Acting to improve health care access for New Jersey residents, Governor Murphy today announced that the State of New Jersey will move to a State-Based Health Exchange for the year 2021. The action will allow New Jersey greater control over its health insurance market and the ability to establish stronger protections against the Trump Administration’s sabotage of the ACA. The Governor has also proposed codifying in state law the protections provided by the Affordable Care Act.
“Maintaining a viable insurance market is critical to the success of the ACA, currently being undermined and sabotaged by the Trump Administration. New Jersey has benefited immensely from the ACA and I am glad to see that we are doing what we can to maintain the benefits for New Jerseyans across the state that rely on crucial health care services,” said Senator Vitale, the chairman of the Senate Health, Human Services and Senior Citizens Committee.
“In recent years, New Jersey had achieved real progress in lowering its uninsured rate and bringing down the cost of health insurance through thoughtful and creative policy decisions. So, when the federal government attempted to dismantle the Affordable Care Act, we acted swiftly to ensure that the progress made was not lost,” said Senator Troy Singleton. “However, more needs to be done to expand access to health insurance and to stabilize the marketplace. I look forward to working with Governor Murphy and my legislative colleagues to make that happen.”
“In the wake of repeated efforts of the Trump Administration to dismantle national health reforms, it’s vitally important that New Jersey takes action to preserve the protections of the Affordable Care Act for the many New Jerseyans that rely on it,” said Assemblyman Herb Conaway, who is chair of the Assembly Health and Senior Services Committee. “This healthcare security plan will serve to continue our state’s leadership role in ensuring broader access to adequate and affordable healthcare through the insurance marketplace.”
“We must take action to preserve affordable healthcare for New Jersey residents. The ongoing efforts in Washington to destabilize the health insurance market will only lead to higher costs for New Jersey residents unless we take common sense action,” said Assemblyman John McKeon. “New Jersey has fought long and hard to get more people insured. It’s not only fiscally but socially responsible. This is a step in the right direction toward ensuring access to affordable healthcare for all.”
Transitioning to a State-Based Exchange (SBE) will give the state more control over the open enrollment period; access to data that can be used to better regulate the market, conduct targeted outreach and inform policy decisions; and allow user fees to fund exchange operations, consumer assistance, outreach and advertising. By redirecting the assessment on premiums, currently paid to the federal government to utilize a Federally-Facilitated Exchange (FFE), New Jersey can operate an exchange that is tailored and efficient for New Jersey residents.
The SBE itself can be created through Executive Action, beginning with today’s submission of a Declaration Letter by the state to the federal Centers for Medicare and Medicaid Services (CMS). To fund the operation of the SBE, legislation will be required to transfer the current federal exchange user fee, which is presently set at 3.5% of premiums, to a 3.5% State-Based Exchange user fee for plan year 2021 – a rate that raises over $50 million a year. Maintaining the existing user fee in the individual market at 3.5% of premium in New Jersey will allow the state to dedicate funding towards outreach and enrollment efforts, which have been reduced at the federal level, as it transitions to an SBE for 2021.
The Administration proposes codifying many of the primary ACA consumer insurance protections including:
– Requiring dependent coverage to age 26
– Requiring coverage of Essential Health Benefits
– Prohibiting lifetime and annual limits
– Requiring coverage without cost sharing for preventative services.
The Governor today sent a Declaration Letter notifying CMS of New Jersey’s intent to create a State-Based Exchange for 2021.