Steinhardt: Before New Jersey asks teachers and taxpayers to pay more, it must open the PBM black box

Key points

• New Jersey faces recurring requests for increased teacher and taxpayer contributions to healthcare costs
• Pharmacy benefit managers operate with limited transparency despite major impact on healthcare spending
• PBM practices warrant examination before pursuing additional revenue from taxpayers
• Healthcare cost increases drive state budget pressures affecting education funding
• Public accountability in healthcare administration should precede requests for increased contributions

FAQ

What are pharmacy benefit managers (PBMs)?

PBMs are intermediaries that manage prescription drug benefits for health insurance plans. They negotiate drug prices and determine coverage, but their operations often lack public transparency despite significantly affecting healthcare costs.

Why should New Jersey examine PBM practices?

Examining PBM operations could reveal ways to control healthcare costs before asking teachers and taxpayers to pay more. Increased transparency might identify inefficiencies or practices inflating costs.

How do PBMs affect New Jersey's budget?

PBM practices influence health insurance premiums for teachers and public employees, which impacts state and local budgets. Rising healthcare costs due to PBM negotiations contribute to overall budget pressures.