Latest New Jersey exchange updates
- COVID-related enrollment period continues through December 31, 2021 (overlapping with the start of open enrollment for 2022 coverage).
- Legislation passed to create an “easy enrollment” program (similar to Maryland and Colorado).
- New Jersey transitioned to a fully state-run exchange in the fall of 2020, using the GetCoveredNJ platform.
- Legislation was enacted to create additional state-based subsidies — available for 2021 coverage — and extend reinsurance funding.
- Individual market premiums in New Jersey rose an average of 3.3% for 2021, after increasing by about 8.7 percent in 2020.
- Premiums decreased for 2019, thanks to an individual mandate, reinsurance program.
- Individual mandate, reinsurance, and surprise billing protections signed into law in 2018.
- Enrollment increased for 2021, with more than 269,000 signing up during open enrollment.
What type of exchange does New Jersey have?
From 2014 through 2020, New Jersey used the federally run exchange, which means residents enrolled in exchange plans through HealthCare.gov. But New Jersey transitioned away from HealthCare.gov in the fall of 2020, and is now operating its own exchange platform, using the GetCoveredNJ website.
Five carriers offered plans in the New Jersey exchange in 2016, but three of them exited the exchange at the end of 2016, leaving two carriers offering plans for 2017. For 2018, Oscar Health – one of the insurers that had exited at the end of 2016 – returned to the exchange, bringing the total number of carriers to three. Oscar’s coverage area in 2018 was larger than it was when they offered exchange plans in the state previously.
All three insurers are continuing to offer coverage in New Jersey’s exchange for 2021, and although average rates increased by about 3.3% for 2021 and by 8.7% for 2020, they decreased by 9.3% in 2019 due to the state’s new individual mandate and reinsurance program. So average pre-subsidy premiums are still only slightly higher than they were in 2018. For 2022 coverage, insurers must file their proposed rates with the New Jersey Department of Banking and Insurance by July 21, 2021.
When can I enroll in 2021 health insurance in New Jersey?
In response to the ongoing COVID pandemic, GetCoveredNJ is offering an extended enrollment window for 2021, which has been extended through December 31, 2021 (it had previously been extended through November 30, 2021). Enrollment during this window is also available off-exchange (directly through insurers), but subsidies are not available off-exchange, including the subsidy enhancements made by the American Rescue Plan.
Initially, open enrollment for 2021 health plans in New Jersey began on November 1, 2020 and continued through January 31, 2021. This was double the length of the normal open enrollment period that was used in states that run their own health insurance exchanges; the flexibility to extend open enrollment is due to the fact that New Jersey now runs its own exchange platform(GetCoveredNJ), and the exchange is likely to continue to offer extended enrollment windows in future years.
Outside of the open enrollment window, New Jersey residents would normally need a qualifying event in order to enroll or make changes to their coverage. But for New Jersey has opted to extend the enrollment window for 2021 through the end of 2021, in order to address the ongoing COVID pandemic and give people ample opportunity to take advantage of the additional premium subsidies created by the American Rescue Plan. Plans will take effect the first of the month after the enrollment is completed, and this enrollment window applies to people who are currently uninsured but also to people who already have coverage and would like to switch to a different plan for the rest of 2021.
This is important, as some people will need to switch plans in order to best take advantage of the additional premium subsidies available as a result of the American Rescue Plan. Although open enrollment for 2022 plans will start on November 1, 2021, the state’s COVID-related enrollment window continues through the end of December, in order to give people an ample opportunity to take advantage of the new subsidies for 2021 (otherwise, if a person enrolled in November during open enrollment, their coverage wouldn’t take effect until January 1, 2022; under the COVID-related enrollment period, if they apply in November their plan will take effect in December).
“Easy enrollment” legislation passes unanimously in New Jersey’s legislature
In December 2020, S.3238 was introduced in New Jersey’s Senate, calling for the state to create an “easy enrollment” program, similar to the program that Maryland began using in 2020, and that Colorado will being to use in 2022.
The legislation passed unanimously in both chambers, and was sent to Governor Phil Murphy in June 2021. It will allow New Jersey to use state tax returns to identify uninsured residents and then determine, based on data from the tax returns, whether those individuals are eligible for Medicaid or premiums assistance through the New Jersey exchange. The legislation calls for the state to implement the program starting with the 2021 tax year (ie, utilizing tax returns that people file in early 2022) or, if that’s not feasible, the 2022 tax year.
