Report Points to Large Pool of NJ Residents Eligible for Insurance Subsidies

Andrew Kitchenman | March 28, 2013 | Health Care
Eligible New Jerseyans mostly young, employed -- and unaware of health benefit subsidies

U.S. Sen. Robert Menendez (D-NJ)
Roughly 610,000 New Jersey residents will be eligible for tax credits to purchase insurance through the state’s health benefit exchange, according to a report issued by national healthcare advocacy group Families USA.

Most members of this group are young, with 54.3 percent between the ages of 18 and 34, and employed, with 83.8 percent holding full- or part-time jobs.

The report, Help Is at Hand, was timed to increase awareness of who could receive federal aid to buy insurance, according to Ron Pollack, Families USA’s executive director. He noted that public opinion polls have found that most residents who will be able to receive these subsidies aren’t aware of that fact.

The health benefit exchange will be an online marketplace for individuals and small businesses to purchase insurance and learn about eligibility for subsidies. Tax credits will be available for all residents with income between the poverty line and four times the poverty line, currently $11,490 to $45,960 for single residents and $23,550 and $94,200 for a family of four.

“The tax credit subsidies are a game changer,” Pollack said.

The 2010 Affordable Care Act established the exchanges. Enrollment for the exchange is scheduled to begin on October 1, with insurance going into effect on January 1, 2014.

The Families USA report didn’t estimate how many of the 610,000 residents eligible for subsidies will choose to buy insurance. While the ACA mandates that all Americans be insured, some residents are expected to choose to pay penalties instead of purchase insurance.

The subsidies are on a sliding scale, with residents at the poverty line limited to spending no more than 2 percent of their income on insurance premiums, while those at 400 percent of the poverty line limited to spending 9.5 percent of their income.

The report provided instant fodder for ACA supporters, including prominent defenders of the law who joined the conference call announcing the report.

U.S. Sen. Robert Menendez (D-NJ) said the subsidies could make the difference in whether insurance is affordable or not.

Menendez said the financial benefits of the ACA would extend beyond those who receive subsidies, since expanding the number of insured will reduce the need for taxpayers to subsidize charity care.

“This benefits all of us,” he said, saying that taxpayers pay an average of $1,000 to subsidize charity care.

Menendez expressed frustration with Republicans in Congress who he said are trying to “slay” the law rather than “perfect” it.

U.S. Rep. Frank Pallone (D) emphasized that the effects of the law are already being felt, ahead of the January 1 launch of the exchanges. He pointed to a provision that is in effect that allows parents to cover their adult children until the age of 26. He said that the bill would make a significant difference for middle-class families who have struggled to buy insurance.

The individual insurance market has become increasingly unaffordable in recent years, according to Raymond J. Castro, senior policy analyst for New Jersey Perspective, a think tank focused on the needs of low- to middle-income families. The number of residents who purchase individual insurance has dropped from 186,000 in 1995 to 43,000 today, he said.

“Relief cannot come soon enough,” Castro said of the tax credits.

Castro warned that the state government must fund outreach efforts to ensure that residents are aware of the exchange subsidies.

Pollack said more than 75 percent of residents who will benefit from the subsidies aren’t aware of that fact.

“Our job is to make sure that people understand that help is on the way,” he said.