New Jersey generally requires health insurance plans to cover a wider range of services than many other states, but a provision of the Affordable Care Act will likely have lawmakers checking the bottom line before adding any new mandates.
That’s because the act requires a state to fully reimburse an insurance provider for the cost of any mandate that drives up the price of a policy offered through the online health exchange. The proviso only applies to services added after January 2012.
“I think the theory was that if the federal government was going to provide subsidies to folks to be able to get coverage, they didn’t want states tacking on a number of laws to make coverage very expensive,” said Wardell Sanders, president of the New Jersey Association of Health Plans, the state trade association for insurance companies.
There are roughly 30 bills advancing in the state Legislature that could raise the cost of insurance sold through the exchange. But insurance industry officials indicated that while the state has started to track the potential fiscal impact of these bills, it’s too early to say how much future mandates could cost New Jersey.
The bills include a measure that would require insurers to cover ultrasounds for women whose mammograms determine that they have extremely dense breast tissue (which may indicate an elevated risk of cancer), as well as one that would mandate quicker access to powerful pain relievers.
New Jersey’s health insurance exchange is slated to launch October 1; individuals and small businesses can purchase coverage starting January 1, 2014. Subsidies will be targeted toward residents between 138 percent and 400 percent of the poverty line, which currently amounts to between $15,856 and $45,960 for individuals and $32,499 and $94,200 for a family of four.
The state currently mandates 35 different services, 32 of which were passed before 2012.
It’s not clear whether one of the the three mandates passed since then — requiring coverage for sickle-cell anemia treatments, early refills for prescription eye drops, and oral anticancer medications — will trigger additional costs for exchange plans and the state. The other two mandates passed since then won’t raise costs.
But the ACA provision could lead to a slowing of legislative action on new mandates, since lawmakers may be wary of adding to the state budget.
While the ACA may lead to fewer new state mandates, the 2010 federal reform also added some mandates of its own for insurance offered through the exchange. In New Jersey, these are dental and vision care for children.
The insurers must calculate the cost of the mandate and report it to the exchange, which will be operated by the federal government in New Jersey.
“It’s a message we’re trying to get across, and I know the fiscal notes are starting to include it,” Sanders said, referring to the analyses done by the nonpartisan Office of Legislative Services that estimate the future cost of legislation.