According to the text of S.3238, a tax filer will be able to check a box on their tax return indicating that they’d like the state to pass their pertinent information to the exchange (Get Covered NJ) so that their eligibility for health insurance financial assistance can be determined. Medicaid enrollment is available year-round, but the legislation notes that people who are not eligible for Medicaid will be granted a special enrollment period of at least 14 days, during which they can enroll in a private plan through the exchange. Most people will be eligible for premium subsidies, and that information will be communicated to the tax filer by the exchange.
Lawmakers in Pennsylvania are also considering legislation in 2021 that would create an “easy enrollment” program. A similar bill was considered in the 2021 legislative session in New Mexico, and although it passed the House, it did not advance in the Senate before the end of the 2021 session.
New Jersey now has a fully state-run health insurance exchange
From the fall of 2013 through the 2020 plan year, New Jersey used HealthCare.gov, like the majority of the rest of the states. But in March 2019, Governor Phil Murphy notified CMS that New Jersey planned to begin running its own health insurance exchange by the 2021 plan year (ie, operational by November 2020).
But New Jersey also requested CMS approval to have the NJ Department of Banking and Insurance oversee the exchange starting in the fall of 2019, when people were purchasing coverage for 2020. That request was approved just a few weeks before the start of open enrollment for 2020 health plans, so New Jersey had a state-based exchange using the federal platform (HealthCare.gov) for the 2020 plan year. The state transitioned to a fully state-run exchange in the fall of 2020, utilizing their own enrollment platform instead of HealthCare.gov.
The state is using its existing GetCoveredNJ website as the exchange enrollment site. Navigator training and beta testing for the website began in August 2020, and people were able to window shop on the new state-run exchange as of mid-October. Open enrollment began on November 1, 2020, and will continue through January 31, 2021 (enrollments completed by December 31, 2020 will have coverage effective January 1, 2021).
States that rely fully on the federally run exchange currently have to pay 3 percent of premiums to the federal government for the use of HealthCare.gov, the federally-run call center, and things like tech support, marketing, and enrollment assistance. This is a reduction from the 3.5 percent fee that was charged prior to 2020 (and CMS has proposed a further reduction, to 2.25 percent, for 2022), although federal funding for outreach and enrollment assistance have been drastically cut under the Trump administration, and premiums have increased drastically since 2014.
State-run exchanges that use the HealthCare.gov enrollment platform are charged a fee equal to 2.5 percent of premiums in 2020, down from 3 percent in 2019 (and CMS has proposed a reduction to 1.75 percent in 2022). So New Jersey paid that 2.5 percent fee in 2020. But even now that the state has its own exchange, they plan to continue to collect the same 3.5 percent fee that was collected by the federal government in 2019. But instead of sending it to the federal government, New Jersey will use the money — estimated at $50 million per year — to operate a state-run exchange.
By running its own exchange, New Jersey has gained significantly more control. The state has the flexibility to extend open enrollment (which they’re using right out of the gates, doubling the length of open enrollment for 2021 coverage so that it will last for three full months), target the state’s enrollment and outreach efforts in the most useful fashion, design the enrollment website and customer service center, and have more regulatory control over the plans for sale in the market.
What is the New Jersey Health Insurer Assessment and how does it make coverage more affordable?
In July 2020, New Jersey enacted A4389 (Senate version was S2676) in an effort to decrease the state’s uninsured rate, close the racial health care disparity gap, and make individual health insurance more affordable. The legislation, which was signed into law by Governor Murphy on July 31, is expected to generate $224 million in annual funding by replacing the ACA’s health insurance tax (which was eliminated after the end of 2020), with a new state-based assessment on individual and fully-insured large group health plans in New Jersey, starting in 2021.
About a third of the money generated by the assessment is being used to provide ongoing funding for the state’s existing reinsurance program. The other two-thirds is being used to make health insurance more affordable for people with low and modest incomes. Maura Collinsgru, Health Care Program Director for New Jersey Citizen Action, explained that the money would be used to provide state-funded premium subsidies to go along with the federal subsidies provided by the ACA.
