NJ Senator Has Plan To Reduce Health Benefit Costs

Sep 24, 2018

Senator Paul Sarlo

A New Jersey lawmaker believes the state could save taxpayers a lot of money by hiring a private company to monitor the insurance companies that administer health care claims for state and local government employees.

Senate Budget Committee chairman Paul Sarlo says that would ensure the state gets the benefit of potential savings from bills settled between medical providers and the insurers.

“If the insurer is not at risk, the state Health Benefit Fund is at risk. The insurer petitions that for the funds to pay these providers and then ultimately are able to negotiate with the providers. The providers being the specialists, the hospital, the doctors. If they’re able to find a more economical way to pay the bill, that savings is not making its way back.” 

Sarlo says an independent administrator could make sure that happens.

“In the private sector we’re seeing across the country large places like Amazon. JP Morgan, Berkshire Hathaway, many of these have gone from taking the third-party administration away from their insurance carriers and brought it inhouse.  Because the just felt that having it inhouse they were going to be protecting their interests.”

The state Treasurer is conducting audits to identify other ways of reducing the costs for public employee benefits.