NJ Congress Members Translate Pledges for ACA Protection into Plans

Among action items, bills that would safeguard consumers against ‘junk’ insurance plans, dedicate $10 billion for state reinsurance programs

Credit: NJTV News
U.S. Rep. Frank Pallone (D-NJ)
Members of New Jersey’s Democratic congressional delegation are translating their pledges to aggressively defend the Affordable Care Act into action. They’re ready with legislative proposals to expand federal support for its implementation and block Trump administration initiatives they believe will undermine the law’s benefits.

U.S. Rep. Frank Pallone Jr. (D-Monmouth) joined healthcare advocates and staff Monday at a community health clinic in Asbury Park to highlight several new pieces of federal legislation. One measure would protect consumers against what he termed “junk” insurance plans. Another would restore funding for annual enrollment programs, while a third would provide $10 billion to support state-run reinsurance plans and require a federal agency to establish those systems where they do not exist.

Another measure on Pallone’s list is the first bill introduced by U.S. Rep. Andy Kim (D-Burlington), along with a Republican from Pennsylvania. It would provide $200 million to help states like New Jersey and Pennsylvania that currently participate in the federal commercial insurance marketplaces move those systems into a state-based exchange. Under the ACA, states were allowed to start their own exchanges or join the federal system to expand low-cost options for consumers, and Kim insists state-run programs are more effective.

“Every time I talk with families in New Jersey, I hear how worried people are about the rising cost of healthcare,” Kim said when he introduced the bill in late February. “This is a proven, bipartisan approach that would expand access and lower costs.”

Making up for federal shortfall

Pallone said the reinsurance proposal could help ensure the solvency of New Jersey’s own program, which is designed to offset the burden of the most costly healthcare claims, but may not get all the federal support state officials initially anticipated. The initiative was signed into law by Gov. Phil Murphy in June and has been credited with helping to drive down by more than 9 percent the 2019 costs for insurance premiums on the state’s individual market.

The state Department of Banking and Insurance calculated that New Jersey would receive $218 million from the federal government to support the reinsurance program, but in January federal officials announced they would only provide $180 million to pay for claims experts predict will accrue over the coming year. DOBI officials asked the federal agency for clarification, but said that regardless of the accounting, it is far too soon to be concerned about any shortfall. The final accounting won’t come until late 2020.

Several of the federal proposals highlighted Monday at the Visiting Nurse Association of Central New Jersey’s Community Health Center were the subject of a hearing last month before the congressional Energy and Commerce Commission, which governs insurance matters. The other bills are scheduled for a March 6 hearing before the committee.

Promising a spirited defense

As chair of the committee, Pallone has promised to provide a spirited defense of the 2010 law, which he helped create and has battled to protect ever since. Others, including Kim’s bill, will be the subject of a hearing scheduled for Wednesday. Earlier this year he introduced a measure that would permit the U.S. House of Representatives to get involved in a lawsuit brought by a collection of Republican-led states that challenges the ACA, which the Trump administration has declined to defend.

“For the last two years, the Trump administration has attempted to sabotage the ACA at every turn, jeopardizing coverage for millions of Americans and causing premiums to skyrocket,” Pallone said. “The bills being discussed in the Energy and Commerce Committee will strengthen our healthcare system, reduce costs for New Jerseyans, and improve access to care.”

Healthcare issues, and the ACA in particular, were important factors — here and nationwide — in last year’s elections for the U.S. House of Representatives, which flipped the power to Democrats and put leaders like Pallone in control of their committees. The best example may be Kim, a political newcomer who defeated incumbent Republican Tom MacArthur in New Jersey’s 3rd Congressional District, in part because of MacArthur’s support for a key amendment to a bill that critics said would make health coverage far more expensive for patients with pre-existing conditions.

Since it took full effect in 2014, the ACA, or Obamacare, has expanded access to health insurance for some 23 million people nationwide, including more than 800,000 New Jersey residents, through changes to the Medicaid program and creation of insurance exchanges or marketplaces, which made more commercial policies available at lower costs. The law also required all insurance policies to cover certain essential services, including preventive care, at no additional cost to the patient, and eliminated various caps on coverage that had proven financially devastating for some people with long-term diseases.

A target for Trump Republicans

But the program costs the public more than $300 billion annually and has continued to be a target for some Republicans. While multiple congressional efforts to repeal and reform the ACA have failed, President Donald Trump has instituted a number of major changes, including eliminating the most controversial element — a penalty for not obtaining insurance, or the so-called individual mandate — as part of a late-2017 tax reform.

The Garden State, particularly under Murphy, has pushed back on these GOP-generated ideas. When he created the reinsurance program in June, Murphy also signed a bill that made New Jersey the second state to adopt its own tax penalty for not having insurance coverage. Existing state regulations for health insurance products also provide many of the same consumer protections that were enacted nationwide through the ACA.

The federal legislation Pallone’s committee will consider would extend these same types of programs and protections to other states. But officials note these bills would also benefit Garden State residents by providing a kind of backstop to state law, which could change under future governors.

Specifically, the measures Pallone intends to champion include:

  • H.R. 986, the “Protecting Americans with Preexisting Conditions Act of 2019” by Rep. Ann M. Kuster (D-NH), would require the Trump administration to rescind guidelines created in October that allow states to use taxpayer subsidies to help consumers purchase short-term, limited-benefit plans, which critics call “junk plans.” The measure was included in the February 13 hearing.
  • H.R. 987, the “Marketing and Outreach Restoration to Empower (MORE) Health Education Act of 2019” by Rep. Lisa Blunt Rochester (D-DE), would restore federal funding for outreach and enrollment programs that can help consumers enroll in the right plans. Those funds have been cut under Trump, by up to 90 percent in some states, a loss of at least $26 million to New Jersey in late 2017 alone. ACA advocates blame the loss of these funds in part for lower enrollment numbers in recent years. This bill also came up at the February hearing.
  • H.R. 1010 is a bill introduced by Rep. Kathy Castor (D-FL) that would reverse a rule issued by the Trump administration last year to expand access to so-called junk plans. The measure, which was heard in February, is designed to ensure all plans nationwide cover basic benefits like prescription drugs and maternity care.
  • H.R. 1425, the “State Health Care Premium Reduction Act” by Reps. Angie Craig (D-MN) and Scott Peters (D-CA), would provide $10 billion each year to states to help them establish and fund a state-based reinsurance programs; the funds could also be used to help reduce out-of-pocket costs for individuals enrolled in qualified health plans. In addition, the bill requires federal officials to establish and implement a reinsurance program in states that do not apply for federal funding under the bill. This measure is scheduled for review on March 6.
  • H.R. 1385, the “State Allowance for a Variety of Exchanges (SAVE) Act” by Kim, would provide states with $200 million in federal funds to establish state-based marketplaces. Under current law, federal funds are no longer available for states to set up state-based marketplaces. The bill will be heard Wednesday.
  • H.R. 1386, the “Expand Navigators’ Resources for Outreach, Learning, and Longevity (ENROLL) Act of 2019,” another Castor bill, would provide $100 million annually for the navigator program to help consumers negotiate the federal exchange system. The bill, also scheduled for a hearing this week, further requires that organizations hired are fully capable of doing the requisite work.