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For NJ Residents, It Could Pay to Look Beyond Premiums When Choosing Plans

Three insurers offer different provider networks, cost sharing through marketplace healthcare coverage

Linda Schwimmer, vice president of the New Jersey Health Care Quality Institute.
Linda Schwimmer, vice president of the New Jersey Health Care Quality Institute.

New Jersey residents looking to buy health insurance through the federal marketplace or exchange may focus on the monthly premiums, but healthcare experts say it may pay to weigh other factors.

Even if it residents have to stretch financially to afford more expensive plans, they could cost less in the long run by having lower copayments and deductibles, as well as offering a wider range of healthcare providers.

While problems with the marketplace website -- -- have made it difficult to complete insurance applications since the marketplace launched on October 1, residents can learn about available plans from individual insurers’ sites.

The 2010 Affordable Care Act established the marketplace as a one-stop shop for residents without coverage through an employer or government plan to purchase insurance and learn whether they are eligible for tax credits to subsidize the purchase, as well as other cost-sharing assistance.

Raymond Castro, senior policy analyst for New Jersey Policy Perspective, said that while consumers are presented with a difficult choice in picking an insurance plan, the ACA is not to blame.

“It’s complex and it’s not because Obamacare made it complex -- insurance has always been complex,” Castro said.

The decision requires residents to play the role of an actuary, weighing the risks of becoming ill with the benefits of having lower monthly bills.

Castro said the first step for residents is to determine whether they’re eligible for Medicaid. Gov. Chris Christie agreed to an expansion up to 138 percent of the poverty line, which amounts to $15,856 for a single person. Castro said many unemployed young people who live with their parents are eligible for the program without realizing it.

“It’s one of the best kept secrets in the state,” Castro said.

Beyond that, Castro advises residents to choose plans that may cost more but provide richer benefits -- both in terms of lower cost-sharing after premiums have been paid and in having wide provider networks.

“You never know when you need insurance,” Castro said. He said healthcare policy advocates have begun to refer to a “bronze trap,” in which residents choose a lower-premium plan -- known as bronze plans. The out-of-pocket cost sharing may be so high that these residents decide against visiting their doctors when they’re ill.

“I don’t think there’s any easy answer, except to really understand what it is you’re buying,” Castro said. Federal subsidies can be estimated through the Kaiser Family Foundation calculator.

Horizon Blue Cross Blue Shield of New Jersey, AmeriHealth New Jersey, and Health Republic Insurance of New Jersey are the three companies offering insurance through the marketplace. Despite the limited number of companies, consumers have a variety of choices to make, both in terms of health plans and in the amount they are willing to pay for premiums.

Other than a limited number of “catastrophic” plans, which are only available to residents younger than 30 and those who can’t afford more expensive plans, each health plan is categorized by the amount of cost sharing that residents can expect to pay once they’ve paid their premiums. Plans labeled “platinum” require residents to pay 10 percent of these costs, while “gold” require 20 percent, silver 30 percent, and bronze 40 percent. Bronze plans have the lowest premiums, while platinum plans have the highest.

For example, a 27-year-old Middlesex County resident has a choice of 26 “metallic” plans, as well as two catastrophic plans that are only available to residents younger than 30 and those who can’t afford more expensive plans.

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