Governor Christie is engaged in outright deception and bullshit.
Look at these numbers. Look at the deal Public Sector employees get over Private Sector. #FWIWW pic.twitter.com/TDlRRODj7Y
— Governor Christie (@GovChristie) March 11, 2015
So where is the bullshit?
Look at the fine print. The state employee data is the expected premium cost* of a 62 year old with family coverage. The comparison cost is the average privately covered employee in the state of New Jersey.
The average private sector New Jersey worker gets a family health plan with approximately an $18,000 per year total premium. That is roughly $1500 per month. The typical private sector plan will be a high Silver or a low Gold. The state of New Jersey is offering high platinum plans for a total premium of under $1,800 per month for a family.
There is one technical piece of bullshit. New Jersey is self-insured, it pays all of its medical bills and bears all the medical risk. It contracts with two insurers for administrative support only (ASO) contracts to run claims and deal with member complaints. If New Jersey was fully insured, it could get a per age band price as it has to offer roughly the same plans to all eligible employees. The young subsidize the old to a far greater degree in employer sponsored coverage than on the Exchange.
Now the flaming pile of bullshit is far greater. It is the age comparison. 62 year olds are expensive to cover as they have the pre-existing condition of being old. The average covered worker in the New Jersey private sector is probably in their late 30s or early 40s. As I explained earlier today, case mixture is important for any side by side comparisons. Age is driving the vast majority of the difference in total costs.
Let’s look at Health Sherpa for some examples for relative pricing depending on age. It won’t be a perfect comparison, but it will put us in the neighborhood. Family 1 will be a pair of 62 year olds, a 17 year old and a 15 year old. Family 2 will replace the adults with 41 year olds. All will be non-smokers. All plans will be the least expensive Horizon Blue Cross/Blue Shield if possible, as they are the low cost ACO for the New Jersey state employee plan. If not, I will take the lowest cost plan in the metal band.
State Employee Horizon 15 $1,793 for Family A or B
Newark Family A: Silver $1,733, Gold $2,369 Platinum (not offered by HBCBS,) Oxford plan $2,642
Newark Family B: Silver $957, Gold $1,308, Platinum (not offered by HBCBS) Oxford plan $1,459
Trenton Family A: Silver $1,733, Gold $2,369 Platinum (not offered by HBCBS,) Oxford plan $2,642
Trenton Family B: Silver $957, Gold $1,308, Platinum (not offered by HBCBS) Oxford plan $1,459
As you can see, just changing the ages of the adults from 62 to 41 basically cuts the plan premium cost by 40% to 50%. A 62 year old state employee costs the state of New Jersey a lot of money because s/he is old not because they are ripping off the state or the taxpayers. Those costs are covered by the twenty and thirty somethings while the forty somethings basically cover the other people who don’t quite want to admit that they are middle aged.
Let me finish this post off by revisiting the greatest blog post ever:
Good ideas do not need lots of lies told about them in order to gain public acceptance. I was first made aware of this during an accounting class. We were discussing the subject of accounting for stock options at technology companies….
Our lecturer, in summing up the debate, made the not unreasonable point that if stock options really were a fantastic tool which unleashed the creative power in every employee, everyone would want to expense as many of them as possible, the better to boast about how innovative, empowered and fantastic they were.
AND
We also learned in accounting class that the difference between “making a definite single false claim with provable intent to deceive” and “creating a very false impression and allowing it to remain without correcting it” is not one that you should rely upon to keep you out of jail. Even if your motives are noble.