New Jersey is on the verge of becoming only the sixth state to return to the federal government a multimillion-dollar grant intended to help build Affordable Care Act insurance marketplaces.
The potential impact of that decision was outlined in a report, released yesterday by the nonprofit New Jersey Policy Perspective, which found that up to 95,000 more state residents would enroll in health insurance if the state used the $7.67 million grant for outreach.
The state must , by February 20, come up with a proposal acceptable to the federal government for how the grant will be spent or else the federal government will take back the funding.
The state was given the money to build its own state health insurance exchange, where residents and small businesses could buy insurance and learn whether they were eligible for insurance subsidies. Gov. Chris Christie instead decided to have a federally operated insurance marketplace.
Since Christie’s decision, state and federal officials have been in talks about how the $7.67 million grant would be spent, but time is running out.
State officials haven’t said how they would like to spend the money, but healthcare advocates predict the state would easily receive federal approval to spend the money on outreach related to the insurance marketplace.
New Jersey Policy Perspective senior policy analyst Raymond J. Castro said using the money for outreach would help efforts to inform difficult-to-reach uninsured residents about their options under the 2010 Affordable Care Act.
Castro cited an estimate that 17 percent of the uninsured in the state live in a household in which no adult speaks English. He also noted that many other uninsured residents have mental illness or substance-abuse issues.
Targeted efforts to reach those residents could be achieved with that $7.67 million, he said.
If the federal government takes back the money, efforts to reach New Jersey’s uninsured “will take a huge hit and they will be kept in the dark,” Castro said.
Castro wrote the new report, which found that using the funds for outreach would result in up to 95,000 more residents being insured. He derived that figure by contrasting earlier estimates by Rutgers Center for State Health Policy researchers, which assumed an intensive outreach effort, with later Congressional Budget Office estimates, which were based on less intensive state-level outreach.
U.S. Rep. Rush Holt (D-West Windsor) said that “in too many places in the country people are being cut out of this because of the politically ideological positions” of senior state politicians, adding that he doesn’t want to see New Jersey join these ranks.
“There are hundreds of thousands of New Jerseyans who could be in the (insurance) system, who should be in the system,” said Holt, who recently sent Christie a letter urging him to spend the money.
Holt, who joined Castro in a conference call yesterday regarding the report, later added: “I think we have to say the state has been nothing but obstinate.”
Every state but Alaska applied for and received federal grants to plan an insurance exchange. Only Oklahoma, Kansas, Louisiana, Maine and Wisconsin returned their funding to the federal government without spending it. No state that received the same type of grant that New Jersey received – a Level One Establishment Grant – has returned the money so far, whether or not they eventually created their own exchange.
New Jersey Citizen Action health policy analyst Maura Collinsgru emphasized that many residents still don’t understand how the ACA affects them, including whether they are eligible for subsidies to buy the insurance.
“Up until now, the governor has really taken a hands-off approach, but he has moved now to obstructing access” with this stalemate, Collinsgru said. She said Christie’s “pervasive silence” on the opportunity to insure more of the state’s roughly 1 million uninsured residents is troubling.
The subsidies are available for residents with incomes between 138 percent and 400 percent of the poverty line, which amounts to between $15,856 and $45,960 for a single person and between $32,499 and $94,200 for a family of four.
Chrystal McDonald, organizing director for faith-based advocacy organization PICO New Jersey, said it is difficult to reach some groups without more federal funding.
“What we need to see more of clearly is outreach and education, particularly with low-income, low-literacy populations around the state,” McDonald said. She said a media campaign could be part of such an outreach effort.
State Department of Banking and Insurance spokesman Marshall McKnight said that state officials are continuing to talk with federal officials about the “appropriate use” of the funds. He declined to comment further on the criticism from Holt and Collinsgru.
New Jersey organizations have received roughly $8 million in federal funding for insurance outreach, including money for federally qualified health centers and for navigators, which are nonprofits that provide outreach and enrollment assistance in distinct geographic areas.
However, this money pales in comparison with funding received by states that established their own exchanges. For example, Maryland received twice as much in federal outreach funding despite having a population that is roughly one-third lower than that of New Jersey.
The deadline for residents to enroll in the marketplace is March 31 to avoid paying a penalty on their 2014 tax return filed in April 2015. The penalty will be the greater amount of $95 or 1 percent of the resident’s income.
Collinsgru noted that beginning the process of spending the money now may not affect residents before the deadline, but would better inform uninsured residents about their options ahead of the next open enrollment period, which will begin on November 15, 2014, and last until January 15, 2015.
Through December 28, 34,751 state residents had enrolled for insurance through the marketplace. While the pace is below federal forecasts, much of the sluggishness is due to the problems the marketplace’s website, healthcare.gov, experienced in October and November.