Quarter-Million More NJ Residents Sign Up for Health Insurance Under ACA

Andrew Kitchenman | February 19, 2015 | Health Care
Enrollment deadline may be extended to allow others to avoid federal tax penalty for not having coverage

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More than a quarter-million New Jersey residents chose federal marketplace health-insurance policies ahead of last Sunday’s deadline, but some stragglers may get a second chance.

Federal officials are considering offering a special open enrollment period timed to coincide with the federal income-tax filing deadline. This would give people the opportunity to avoid a penalty for not being insured in 2015, which is required by the 2010 Affordable Care Act.

It’s too late to avoid a tax penalty for last year, the first year of the ACA’s individual insurance mandate.

Policy analysts say many people won’t realize the impact of remaining uninsured until they file their taxes this year. The penalty for 2014 is the greater amount of $95 per uninsured person or 1 percent of household income. The penalty rises to the greater of $325 per person or 2 percent of income this year, and the greater of $695 per person and 2.5 percent of income in 2016.

“People haven’t focused on the size of the penalty,” and actually being forced to pay it will be eye-opening, said John V. Jacobi, a health law and policy professor at Seton Hall University School of Law.

U.S. Health and Human Services regional administrator Jackie Cornell-Bechelli said federal officials are considering the special enrollment period.

Some of the states that operate their own exchanges have already announced they will allowing additional time to enroll, including Washington state officials who have announced that residents can enroll anytime between now and this year’s federal income- tax filing deadline of April 17.

In addition to the possible extension of the enrollment period, people who started an application but hadn’t completed by the deadline have been given until Sunday to complete it.

Cornell-Bechelli said the ACA’s second open-enrollment period, which began on Nov. 15, went smoothly. There was a surge of visits to healthcare.gov — the marketplace website — on Saturday and Sunday, ahead of the deadline, which resulted in some delays.

U.S. Rep. Frank Pallone said he was joining other members of Congress in asking for a special open enrollment period. He noted that the federal government far exceeded its goals for the open enrollment period, reaching 11.4 million people nationwide, compared with a goal of 10 million to 11 million.

“This is a fantastic result,” Pallone said.

A total of 252,792 New Jerseyans chose marketplace plans by the deadline. That amounts to about 40 percent of the estimated 589,000 state residents who were eligible to buy the insurance plans – and it’s comparable to nationwide enrollment rate of 41 percent for all states using the federal marketplace.

But there was a wide range, state by state, with the percentage of eligible residents enrolling for insurance varying from 17 percent in Iowa (where the dominant individual-market insurer chose not to participate in the marketplace) to 63 percent in Florida.

Heather Howard, director of the State Health Reform Assistance Network at Princeton University’s Wilson School, said the number of New Jerseyans enrolling in marketplace plans was good news, especially since most of them will be eligible for federal tax credits to subsidize their coverage.

Howard added that analysts will need to dig into the numbers to understand what is determining the different levels of enrollment success in different statess.

“But we do know that consumer assistance is very important, so one reason could be that those (assistance) programs, and related marketing campaigns, may have been more targeted and effective in certain states and regions,” said Howard, a former state health and senior services commissioner.

She noted that there was significant outreach to Spanish-speaking residents in southern Florida, which may have contributed to that state’s enrollment success.

State Sen. Nia H. Gill (D-Essex and Passaic), who has supported having New Jersey launching its own insurance exchange, said the federal government and local organizations worked together to make New Jersey’s enrollment effort a success.

“The message that was delivered, that health insurance was just a phone call or a click away, really took root,” Gill said.

Cornell-Bechelli credited Jersey City Mayor Steven Fulop and other local officials, as well as federal officials, with reaching out to residents to maximize enrollment efforts.

New Jersey made steady progress throughout the open enrollment period, ending with a flurry of more than 30,000 enrollments in the last nine days.

While the final number of Garden State residents who will receive federal income tax credits to subsidize their coverage hasn’t been released, 83 percent of New Jersey enrollees had been deemed eligible for subsidies through January 30. An average tax credit of $309 reduced the average monthly premiums for these residents from $481 to $172.

These subsidies could be lost if the U.S. Supreme Court rules against President Barack Obama’s administration in the case of King v. Burwell, which is challenging whether the ACA allows subsidies through the federal marketplace.

Jacobi said that if the court strikes the authority of the federal government to issue the tax credits, there would be two major problems.

One is that many residents would lose their coverage, since they would be unable to afford insurance without the subsidies.

The second is that the individual insurance market in New Jersey would be sent into upheaval, since those who are mostly likely to keep their coverage will be the sickest people with the greatest need for healthcare. This would lead to a spike in the cost of insurance premiums to cover the cost of the people who are still insured.

Jacobi said the state could still establish its own insurance exchange, which would be less expensive now than it was five years ago, since other states have developed exchange infrastructures that could be adapted by New Jersey. But Gov. Chris Christie’s opposition to the ACA could prove a difficult hurdle.

“Gov. Christie did expand Medicaid,” Jacobi said of the other major way that the ACA expanded coverage. “He made that judgment, so he’s obviously somebody who evaluates options and makes individualized judgments as to what’s acceptable and what’s not to him.”

Jacobi added that the cost to the state might ultimately determine how Christie would respond to a U.S. Supreme Court ruling eliminating the subsidies.