News Release: May 19, 2003
Contact: Steve Wilson, ext. 245Legislation creating a Healthcare Mandates Advisory Commission is essential to controlling costs and making health insurance more affordable for employers and their employees, NJBIA President Philip Kirschner said today.
NJBIA strongly supports S-2275 (Bennett, Codey), which was approved May 19 by the Senate Health Committee. The bill would establish the Healthcare Mandates Advisory Commission to review all proposed mandates for their cost impact before legislative action is taken. Establishing such a commission is one of the goals of NJBIA's 2003 Economic Growth Agenda.
NJBIA member companies experienced an average premium increase of 15 percent in 2002 and are paying an average of $6,325 per employee for health insurance. Over the last three years, health insurance costs have risen at a compound rate of 35 percent. Companies are expecting another 14 percent increase this year.
Kirschner said one of the factors driving up the cost of health insurance is a legislative mandate that require insurance companies to provide coverage for specific conditions, whether or not consumers want or need them. Estimates show that such mandates account for as much as 20 percent of the entire insurance premium. For the average NJBIA member, that equals more than $1,200 per employee.
"The problem is each mandate may not seem very costly by itself," Kirschner said. "But taken together, they become a tremendous financial burden on employers of every size, as well as on employees and taxpayers. Legislative mandates are forcing employers to increase deductibles and copays to meet their soaring costs. These cost hikes also force state and local government to raise taxes to pay the higher premium costs for government workers.
"This bill offers a solution. The Commission would be a valuable resource tool for policymakers by charging this Advisory Commission to assess the financial, medical and social impact of proposed health benefit mandates before they are enacted into law," Kirschner said. "Viewing all the mandates in their totality will also provide some perspective on the total costs of all mandates."
With more than 20,000 member companies, NJBIA is the largest state-level employers association in the nation.
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