Nearly 700,000 New Jersey residents who were unable to afford coverage in the past have picked up publicly funded or low-cost health insurance since the Affordable Care Act took effect some six years ago.
But even more people could be covered – and healthcare costs better controlled – if the state took direct responsibility for insuring at least some of these customers, according to Assemblyman Reed Gusciora. Experts believe at least 500,000 state residents still don’t have health insurance; if undocumented immigrants are included, it is closer to 700,000 people.
Gusciora (D-Mercer) announced Monday that he will introduce legislation to create a “single-payer” plan that would require the state to insure residents who are now eligible for subsidized coverage through the so-called Obamacare exchange. The deputy majority leader said he was inspired by the success of Vermont Sen. Bernie Sander’s Democratic presidential campaign-trail message of “Medicare for all” and felt it was time to jump-start a similar discussion around further healthcare reform here in New Jersey.
The ACA included an expansion of Medicaid, which enabled some 440,000 additional patients in New Jersey to qualify for the publicly funded program. Almost 250,000 additional residents were eligible for federal tax-credits to help offset the cost of private plans sold on the exchange. Gusciora said the people who are covered by plans purchased through the exchange could be far better served by a single-payer, state-run system. His proposal would not impact those covered by Medicaid, Medicare or private plans.
New Jersey is one of 27 states that chose to depend on an exchange created and operated by the federal government; the remaining states took advantage of national grants to help set up their own systems, or built hybrid models in partnership with officials in Washington, D.C. While the success of Obamacare in general continues to be debated, there are indications that the exchanges – particularly those run by the federal government – have faced struggles.
A report issued in March by Nebraska Sen. Ben Sasse, a Republican, found that the exchanges have failed to meet the ACA’s goals of increasing competition and reducing costs.
As of 2016, all states have fewer providers selling plans through this market than they did in 2013, according to the report from Sasse’s office. A handful of states, including Wyoming, West Virginia, and South Dakota, have only one or two companies still selling healthcare policies. New Jersey’s exchange has lost several providers over the years, but new plans have come online and customers have generally had close to a half-dozen options.
An analysis released earlier this year by the federal Department of Health and Human Services found that customers nationwide pay an average $106 a month for plans purchased through the exchanges, after tax credits are considered. In New Jersey, the post-subsidy average is $161 a month.
Gusciora and others said states that opted to create their own exchanges have generally had more success enrolling consumers and ensuring low-cost plans are available. Former state health commissioner Heather Howard, a lecturer at Princeton University who also works with the Robert Wood Johnson Foundation to advise other states on healthcare reform, said New York State has been able to use its own exchange to develop state-supported insurance plans that were lower-cost than those offered by private companies; it also created carefully targeted outreach to underserved communities.
Depending on the federal exchange “was a missed opportunity to tailor the market to New Jersey’s needs,” Howard told WNYC’s Brian Lehrer earlier this month. Howard said the ACA has led to significant gains, including for the Garden State, but it still needs additional reforms. “We’ve seen uneven implementation across the nation,” she added.
Gusciora would like to go beyond a state-run exchange to create a system in which the state itself insures those who now buy plans through the exchange. He said details would be fleshed out during legislative hearings, but the plan is likely to borrow from several models under discussion recently, including an effort by officials in Vermont to launch a self-payer system. This approach ensures patients keep control over medical decisions and allows the state to negotiate lower rates with hospitals and other providers, he added.
“I think New Jersey should indeed enter the marketplace,” Gusciora said. “This would be setting up a mechanism where we do not need an insurance company.”
Ray Castro, a healthcare expert with the liberal think tank New Jersey Policy Perspective, welcomed Gusciora’s proposal as the starting point for additional discussion on healthcare reform, but cautioned that a single-payer system – even a limited model – would be a heavy lift. While the ACA encourages states to explore new options, he said it doesn’t provide unlimited funding, and any expansion is likely to cost more, at least initially.
Castro recalled how, before the ACA’s implementation, New Jersey’s healthcare advocates examined options to expand coverage to more low-income residents – a proposal that would have cost close to $1 billion, he said. “And that was of course why we couldn’t do it,” he said. “The lack of resources is always the issue with healthcare.”
Gusciora said he had not discussed his plan with Assembly Speaker Vincent Prieto (D-Hudson) or other leaders and he conceded such a proposal was not likely to be approved under Gov. Chris Christie, a Republican who made his distaste for Obamacare clear while running for the GOP nomination for president. The goal is to kick off a conversation, he said, adding: “We have to start thinking about the post-Christie era.”