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Health Insurance Sign-Ups Hold Steady, But More Fail to Keep Up With Premiums

Coverage drop-outs may also be tied to problems proving citizenship and discrepancies in income figures used to calculate subsidies

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A report on enrollment in the federally operated health-insurance marketplace is a case of good news-bad news for New Jersey.

The good news: With 194,194 residents enrolled, New Jersey continues to keep pace with national enrollment numbers, which are expected to meet the federal goal for sign-ups this year.

The bad news: There continued to be erosion in the number of eligible residents keeping up with their monthly premium payments to stay insured.

For advocates of expanding access to healthcare, the takeaway from the report is s that it’s all the more important that the open enrollment period beginning on November 1 is successful – and that the state government should help make that happen.

But that’s unlikely to occur, since Gov. Chris Christie’s administration has taken a hands-off approach to promoting the marketplace, which is a central feature of the Christie-opposed Affordable Care Act.

And more challenges are on the way, including expected double-digit-percentage price increases for some marketplace plans.

The report represents an enrollment decrease of more than 14,000 residents since March, a drop attributed to a combination of some people being unable to enroll because they weren’t able to prove citizenship or legal residency and some people losing subsidies because the income they submitted on their application didn’t match federal records.

New Jersey Citizen Action health policy advocate Maura Collinsgru is concerned about the rate of growth in reported enrollment, which is only 56,000 more than were enrolled at the same time in 2014 – a smaller increase from the second open enrollment period than analysts had projected during the winter.

“We don’t really don’t know why these numbers have declined like they have,” Collinsgru said of the latest report, adding that she would like more of a breakdown from the federal government on why there was a 14,000-person decline since March – and whether it was a lack of affordability or applicants’ citizenship status that was driving the decline.

There’s been an even larger drop since March, when 254,316 attempted to enroll. But healthcare analysts weren’t alarmed by that decrease, since it was always deemed likely that many of those people wouldn’t follow up by paying monthly insurance premiums necessary to complete enrollment.

“I think the Affordable Care Act is acting the way it was supposed to” in the state, said Raymond J. Castro, senior policy analyst for New Jersey Policy Perspective, a left-leaning think tank.

Most receive federal subsidies

That includes the fact that 83 percent of those who enrolled received federal income tax credits that subsidize their premiums. And most of them – 98,463 New Jersey residents -- also receive additional financial support to share the healthcare costs that they have to pay out of pocket.

While the subsidies are available for households with incomes up to 400 percent of the poverty line, equal to $47,080 for a single person or $97,000 for a family of four, the cost-sharing assistance is limited to those with incomes up to 250 percent of the poverty line, or $29,425 for a single person or $60,625 for a family of four.

“That’s critical in our state, because the costs are so high,” Castro said of the subsidies and out-of-pocket cost-sharing.

But Castro noted that the out-of-pocket cost-sharing assistance decreases, the more families earn. A family of four with income of $48,500 faces an annual deductible (the out-of-pocket costs that must be paid before insurance kicks in) of $2,000, he said.

Noting that most families at that income level don’t have the disposable income to meet those costs, Castro said the state should be making an effort to reduce healthcare costs overall.

“Healthcare still is very expensive for New Jerseyans, and I don’t think we can rely entirely on the Affordable Care Act,” Castro said, noting that the federal law was primarily focused on increasing access to care.

Castro said one way to lower costs would be to enact proposed legislation that is intended to reduce the frequency of surprise medical bills that result from patients receiving healthcare from hospitals and doctors outside of their insurance networks.

The bill would mandate arbitration between providers and insurers to settle payment disputes; create a publicly available index of in-network healthcare payments that would be used in arbitration decisions; and require providers to inform patients about the projected cost of services.

Opponents of the bill say that it asks it’s too heavily weighted in favor of insurers and would amount to the government setting payment rates.

But Castro said the state should go further, including reviewing proposed insurance rate increases to make sure that they’re justified. Currently the state relies on requiring insurers to pay at least 80 percent of the money they collect in premiums on healthcare claims, known as a “minimum loss ratio.” This discourages them from charging an excessive amount, since it limits the amount of any increase that insurers can keep in profits.

“There are other states that go beyond that,” Castro noted, citing New York as an example of a state that both applies both minimum loss ratios and an additional round of state reviews that can lower premium increases.

Rate hikes on the horizon

It’s not yet clear how much the marketplace premiums will increase since any increases must undergo state regulatory scrutiny before they’re finalized. However, four of the six marketplace insurers have proposed double-digit premium increases: Aetna, 30.3 percent; Health Republic of New Jersey, 17.99 percent; Horizon Blue Cross Blue Shield of New Jersey, 10.8 percent; and UnitedHealthcare, 15.65 percent. The other insurers – AmeriHealth New Jersey and Oscar Health Insurance -- are proposing increases of less than 10 percent, the threshold for reporting the proposals to the federal government in June.

Collinsgru responded to the proposed premium increases by noting that 83 percent of marketplace enrollees receiving subsidies are partly shielded from increases by the tax credits. The ACA mandates that premiums can’t exceed 9.5 percent of household incomes.

But Collinsgru agreed with Castro that cost remains a concern, especially for those who are receiving little to no subsidy . She said some people may become more willing to enroll next winter when they learn that the federal penalty for violating the ACA’s requirement that everyone have insurance coverage mandate has increased. This penalty will rise to the greater amount of $695 per person or 2.5 percent of household income in 2016, up from $325 per person or 2 percent this year.

“It really does resonate with people,” she said of the penalty.

Collinsgru said the federally funded health insurance navigators and certified application counselors counselors, including some with her own organization, have their work cut out for them.

“Here in New Jersey, you have no formal state-assisted outreach on the marketplace – that’s all driven by social service and nonprofit agencies and elected officials who in fact have seen the benefits and want to connect individuals with coverage,” she said.

Castro said that he hasn’t seen the Christie administration approach the rising cost of healthcare with the same urgency that it approached rising Medicaid costs in 2010 . That led to the comprehensive Medicaid waiver, which is expected to put a downward pressure on costs.

Castro said that even though New Jersey marketplace enrollments are tracking the national numbers, the state should be doing more.

“The bottom line is, we’re not enrolling people fast enough -- I don’t think there’s any question of that,” he said.

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