By Vin Gopal
Consolidation of healthcare services in education offers an opportunity to help individual school districts address the rapidly rising cost of healthcare premiums.
Healthcare premium increases are forcing school districts to cut programs and layoff teachers, causing a crisis as they prepare their budgets for the 2026-2027 school year. We are moving to address this crisis by putting structural solutions in place. By consolidating healthcare services we can help contain their rapidly rising cost and develop a system that provides reliability and affordability for the school districts, educators, and taxpayers.
My LD11 partners, Assemblywomen Margie Donlon and Luanne Peterpaul, and I have previously introduced legislation to reduce duplication by consolidating some of New Jersey’s more than 600 school districts. That effort, if it becomes law, will take time to structure and implement.
But we can move more quickly to consolidate healthcare premiums, which is why I have introduced legislation to create the Public School Employees' Health Benefits Trust Act. Rather than hundreds of districts shopping for their own health insurance, we need to consolidate the coverage and leverage the purchasing power of tens of thousands of employees with similar plans. With that critical mass, we can negotiate better terms, control costs, and provide stability to the districts, their employees, and property taxpayers. Bringing every district together under one umbrella will fundamentally shift the way we can approach the delivery of health care to assure continued high quality at controlled and predictable costs. Assemblywomen Donlon and Peterpaul have introduced the legislation in the Assembly.
It just makes sense. The entire premise of insurance is to have a big pool of insured people so that risk is spread out and the system can remain stable as it absorbs risk.
Along with consolidation we should consider a new approach to oversight. Currently the State Employees Health Benefits Program (SEHBP), which insures a fraction of all districts, lacks the flexibility to respond to the changing healthcare landscape. That has resulted in untapped costs savings and steep rate increases. Rather than a Commission in the Office of Pension and Benefits, we should consider managing the health plan under a labor-management board that is a fiduciary to the plan. As a fiduciary, the board would be obligated to act with transparency and accountability to put plan beneficiaries over the business interests of the insurance companies. The lack of transparency prevents individual districts from understanding the full landscape, which is essential to making the best decisions for teachers.
In addition, a labor-management board with a fiduciary obligation will be charged with implementing all possible means to provide the required benefits at the lowest possible cost. The board would be charged with constantly innovating and improving, rather than struggling under the limitations posed by the lack of transparency and the constraints of state procurement and contracts.
When we consolidate, we are all in it together, and we can work to implement structural solutions. With all districts in one system, we can negotiate and implement cost saving measures across the entire state. We can collaborate with hospitals to attain cost predictability, for example. When there is a lack of transparency it prevents individual districts from understanding the full landscape of relationships that are essential to making the best decisions for teachers.
New Jersey has some of the best public schools in the country. But no one benefits if the system continues along its current trajectory of rapidly rising healthcare premiums. When we all come together to work collaboratively to find solutions, our students, our schools, our educators and our taxpayers benefit.
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