Roundtable: What’s Next for the ACA and a Health Insurance Exchange in New Jersey?
Now that the Affordable Care Act has been declared constitutional by the U.S. Supreme Court, states must scramble to implement the law by deadlines set forth in the legislation or risk being noncompliant and losing federal funding for many provisions. On Friday, July 13, NJ Spotlight hosted a roundtable discussion at Montclair State University with healthcare advocates to discuss the issues that now must be addressed, as well as the various positions of stakeholders and the requisite timetables.
On the panel were Sen. Joe Vitale, D-Middlesex, chair of the state Senate health, human services and senior citizens committee; Joel Cantor, director of the Center for Health Policy at Rutgers; Jeff Brown, coordinator of policy advocacy and communications for Citizen Action; Neil Eicher, deputy director of policy, New Jersey Hospital Association, and Ward Sanders, president, New Jersey Association of Health Plans.
Given the tone of national rhetoric it was surprising that all those on the panel agreed they were ready to get going with implementation, although some voiced differences when it came to policy choices. The following is a rundown of the issues that are facing New Jersey regarding the implementation of the ACA:
HealthCare Insurance Exchange: Should New Jersey Build Its Own or Let the Feds Do it?
The state has only until November 16 to notify the federal government that it plans to build its own healthcare insurance exchange -- if it wants to obtain funding for it. Although Gov. Chris Christie says he has until January 2013 to indicate his preference, the reality is that unless the federal government changes its timetables, the state must declare its intentions less than two weeks after the November election. (Officials privately believe that Christie wants to wait until after the election to signal his position.)
Sen. Joe Vitale said the legislature will continue to work on the bill calling for a New Jersey exchange (), which was in a previous form earlier this year. Vitale said contrary to appearances, the governor’s office has also been hard at work preparing a response to the ACA. Although he says he has not conferred with the governor’s office regarding the exchange bill, it might be possible to meet the first deadline.
The exchange itself is envisioned as an online marketplace through which individuals and small businesses can purchase health insurance. It is expected to have all insurance plans listed so that visitors can compare costs, see which providers are in which networks, and learn of quality ratings and other details. It will have phone hotlines and other support for those accessing the information and will be governed by an independent board. Anyone seeking a subsidy for health insurance will be required to purchase coverage through the exchange, so the technology will have to be able to check tax and employment records to determine eligibility. The technology underlying the exchange will require a high degree of sophistication, Sanders noted, as there are knotty issues such as how do you accept payment for a plan that is partially subsidized?
For this reason, Sanders and others noted that the timeframe for implementation is extremely tight. For instance, insurance providers must be ready for open enrollment through the exchange by October 1, 2013. Indeed, Vitale says he anticipates that the federal government will loosen some of the deadlines -- although it is not clear which ones -- because there is so much to do before 2014, when many of the provisions are to be enacted.
Overall, no one on the panel advocated having the federal government set up the exchange for the state. As Brown said “New Jersey knows New Jersey best,” but there also was openness to having a hybrid model, in which the federal government provides the technology and the state runs the exchange. However, Cantor noted that most stakeholders agree that New Jersey should certify the plans in the network, not the federal government, and should be in charge of consumer outreach and education. If the exchange is left to the federal government, they would take over those responsibilities.
If notified by November 16 that New Jersey wants to set up its own exchange, the federal government will provide the underlying funds for the first year. After that, the exchange must be self-funded through some type of fee or sales commission, whether or not it is run federally or by the state.
Should New Jersey’s Exchange Follow an Active- or Passive-Purchaser Model?
The ACA allows each state, if it runs its own exchange, to determine how active to be in certifying plans that are on offer. The bill vetoed by the governor called for the exchange board to certify plans based on an optimal combination of choice, quality, service, and cost. One of Christie’s stated objections to the bill was that by certifying plans, it would limit competition.
Brown said the idea of an active-purchaser model was not black and white but rather runs along a continuum and that he thought the best approach for now was to give the Insurance Exchange Board the tools to implement the approach that they see fit.
Sanders, on the other hand, said the issue was “somewhat academic” in New Jersey because “we do not have 40 plans competing for the same populations.” However, he noted that screening out providers could end up hurting consumers in some cases because the decision regarding what plan to join is so complex. It includes issues not just based on cost and quality but also whether providers are available locally. The consumer, he said, might be the best judge.