Initially, the state-funded subsidies were available to households earning up to 400% of the poverty level, which was the same as the eligibility limit for federal subsidies. But the American Rescue Plan eliminated the income cap for federal subsidy eligibility for 2021 and 2022 (ie, there is no longer a “subsidy cliff” for those two years), and New Jersey subsequently announced that as of May 2021, the state-funded subsidies would be available to households with income up to 600% of the poverty level.
New Jersey’s state-funded subsidies are designed to address the fac that even with federal subsidies, health insurance — particularly robust coverage with lower out-of-pocket costs — can often still be unaffordable, even with the subsidies. The American Rescue Plan has made coverage more affordable at almost all income levels, and New Jersey is also expanding the reach of the state-funded subsidies in an effort to continue to make coverage as affordable as possible.
Because New Jersey is newly operating its own state-run exchange for 2021, the state did not have a mechanism in place for targeting the additional state-funded subsidies based on need during the first year. So the money was initially simply being divided equally across all of the state’s exchange enrollees with income up to 400% of the poverty level. According to a statement from Governor Murphy’s office, the subsidy amount was expected to be at least $564 per enrollee in 2021. During the first five weeks of open enrollment, it had averaged $556 in total annual savings, on top of the federal premium subsidies for which people were eligible; the specifics changed later in 2021 when the state opted to provide subsidies at higher income levels.
The legislation initially called for the new assessment to be set at 2.75% of premiums, but that was later amended to 2.5% (this is less than insurers were paying under the ACA’s health insurance tax, according to an analysis conducted by New Mexico when a similar bill was being considered there earlier this year).
The assessment only applies to individual market plans and fully insured large group plans (ie, not self-insured large group plans). Collinsgru clarified that the bill originally included small group plans, dental plans, and multiple employer welfare plans among the entities that would be subject to the assessment. But the amended version of the bill eliminated those entities and focused the assessment only on individual plans and fully insured large group plans. Medicaid managed care plans were not included in either version of the bill, due in part to uncertainty surrounding the Medicaid program under the Trump administration. But Collinsgru noted that advocates hope to introduce additional legislation in a future session that could add the assessment to Medicaid managed care plans in order to generate more funding for the state’s health insurance affordability program, part of which would come from the federal government (Medicaid is jointly funded by the state and federal government).
How did individual health insurance premiums change in New Jersey for 2021?
Three insurers offer plans in the New Jersey exchange. For 2021, they implemented the following average rate changes:
- AmeriHealth: roughly 6.5 percent increase (slightly different for AmeriHealth HMO and AmeriHealth Insurance Company of NJ)
- Horizon Healthcare Services (BCBS): 1.1 percent increase
- Oscar Health: 6.1 percent increase
Oxford (UnitedHealthcare) offers off-exchange-only plans in New Jersey. Their average rates increased by 10.4 percent for 2021.
Overall, across the whole individual market in New Jersey, the average premium increase was 3.3 percent for 2021.
2020: Average premiums increased by 8.7 percent
Average premiums increased by 8.7 percent in New Jersey’s individual market in 2020, with an increase of roughly 11 percent for AmeriHealth, 6.5 percent for Horizon, and 16.8 percent for Oscar. Oxford, which only sells off-exchange plans, increased their average premiums by 10.4 percent for 2021. The average rate changes for 2021 were considerably larger than the average nationwide; average premiums across all states actually dropped slightly for 2020. However, New Jersey’s average pre-subsidy premium in 2019 was $511/month, versus an average of $612/month across all states that use HealthCare.gov. And premiums decreased by an average of 9.3 percent in New Jersey in 2019, versus a national average increase of just under 3 percent.[/hio_question]
Rates decreased for 2019, thanks to state individual mandate and reinsurance program
New Jersey regulators announced in July 2018 that the average proposed 2019 rate increase for individual market plans was 5.8 percent. At that point, the proposed rate increase would have been more than twice that much (12.6 percent) if the state hadn’t enacted legislation to create its own individual mandate starting in 2019.
The loss of the federal individual mandate penalty drove premiums up all across the country for 2019, but New Jersey insulated itself from that by implementing its own mandate (when there’s no mandate, healthy people are less likely to maintain coverage, which results in a less healthy risk pool and higher premiums for everyone who remains insured).
