Progress on Federal Insurance Enrollment, But Still a Long Way To Go

Andrew Kitchenman | January 16, 2014 | Health Care
New Jersey’s enrollees match national demographics, but fewer state residents choose minimal coverage

It’s becoming easier for New Jersey residents to buy health insurance through the federal marketplace, but the state is still challenged when it comes to signing up enough residents to meet the federal enrollment target.

That’s the upshot of the most recent federal release of enrollment information, which found that 34,751 New Jerseyans had enrolled via the marketplace, or exchange, through December 28. That’s a major advance over a month earlier, when just 3,259 New Jersey residents had used the marketplace to enroll in a plan.

The marketplace, which launched on October 1 and began offering coverage on January 1, is one of two main ways that the 2010 Affordable Care Act seeks to expand insurance coverage, along with an expansion in Medicaid eligibility.

But the marketplace website,, was difficult to access in October and November, slowing the enrollment process. The site is designed to compare health plans and allow residents to purchase insurance and learn whether they’re eligible for federal subsidies for insurance. To meet the ACA’s mandate that people must have health coverage, residents need to be insured by the end of the open enrollment period on March 31.

“The trend suggests that the technical problems have largely been overcome, at least on the consumer-facing side of the website — the trend’s in the right direction,” said Joel Cantor, director of the Rutgers Center for State Health Policy.

The demographics of the state residents who applied for insurance are similar to the national picture. For example, 79 percent of state residents who enrolled through the marketplace received subsidies, the same as the national percentage.

In addition, 23 percent of New Jersey enrollees are aged 18 to 34, 1 percent less than the 24 percent national figure. This percentage could prove to be a challenge to insurers, since the share of enrollees who are younger — and likely healthier — was expected to be higher. If there aren’t enough healthy residents buying insurance, it will lead to more costly monthly insurance premiums.

Too Soon to Say

But Cantor said it’s too soon to say whether the age of enrollees in the state will be a problem. He pointed to the example of Massachusetts — the first state to require nearly all residents have insurance. In Massachusetts, young adults were slower than older residents to enroll, waiting until right before the deadline.

“I think it’s premature to say that that’s a serious problem yet,” Cantor said.

In addition, some healthcare research has found that having a percentage of young adults similar to what New Jersey has seen so far could be sustainable. A Kaiser Family Foundation study found that if 25 percent of enrollees in the marketplace were younger than 35, it would lead to premiums that were 2.4 percent higher than if residents in that age group enrolled at the same rate as the rest of the population.

The pace of enrollments remains below targets set by the federal Centers for Medicare & Medicaid Services, which expected 45,120 by December 31 and 96,000 by March 31, which is the end of the open enrollment period for the marketplace. Open enrollment for 2015 will start again in October.

Cantor said he expects the state to exceed the federal target for March 31, but that it will take more time to reach an enrollment estimate that he projected in a 2011 study. In that study, Cantor estimated that 362,000 additional state residents would purchase individual health insurance as a result of the ACA.

Raymond J. Castro, senior policy analyst for New Jersey Policy Perspective, said the marketplace “has turned a corner” in its functioning. But he said the state doesn’t have a “whole lot of time” before the end of open enrollment.

A Positive Trend

Castro pointed out one enrollment trend that he sees as positive — fewer New Jersey residents than those in most other states are choosing lower-cost plans that require enrollees to pay more in out-of-pocket expenses.

Health plans sold through the marketplace are set at one of four levels, named after different precious metals. Platinum plans have the highest premiums, but they will cover an estimated 90 percent of healthcare expenses with enrollees covering 10 percent of costs out of pocket. Gold plans have an 80 percent-20 percent split; silver plans, a 70-30 split; and bronze plans, a 60-40 split.

Castro noted that only 12 percent of New Jersey enrollees have chosen bronze plans, compared with 20 percent nationally.

“I think that’s a good thing, because these bronze plans have such high levels of cost sharing” that enrollees may not seek treatment due to high out-of-pocket costs, said Castro, adding that New Jerseyans are “willing to pay a little extra in order to get more coverage.”

Castro said it wouldn’t be easy to get more young people to enroll.

In October through December, “we reached the folks who are easiest to reach” – those who were more likely to have health problems, Castro said. By March, a concentrated effort to reach out to younger residents is necessary, Castro said.

Castro is part of a coalition, New Jersey for Health Care, which has asked Gov. Chris Christie’s administration to spend $7.6 million in federal funds on advertising and outreach for the marketplace.

The recent federal enrollment report also identified another trend: States that operate their own insurance exchanges are enrolling residents at a faster rate than those like New Jersey that are relying on the federal marketplace.

According to an analysis by the nonprofit Transamerica Center for Health Studies, the number of marketplace enrollees in New Jersey equals 12 percent of the state’s uninsured population. That is similar to the national rate, with the 2.15 million enrollees equal to 12.43 percent of the uninsured population.