Opinion: Taking Stock of New Jersey Health Insurance Coverage Under Obamacare

Joel C. Cantor | June 17, 2016 | Opinion
Overall grade: B+, a respectable showing for the notoriously complex Affordable Care Act, but raising that rating is going to be difficult

Joel C. Cantor
As a health policy professor, I’m often asked by skeptics, supporters, and just regular folks what I think about Obamacare. Is it a good thing? Is it working? My first response, like any true academic, is, “It’s complicated.”

Even to a casual observer, however, the Affordable Care Act is indeed complicated. That complexity reflects that lawmakers sought to maintain as much of the healthcare status quo as they could in crafting the reform law. (Remember President Barack Obama’s now notorious statement that “If you like your health plan, you can keep it”?) That vision (whether you think it was achieved or not) means that the ACA would inevitably be fraught with complexity. Patching a complex system can be nothing other than complex.

The multifaceted goals of the ACA also make it complex: bringing America closer to universal coverage, fixing health insurance, improving quality of care, reducing inequalities, stemming rising costs, and more.

But focusing on what is perhaps the foremost goal of Obamacare — covering the uninsured — I’d give it at least a B+.

The latest federal data on health coverage bears this out. In the first two years of the main coverage provisions of the ACA, the number of uninsured declined across the country by 16.2 million. The share of the population age 18-64 (non-elderly adults are most likely to lack coverage) declined 7.6 percentage points from 20.4 percent in 2013 (before the reforms) to 12.8 percent in 2015 (the most recent data available).

The New Jersey experience parallels the national trend. The share of non-elderly adults in the Garden State without health coverage dropped from 17.5 percent in 2013 to 10.2 percent in 2015, a 7.3 percentage-point reduction. Over that period, the number of individuals (of any age) without health coverage fell by over 450,000.

A few findings about New Jersey are of particular interest.

We have achieved near-universal coverage among children. According to the new report, only 2 percent of children lacked coverage for at least a month in 2015 (I would be remiss if I didn’t mention that there is a large margin of error for this estimate, but it is still very encouraging).

Another finding in the most recent release is that unlike many other states and the U.S. as a whole, most of the gains here were concentrated in the first year of the coverage expansion, 2014, with much less progress in 2015.

Data from New Jersey state agencies sheds light on how people gained coverage.

The Medicaid expansion in New Jersey played a huge role. Enrollment increased by about 465,000 between 2013 and May 2016, with most new enrollees eligible for the first time under the ACA expansion (others were eligible before reform but hadn’t signed up). About 85 percent of that increase occurred in 2014.

Growth in private health insurance coverage was more modest. Between 2013 and 2015 (the most recent data available), the number of people with nongroup health insurance rose by about 91,000. More than half of those purchased through the federal marketplace (and most of those received federal subsidies), while the rest bought directly from an insurance company.

Okay, that’s a lot of numbers, but the bottom line looks good. To recap: by the end of 2015, the number of uninsured in New Jersey had dropped by over 40 percent. Medicaid covered a very large share of the newly insured while a smaller number signed up for nongroup insurance.

Compared to the first year of reform, 2014, New Jersey had a somewhat anemic reduction in the ranks of the uninsured in 2015. With 600,000 still uninsured at that point, there is more work to be done.

While good numbers are hard to come by, it is likely that at least half of those still uninsured are not eligible for Medicaid or federal marketplace coverage because they are unauthorized immigrants. Of the remaining uninsured, some may simply rather pay hefty tax penalties than be forced to buy coverage. But it also seems likely that the sheer complexity of our health insurance system deters others who could buy affordable coverage.

It will be difficult to reach the remaining uninsured, even those who are eligible for subsidies. While the federal government invested in public education and outreach in the 2014 enrollment round, those resources are mostly no longer available. In the current fiscal and political environment, new state investments to boost enrollment seem unlikely.

While New Jersey has done well in covering the uninsured, to do better than a B+ more public outreach and education will be needed. Without such investments, much of the cost of care for the uninsured will continue to fall on healthcare providers and, ultimately, on employers, taxpayers, and those who do the right thing and buy coverage. To break through the complexity, new investments to engage the remaining uninsured would go a long way.