In addition, New Jersey had submitted a 1332 waiver proposal, seeking federal pass-through funding for a reinsurance program. CMS was still reviewing that proposal when rates were being filed, so the 5.8 percent average proposed rate increase for New Jersey plans did not account for the reinsurance program. Federal approval for the state’s 1332 waiver came in August 2018. State regulators had already noted that the rates would be revised if and when the reinsurance program was approved, and they expected the 2019 rates to be 15 percent lower with reinsurance than they would otherwise have been.
Sure enough, Governor Murphy’s office announced in early September that average rates in the individual market would decline by 9.3 percent in 2019, after accounting for the impact of the reinsurance program. So if New Jersey hadn’t done anything at all, rates would have increased by an average of nearly 13 percent. But instead, because the state implemented an individual mandate and a reinsurance program, the average rates decreased by more than 9 percent.
The approved base rates for each plan, as well as the applicable age-based multipliers, are available here.
For perspective, here’s a summary of how average rates have changed in New Jersey in prior years:
- ACA-compliant plans debuted for 2014, and the rates were essentially educated guesses.
- For 2015, across all plans and metal levels in the New Jersey exchange, an analysis from the Commonwealth Fund found an average 2015 premium increase of just 2 percent for a 40-year-old non-smoker.
- For 2016, average pre-subsidy premiums increased by 10.2 percent in New Jersey.
- For 2017, exchange participation had dropped to just AmeriHealth and Horizon, and the average rate increase was 8.8 percent.
- For 2018, exchange participation grew to three insurers, with Oscar’s re-entry to the exchange. The average rate increase was 22 percent, due in large part to the uncertainty caused by federal GOP efforts to repeal the ACA in 2017, and the market instability that caused, as well as the fact that silver plan rates began to include the cost of cost-sharing reductions (CSR) as of 2018 (details below).
Cost of CSR is added to silver exchange plans in New Jersey
Throughout 2017, the uncertainty surrounding CSR funding loomed large in the rate-setting process for 2018 plans. States and insurers took varying approaches to dealing with the uncertainty, and some changed their approach in last-minute rate revisions after the Trump Administration announced on October 12 that CSR funding would end immediately.
In mid-October, the New Jersey Department of Banking and Insurance confirmed by phone that the cost of CSR had been incorporated in the on-exchange silver plan rates for 2018, leading to an overall average rate increase of 22 percent.
For 2019, insurers in New Jersey again added the cost of CSR to on-exchange silver plans, and state regulators in New Jersey encouraged insurers to offer separate off-exchange-only plans that didn’t have the cost of CSR added to their premiums.
Adding the cost of CSR to silver plan premiums ends up protecting the majority of enrollees, particularly if the cost of CSR is only added to on-exchange plans an insurers offer separate (cheaper) off-exchange silver plans. Premium subsidies end up being larger than they would otherwise have been, since the subsidies are based on the cost of the second-lowest-cost silver plan. 78 percent of New Jersey exchange enrollees receive premium subsidies. Those enrollees were protected from the brunt of the rate increases in 2018 (as noted above, average rates decreased for 2019). Premium subsidy recipients who picked bronze or gold plans likely found that their net premiums decreased for 2018, as the larger subsidies based on higher silver plan premiums can be applied to plans at other metal levels, despite the fact that the other metal levels don’t have the cost of CSR added to their premiums.
Off-exchange enrollees and unsubsidized exchange enrollees have to pay close attention to their plan choices, however. If they want a silver plan, the best bet may be an off-exchange-only silver plan, in order to avoid the CSR cost that has been added to on-exchange silver plans. Otherwise, bronze and gold plans could also be a good choice.
More than 269,000 enrolled during open enrollment for 2021 plans, including more than 75,000 new enrollees
Enrollment in New Jersey’s exchange peaked in 2017, when 295,000 people enrolled. It then declined each year through 2020 — when 247,543 people enrolled — but increased to 269,560 during the open enrollment period for 2021 coverage, including 75,749 new enrollees. Enrollment is likely to continue to increase throughout 2021, as New Jersey has extended its COVID-related enrollment period through November 30, 2021, essentially keeping open enrollment open throughout the entire year (open enrollment for 2022 coverage begins November 1, 2021).
Across all states that use HealthCare.gov, enrollment peaked in 2016, and has been declining each year since then. The declines have been caused by a variety of factors, including uncertainty about the GOP efforts to repeal the ACA, and the Trump administration’s decision to sharply reduce funding for Navigators and exchange marketing, and increasing premiums (particularly for people who don’t get premium subsidies).