What Should the Makeup of the Health Insurance Exchange Governing Board Look Like?
In the state legislation, members of the exchange governing board were to be independent and paid $50,000 a year. Christie cited objections to these provisions in his veto message, saying it didn’t represent all stakeholders and would add to the expense of creating the exchange
Vitale said that what was envisioned was a relatively small working board, made up of members that “get” the issues but would not have conflicts, to oversee the exchange. Members would be appointed by both the governor and the Legislature and have a relationship with the state Department of Banking and Insurance, but would operate independently, possibly as an authority.
Sanders noted that a large board would not get anything done and warned that the issues “get enormously complicated very quickly” and for that reason, would need industry representation. Brown countered that “you can’t have regulators being the ones regulated” and that the board needs to avoid all appearances of conflicts of interest. He added that you can’t expect the industry to screen not only itself but its competitors.
Eicher also suggested that his members would like to have a voice on the board, and believed hospitals have a very real role to play to ensure that insurance networks have an adequate pool of health providers available.
Vitale was of the opinion that one answer might be the creation of an advisory board or boards for the governing board to rely on.
The Expansion of Medicaid to 1.5 Million Uninsured Adults
Although not directly related to the creation of a health insurance exchange, Vitale and others brought up the issue of whether the state should accept the ACA and expand Medicaid to New Jersey's uninsured.
Cantor says his office estimated that the ACA’s call to expand Medicaid to anyone who does not have insurance but has an income up to 133 percent of the federal poverty level would mean 440,000 people would be added to the Medicaid rolls, a drop of 40 percent in the number of uninsured. (For an individual, that would amount to about $11,000.) His office also estimates that another 360,000 people that do not have group insurance might be able to obtain it through the exchange. That would bring about 800,000 under the insurance umbrella, reducing the need for charity care. The state now pays about $700 million a year to hospitals for charity care.
Charity care would not be eliminated for a number of reasons, not the least of which is that undocumented workers would not be eligible to obtain insurance on the exchange.
Christie’s public comments that he didn’t think New Jersey could afford an expansion of Medicaid because it already offers a generous Medicaid program “is just ridiculous” said Vitale. Unless you have an income of 26 percent of the federal poverty level, or just a few thousand dollars, individuals without children are not eligible in New Jersey for Medicaid. Adults only qualify for Medicaid (unless disabled) through their children, the idea being that if an entire family can sign up, it will.
The ACA calls for the federal government to pay 100 percent for new Medicaid enrollees until 2016, when it will start paying 90 percent. (Currently, the federal government and the state each pay 50 percent for Medicaid.) “If we don’t do this, we will leave a few hundred thousand people without access to any health program” said Vitale. The state would also be turning away full funding for several years and then have to provide only 10 percent of the cost for the foreseeable future.
Should New Jersey Create a Basic Health Plan?
The ACA allows states to create a basic health plan, which is essentially an extension to the Medicaid network for those earning between 130 percent and 200 percent of the federal poverty level. Cantor estimates that 75,000 people in the state might be eligible, and he says that initial studies show strong stakeholder support of the idea. Cantor says that many people in that band of income may fall in and out of eligibility for Medicaid. By aligning a basic health plan with Medicaid it can ensure a continuity of care.
However, the state would have to provide the funding. The initial legislation vetoed by Christie called for the plan’s creation. Christie objected to this provision citing cost concerns.
What Are Navigators and How Are They Selected?
The ACA calls for insurance “navigators” to be selected and trained to help educate and guide the public through the process of plan selection. The vetoed legislation called for the health insurance exchange board to certify navigators, which could be individuals, employees of the exchange, nonprofit groups, or even insurance brokers. Funding for navigators is not provided for by the ACA, but all agreed that their role is critically important, particularly for underserved and hard-to-reach populations, such as Latinos or the urban poor.
Indeed, the issue of navigators brought the discussion back to timing. It will take time, energy, and money to market the new health plan. And although the federal government is providing marketing, training and education funds through 2014, that’s not much time to roll out the program and get it working properly.
“The timing is such is that we can’t have an enormously complicated exchange out of the box, with all the bells and whistles,” said Sanders. “We need to start simple and add the bells and whistles as we go forward.”