Plans Emerge for NJ Health Insurance Marketplace, New Protections

Lilo H. Stainton | May 29, 2019 | Health Care
New Jersey Democrats are pushing back hard against Trump and the GOP’s attempts to gut Obamacare

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Gov. Phil Murphy
Three months after Gov. Phil Murphy announced New Jersey would take the reins for the state’s health insurance marketplace from the federal government, the details of what this means are starting to appear.

Democratic lawmakers introduced a dozen bills late last week to create the infrastructure, funding, and regulatory structure for a state-based system that would enable New Jersey officials to create, market, and sell health insurance policies to low-income individuals and small businesses with fewer than 50 employees.

Other measures add popular features, like coverage for children up to age 26 on their parent’s plan, and protections for the millions of residents with pre-existing conditions.

Sizing up the market

Nearly 300,000 low-income residents — who earn too much to qualify for Medicaid but don’t get coverage through work — are now insured through the individual marketplace, which is regulated by the federal government and largely sold through the healthcare.gov website. Another 330,000 have policies through New Jersey’s separate, small-employer market, according to state data.

But legislative proposals announced Thursday, and reviewed in draft form by NJ Spotlight, would shift control of the individual marketplace to state officials and allow them to combine it with the small-employer system. Supporters have said this will give the state better control over coverage details, enrollment process, and consumer outreach and marketing, among other things. (The measures apply only to plans sold through these two markets, not those available to employees at large firms or to government workers.)

One bill would enable the state to add a monthly fee to the cost of each plan to pay for the system, essentially equal to the 3.5 percent the federal government currently charges for this service, according to officials, which they said would raise an estimated $55 million annually. Another would outlaw insurance providers from using gender as a factor in assessing the cost of plans sold on a state-based exchange; currently gender, age, and geography are all factors in pricing coverage.

Other measures introduced would ensure policyholders have the same protections they did in the federal system, including coverage for contraception and free preventive services, and would extend the period consumers can shop for policies.

Lawmakers are also seeking to amend bills to ensure plans cover certain essential health benefits, including mental health and maternal care, and that consumers with preexisting conditions have access to coverage.

An ACA for New Jersey

“With the Affordable Care Act under constant threat in Washington, New Jersey is choosing to proactively protect its residents to enact the same benefits, rights, and protections afforded under the ACA,” Assembly Speaker Craig Coughlin, (D-Middlesex) said last week. “While New Jersey law largely mirrors federal law, several changes are needed to match the landmark and successful ACA, and create a state-based exchange.”

The ACA, or Obamacare, enabled New Jersey to expand health insurance coverage to nearly 850,000 low-income state residents; at least 500,000 gained access to Medicare under the new income limits; some 200,000 purchased plans through the subsidized federal marketplace; and nearly 100,000 more benefited from marketplace-type policies they purchased directly from insurance carriers. As a result, the state’s uninsured rate has declined to a record-low 9 percent.

But President Donald Trump has rallied Republicans against the law — leading to several failed attempts to dismantle the program in Congress — and his administration has taken numerous actions to dismantle aspects of Obamacare. Among other things, Trump officials cut in half the amount of time people had to sign up for marketplace policies in recent years and reduced by 90 percent the federal funding available for outreach and assistance.

Dems push back against GOP

Murphy and Democrats in New Jersey’s Legislature have pushed back, instituting a number of policies designed to protect the federal program, regardless of what happens in Washington, D.C. Among other things, they committed some $800,000 to enhance public outreach and enrollment assistance during the sign-up period last fall.

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In late March, Murphy announced plans to take control of the ACA marketplace, making New Jersey the first state to make this switch since Trump took office. It is currently one of 28 states that use the federal platform for this process, according to researchers at the nonprofit Kaiser Family Foundation; 11 states — including New York, Connecticut, and Maryland — and Washington, D.C., now run their own systems, while the rest use a hybrid process.

“No question about it, this is a hedge against any changes in Washington in the foreseeable future,” said Assemblyman John McKeon (D-Morris), who is sponsoring several measures.

While details of the new exchange bills were not yet posted for public review on the Legislature’s website Tuesday, drafts shared with the author would address the following goals. Many of these also have Senate sponsors. (Murphy’s office declined to comment on the proposals, as drafted.)

  • A-5499 (Assemblyman Herb Conaway, D-Burlington) would allow the state Department of Banking and Insurance to create a state-based exchange and charge a fee on each plan equal to the 3.5 percent assessed now under the federal system.
  • A-5500 (Assemblyman Louis Greenwald, D-Camden) would change how insurance companies price plans, outlawing gender as a factor and requiring the most expensive plan to be no more than three times the cost of the cheapest.
  • A-5501 (McKeon) would ensure children could remain on their parent’s plan through age 26.
  • A-5502 (Assemblywoman Shavonda Sumter, D-Passaic) alters the definition of the small-employer plan, to allow for the changes.
  • A-5503 (Assemblywoman Verlina Reynolds-Jackson, D-Mercer), extends the enrollment period to 90 days, which it initially was.
  • A-5504 (Assemblyman Daniel Benson, D-Mercer) requires 85 percent of the profits made from these plans be reinvested in care.
  • A-5505 (Assemblywoman Annette Quijano, D-Union) allows companies to use age and geography when determining price, but not gender.
  • A-5506 (Assemblyman P. Christopher Tully, D-Passaic) repeals existing language related to “basic and essential” policies, which are no longer permitted.
  • A-5507 (McKeon) outlines protections for free preventive services.
  • A-5508 (Assemblyman Andrew Zwicker, D-Monmouth) requires these plans to cover contraception.
  • A-5509 (Assemblywoman Gabriela Mosquera, D-Camden) ensures breastfeeding support services are covered.
  • A-5510 (McKeon) prohibits various discriminatory practices.
  • A-1733 (Assemblywoman Valerie Vainieri Huttle, D-Bergen) would be amended to ensure providers selling these policies could not deny coverage based on pre-existing conditions; first introduced several years ago, this measure passed an Assembly committee last week.
  • A-5248 (Conaway) protects coverage for essential benefits as defined by the ACA, which include labor and delivery, mental health, and other services.