But some factors that caused enrollment to drop in other states were not a factor (or not as much of a factor) in New Jersey. That includes the elimination of the ACA’s individual mandate penalty (New Jersey implemented its own mandate and penalty as of 2019, but didn’t start heavily marketing it until late in 2019) and the expansion of short-term plans (long-standing New Jersey laws prohibit the sale of short-term plans).
For perspective, here’s a look at enrollment in prior years in New Jersey’s exchange:
- 2014: 161,775 people enrolled in plans through the New Jersey exchange during the first open enrollment period, for 2014 coverage. This enrollment period lasted for six months, as it was the first time that individual market coverage had been limited to an enrollment window (prior to 2014, people could apply for individual market plans anytime they wanted, but coverage was medically underwritten).
- 2015: 254,316 people enrolled
- 2016: 288,573 people enrolled
- 2017: 295,067 people enrolled
- 2018: 274,782 people enrolled
- 2019: 255,246 people enrolled
- 2020: 247,543 people enrolled
- 2021: 269,560 people enrolled
2018 health care legislation in New Jersey: Reinsurance, individual mandate, and surprise billing protections
Lawmakers in New Jersey considered a variety of health care reform bills in the 2018 session. Two vitally important bills – to create an individual mandate and a reinsurance program — passed and were signed into law by Governor Murphy in 2018.
New Jersey joined Massachusetts in having an individual mandate in 2019 (as did DC), and was one of several states that implemented a reinsurance program in 2019. Vermont has also enacted an individual mandate, but it won’t take effect until 2020.
In addition, Governor Murphy signed legislation to protect consumers from surprise balance billing. Here’s a summary of the health care reform legislation New Jersey enacted in 2018:
- A.3380: The legislation implemented a state-based individual mandate in New Jersey, effective in 2019. It passed 23-13 in the Senate, and 50-23 in the Assembly, and Gov. Murphy signed it into law in late May, 2018. The ACA’s individual mandate penalty was eliminated after the end of 2018, under the terms of the GOP tax bill that was enacted in late 2017. New Jersey’s mandate took effect seamlessly, as of 2019. It is structured in much the same way as the ACA’s individual mandate penalty, although the maximum penalty is tied to the average cost of a bronze plan in NJ, rather than the national average cost. The penalty will be assessed on state tax returns (starting in early 2020, for 2019 returns), rather than federal tax returns. For reference, the ACA’s individual mandate penalty was assessed on 188,750 federal tax returns filed by New Jersey residents for the 2015 tax year, with total penalties of $93.3 million. The revenue collected by the state under the mandate penalty will be used to provide state funding for the reinsurance program called for in S.1878 (discussed below).
- S.1878: The legislation directed the state to apply for a 1332 waiver in order to obtain federal funding for a state-based reinsurance program. It passed 22-14 in the Senate, and 46-22 in the Assembly, and Governor Murphy signed it into law in late May, 2018. New Jersey submitted a 1332 waiver proposal for the reinsurance program to CMS on July 2, 2018, and it was approved by CMS the following month, granting federal pass-through funding that the state will use to operate the reinsurance program. Before the reinsurance program had received federal approval, insurers in the state had proposed an average rate increase of 5.8 percent for 2019. But rates were revised once the reinsurance program waiver was approved, resulting in an average decrease of more than 9 percent. New Jersey’s reinsurance program will reimburse insurers for 60 percent of the cost of claims that exceed $40,000, until the claims reach $215,000. States that have implemented reinsurance programs are showing improved market stability and premiums that have either declined or been limited to very modest increases. Alaska established a reinsurance program in 2016, and it has been credited with keeping premiums increases much lower than most states in 2017, and sharp premium decreases for 2018. Minnesota and Oregon implemented reinsurance programs for 2018, with average premiums declining in Minnesota and increasing by only single-digit percentages in Oregon.
- A.2039: This legislation protects consumers from surprise balance bills from out-of-network providers who perform services at in-network facilities. It also requires medical facilities to clearly explain to patients whether the facility is in or out of network with the patient’s insurer, and requires insurers and out-of-network providers to enter binding arbitration when billing disputes arise. Self-insured health plans are not subject to state law (they’re governed instead by federal law, under ERISA), but self-insured plans can opt in to the provisions of the state’s surprise billing protections. Several states have addressed the surprise billing issue, but New Jersey’s new legislation is considered the strongest in the country. A.2039 passed 21-13 in the Senate, and 48-21 in the Assembly, and was signed into law on June 1, 2018. Similar measures have been debated in New Jersey for the last decade.
