New program intended to curb rising health care costs in New Jersey
Gov. Phil Murphy announces the new Health Care Cost Growth Benchmark Program during a news conference on Tuesday, Dec. 21, 2021, at the Trenton War Memorial. (Photo courtesy of the governor’s office.)
Gov. Phil Murphy announced a new program Tuesday intended to study how much and why health care costs rise in New Jersey, with the goal of identifying ways to contain those costs.
Health care providers, insurers, and governmental officials will collaborate under the new Health Care Cost Growth Benchmark Program to quantify increases and identify their causes, Murphy said.
“Health care costs have grown faster than the economy for decades and continue to rise. Increasing costs are burdening New Jersey families, businesses and the state, resulting in decreased funding for other critical priorities, including education and housing,” Murphy said during a press conference in Trenton. “Understanding the drivers of these unsustainable price increases is the first step toward making the cost of health care transparent and ultimately affordable.”
The issue is especially timely given the stresses the pandemic has placed on the state’s health care providers during the past two years, the governor added.
Health care premiums and deductibles in New Jersey grew roughly three times faster than residents’ incomes from 2010 to 2016, according to the governor’s office. Premiums in 2016 equaled almost a third of median household income, and a May 2020 survey of more than 900 New Jersey adults found 77% worried about affording health care, the governor’s office said.
The program aims to reduce the annual growth rate of health care costs to 3.5% in 2023, and down to 2.8% by 2027, said Marlene Caride, the state’s banking and insurance commissioner. Because the pandemic is ongoing, next year will be a “transition year” with no specific target to lower health care costs, Caride added.
Average individual health insurance premiums rose nearly 8% for 2022 in New Jersey, according to healthinsurance.org.
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