decisionmakers in Camden have a responsibility to safeguard public health and protect our shared waterways,” said Lucia Osbourn, program director at the American Littoral Society. “Recreational use of the Delaware River in Camden is already a reality for many residents, and we cannot continue to pollute the very waters our communities rely on.”

Federal regulations require municipalities to reduce 85% of stormwater and sewage overflow.

Progress has been made. For instance, the Camden County Municipal Utilities Authority, or CCMUA, is investing in infrastructure to divert millions of combined sewer discharges from the state’s waterways.

In an interview with WHYY News in May, Executive Director Scott Schreiber said that CCMUA is “fully committed” to restoring water quality to a level that allows people to recreate without getting sick.



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From taxes to sky-high home prices, here’s why NJ is a retirement nightmare

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From taxes to sky-high home prices, here’s why NJ is a retirement nightmare


According to Retirement Living’s State of Retirement and their study of best and worst states to retire, New Jersey ranks as the fourth worst state in the country to kick back, put your feet up, and retire.

According to the study, 58% of adults over 60 worry they will not have enough to retire comfortably.

A long time ago, they called it a “baby boom,” and they were right. As a result of that “baby boom,” there are more Americans hitting retirement age than ever before, so the lack of necessary monies to be comfortable in retirement is an understandable concern.

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Where are the best places to retire?

Good old Wyoming ranks No. 1 in the country as the best state to retire to. If you are retired, you will need $573,800 to live a comfortable retirement. Wyoming has no state income tax and a strong economy. I just cannot see myself high in the saddle scurrying after bison in Wyoming.

West Virginia, Florida, and Montana round out the top 4 best places to retire.

Florida is a favorite of New Jersey retirees. You will need $685,000 to live in a comfortable retirement setting. Be forewarned, the study also points out that with the large influx of retirees headed to Florida, the cost of property and rentals is higher and continues to climb. That real estate will become overpriced and dig into that $685,000 quickly.

Oko_SwanOmurphy

Oko_SwanOmurphy

Where does New Jersey stack up?

You will need close to one million dollars to enjoy a comfortable retirement here in New Jersey, $964,000 to be exact. The Great Garden State ranks low in affordability with high real estate costs, the highest property tax rate in the country, and a high state income tax rate.

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The good news is that New Jersey offers strong healthcare access and, believe it or not, a low violent crime rate. The pristine beaches, boardwalks and walkability are positive factors, but they do not necessarily offset the large amount of revenue you will need to sink into your retirement in New Jersey.

Canva / TSM Illustration

Canva / TSM Illustration

I have my own retirement plan; I want to work and play the hits” till I can’t no more.” Good luck to you.

The 10 best and 10 worst states to retire

Gallery Credit: Bankrate/New Jersey 101.5

LOOK: Best counties to retire to in New Jersey

Stacker compiled a list of the best counties to retire in New Jersey using data from Niche.

Gallery Credit: Stacker

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The post above reflects the thoughts and observations of New Jersey 101.5 weekend host Big Joe Henry. Any opinions expressed are Big Joe’s own.

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