Given the instability around federal healthcare policy, New Jersey should take steps to shore up insurance coverage available through the Affordable Care Act — including instituting a state-level insurance mandate, if needed — and implement other policy changes to increase access to care, reduce costs, and improve clinical outcomes.
These recommendations are included in a 15-point plan released Monday by Better Choices, Better Care NJ, a nonprofit advocacy organization founded a year ago with funding provided by Horizon Blue Cross Blue Shield, the state’s largest health insurance company, and support from the state’s most significant business associations and several large labor groups.
The plan outlines strategies small and large which the group said can be used to protect ACA coverage for Garden State residents; strengthen volatile insurance markets; better control healthcare costs through billing, regulatory and other reforms; find savings and quality improvements in Medicaid; and promote patient-centric care in general.
While the group, guided by prominent business and labor leaders, has up to now worked behind the scenes, representatives said the recent “chaotic landscape” of healthcare policy convinced Better Choices it was time to play a more visible role.
Can ‘no longer remain on the sidelines’
“This organization launched with the goal of engaging and educating the public, employers and elected representatives on how to change health care for the better,” said Chris Donnelly, spokesman for the organization. “The past year, however, has shown us that we can no longer remain on the sidelines.”
The plan includes measures that “will actually lower costs, while providing better quality health care,” Donnelly said, noting that organization leaders would be advocating publicly for these solutions in the year to come.
The steering committee includes New Jersey Chamber of Commerce president and CEO Tom Bracken; Michele Siekerka, president and CEO of the New Jersey Business and Industry Association; Dr. Minalkumar A. Patel, former chief strategy officer for Horizon; and representatives of national labor organizations for carpenters, plumbers, and others in building trades.
The release of the 27-page report is also intended to serve as a resource for the transition team of Democratic Gov.-elect Phil Murphy, who will replace Gov. Chris Christie when the two-term Republican leaves office in January. Representatives for Murphy, who has emphasized his support for the ACA and other healthcare safety-net programs, did not respond Monday afternoon to a request for comment on the new proposal.
The ACA, or Obamacare, enabled nearly 900,000 additional Garden State residents to obtain insurance, either through Medicaid or through the individual insurance market, with government help to reduce the cost of commercial policies. It also created new protections for patients with pre-existing conditions and made other insurance changes that supporters said have helped stabilize a rocky sector of the healthcare system.
Critics say ACA has increased costs, reduced competition
Critics contend the law, which took full effect in 2014, has exacerbated cost increases and reduced competition among insurance companies in many parts of the nation. Repealing and replacing Obamacare has been a priority for national Republicans, although they have so far failed to win enough support to pass such a law.
One critical, yet highly controversial aspect of the law, the individual mandate — a tax penalty for those who do not obtain health insurance — is slated for elimination under the latest version of the GOP tax-reform bill, now up for debate in the U.S. Senate. Repealing this requirement would cause healthy people to opt out of the market, leaving only the sickest patients behind, and driving up healthcare costs all around, critics argue.
This was a primary concern for Better Choices. In its report, titled “Moving New Jersey to Affordable, Quality Health Care,” the group said ending the mandate would cause premiums to rise and businesses to shift to high-deductible plans or to cut coverage entirely. The existing instability has already prompted Horizon to raise rates by an average of 22 percent for 2018 plans, it notes.
“A weakened individual mandate, the potential loss of cost-sharing reductions, and the reinstatement of the health insurance tax” — all policies under consideration in the U.S. Congress — “are going to produce premium increases in New Jersey that are substantially higher than they would otherwise have been,” warned Ward Sanders, president of the New Jersey Association of Health Plans, in the Better Choices report.
Follow Massachusetts’ lead
The group urged Garden State leaders to follow the example of Massachusetts, which implemented its own mandate in 2006; California and Washington, D.C. are also considering the move, it noted. And, while the report did not offer any details, it also urged state leaders to “prepare a contingency plan” to help New Jersey withstand other federal changes in coverage or funding for the ACA’s Medicaid program.
The Better Choices plan also outlines a handful of options for reducing healthcare costs, a perennial focus for insurance companies, businesses, and others that foot large parts of the bill for care. It calls for greater transparency in spending on pharmaceuticals and medical devices. And it urges the state to expand the scope of practice for various nursing professions, reduce requirements for paper insurance-policy mailings, and reform medical regulatory boards so that they also included a “payers” perspective.
In addition, the group urged the state to set a rate structure based on federal Medicare guidelines for out-of-network charges, an effort to address a pattern of escalating “surprise” medical bills that advocates believe add nearly $1 billion a year to Garden State healthcare costs. (Better Choices has not taken a position on several controversial legislative measures designed to address this issue.)
Better Choices, Better Care also identified a number of policy and regulatory changes that it said could help make Medicaid more efficient and effective. New Jersey’s Medicaid program now covers 1.8 million residents, 1.1 million of them through managed care plans administered by Horizon; it cost more than $14.6 billion last year, most of it paid by the federal government.
The group said significant savings could come from shifting mental health and substance use disorder treatments under Medicaid’s managed care umbrella; while 95 percent of Medicaid members are in managed-care plans, the vast majority of behavioral healthcare services are still handled separately and billed through a fee-for-service process. New Jersey should follow the lead of Arizona, California, Kansas and New York State to better integrate these systems, to both reduce cost and improve care, it noted.
In addition, New Jersey should echo the efforts of a dozen states that have found ways to better coordinate care for patients covered under both Medicaid and Medicare, the group said. These so-called “dual eligibles” have high rates of multiple chronic and costly diseases that absorb billions of dollars in care, therefore presenting a good target for savings, they argued.