State
retirees facing big hike in drug fees
Shift expected to save program
$16 million
Wednesday, December 21, 2005 • BY DUNSTAN McNICHOL
• Star-Ledger Staff
State officials yesterday adopted a
change to New Jersey's retirement package for teachers and
public employees that nearly doubles the maximum amount
retirees must pay toward prescription drugs each
year.
The decision to raise the maximum annual
copayment for prescriptions from $552 to $1,000 is designed
to save about $16 million a year from a health insurance
program that is on track to cost $430 million next year. It
was approved 3-2 by the State Health Benefits Commission,
with little discussion.
Of the savings, about $9.5 million is
expected to be realized by the state, which bankrolls
retirement benefits for teachers and state workers. Local
governments and workers will realize the balance of the
savings.
The higher copayments will affect about
51,000 of the 208,000 retirees covered by the state Health
Benefits Plan, state records show.
Union officials decried the change as an
unfair and unauthorized erosion of negotiated benefits
which, they said, targets the most vulnerable public
employees for additional expenses.
"It's an 80 percent increase for retirees
on fixed incomes -- totally unnecessary economically," said
Alan Kaufman, a representative of the state's largest public
employees union, the Communication Workers of America. "You
can save a lot more money than by shifting $9.5 million onto
retirees who can't handle it."
Tom Vincz, a spokesman for the Treasury
Department, called the change reasonable and
fair.
"This change will help mitigate the
upward spiral of health care costs while protecting the most
vulnerable," he said.
The change is part of a growing campaign
to rein in public employees' pension and benefit costs,
which are expected to rise from $2.3 billion this year to
$6.7 billion within four years.
Dunstan McNichol covers state government issues. He may
be reached at dmcnichol@starled ger.com or (609) 989-0341.
© 2005 The Star-Ledger. Used by NJ.com with
permission.
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