In the committee rooms of the State House, New Jersey recently started saving its health insurance markets.
Since 1994, New Jersey has required insurers to cover essential benefits and to be open to all, despite health status. The ACA took our model, added the individual mandate, and provided subsidies to help low-income people afford premiums.
Now the Trump Administration has eliminated the individual mandate and wants to turn the reins over to the states. Rather than sit on our heels, New Jersey must act to preserve the coverage gains we’ve made under the ACA, ensure that coverage is affordable, and maintain the protections we’ve had here since 1994.
Two bills in the New Jersey legislature are moving forward to do just that.
The first would continue the federal individual mandate, but enforce it at the state level. Those who can’t afford insurance, even with subsidies, can apply for a waiver. The state mandate would be a valuable tool to make consumers aware of all of their options to help them pay for insurance and would bring more people into the market. Getting a range of people, both healthy and sicker, lowers the cost of insurance for everyone.
Indeed, we already require hospitals to care for people whether or not they have insurance and can afford the care. We need a way to pay for that care. Without the mandate, Jason A Levitis, an expert in health care and tax law, testified that premiums in the individual marketplace would jump 11 percent and leave 92,000 more people in New Jersey without health insurance. This bill would protect the fiscal viability of New Jersey’s health insurance market and keep insurance premiums down for all.
The second bill would create a reinsurance fund to cover the most expensive claims. By removing those claims, the overall costs of health care in the individual market decrease and premium costs become more affordable. The federal government is willing to work with states and provide a large share of the reinsurance fund costs. Based on our market participants and costs, experts have predicted that we could expect to see over half of the costs of the fund paid for by the federal government. The state share would come from a broad assessment spread across all health insurance plans to keep it as low as possible. Other reinsurance programs have successfully reduced rates by more than 15%. This bill offers a reasonable way to pay the highest claims while keeping overall costs down.
Waiting to see what happens on the federal level is not a good option. Now is the time for New Jersey agencies and leaders to work together. Strategic and budgetary decisions for 2019 must be made this spring. The Quality Institute and Senator Joe Vitale’s Health Care Reform Workgroup has been leading the effort to find shorter term solutions to save New Jersey’s insurance market to keep as many people in our state insured. These bills are two of several solutions on the table.
New Jersey has the opportunity to step in — and step up, but must act quickly.