Insurer participation in New Jersey’s exchange
As is the case in most states, insurer participation in the exchange has varied over the years in New Jersey. In 2014, there were only three insurers offering plans: Horizon Blue Cross Blue Shield, AmeriHealth, and Health Republic of New Jersey (Freelancer’s CO-OP). But for 2015, Oscar and Oxford joined the exchange. There have been several additional changes since then:
In 2015 and 2016, Oscar offered coverage in nine of New Jersey’s 21 counties. For 2018, they offered coverage in 14 counties: Bergen, Essex, Hudson, Hunterdon, Mercer, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset, Sussex, Warren, and Union.
UnitedHealthcare discontinued their individual market HMO plans in New Jersey (sold under the name Oxford) at the end of 2016. According to a Kaiser Family Foundation analysis, Oxford offered exchange plans in all 21 counties in New Jersey in 2016, but did not have either of the two lowest-cost silver plans in any area of New Jersey.
Health Republic (CO-OP)
Health Republic Insurance of New Jersey was one of the ACA-created CO-OPs, most of which have not survived. In September 2016, Health Republic was placed into rehabilitation by the NJ Department of Banking and Securities. As a result, the CO-OP stopped selling new policies, and existing policies terminated at the end of 2016.
The CO-OP noted that their financial collapse stemmed in large part from the risk adjustment program, under which they had to pay $46.3 million ($38.6 million for individual market plans, and $7.7 million for small group plans). The CO-OP had been told by CMS at the end of 2015 that their projected liability was about $17 million. But when the final numbers came out in June, the carrier owed more than two and a half times that much.
Unlike the other CO-OPs that had already closed around the country, state regulators were initially working under the assumption that it might have been possible to stabilize the company enough for it to return to the marketplace in 2018. But that hope was short-lived. In December 2016, the NJ Commissioner of Banking and Insurance submitted a recommendation that Health Republic Insurance of New Jersey be liquidated.
And on February 3, 2017, the order of liquidation was filed. Health Republic assets were liquidated to repay creditors as much as possible.
Horizon BCBS offering tiered network plans: Controversial, but with lower premiums
Horizon Blue Cross Blue Shield — New Jersey’s largest health insurer — began offering new health plans in 2016 that had premiums about 15 percent lower than the carrier’s 2015 rates, in addition to lower copays and deductibles in exchange for using specified hospitals and providers (as was the case with most plans, premiums for Horizon’s OMNIA plans increased in 2017 and 2018, but continued to be about 10 percent lower than other similar Horizon plans). Not surprisingly, residents who were polled about the plans expressed support for the concept.
By early 2017, after two years of open enrollment windows in which OMNIA plans were available, Horizon reported that 238,000 people had enrolled in the plans, representing a large majority of the nearly 276,000 individual market Horizon enrollees at that point.
Horizon’s new plans were created under the OMNIA Alliance partnership with 22 hospitals, plus an additional 14 hospitals that are designated “Tier 1.” These 36 hospitals (39 hospitals as of 2018) agreed to accept lower reimbursements in trade for higher volume (since insureds have to use one of those hospitals in order to get the lower copays and deductibles), and also agreed to reimbursement based on quality of care and patient outcomes, rather than fee-for-service reimbursement (it was later confirmed that Horizon favored larger hospitals over smaller hospitals, and that price didn’t play a role in the selection of Tier 1 hospitals).
The other 36 hospitals in New Jersey were designated “Tier 2” under the new plans, and insureds who use those hospitals pay higher copays and deductibles (although insureds still have access to those hospitals, and the hospitals continue to be reimbursed by Horizon if insureds choose to use them). Those hospitals were upset that they were left out, and say they were caught off guard by the new Horizon plans.
A group of 17 Tier 2 hospitals filed a lawsuit in November to stop the OMNIA Alliance, and asked the New Jersey Department of Banking and Insurance (DOBI) to intervene. But the DOBI refused, noting that shuttering the new Horizon plans in the middle of open enrollment – once plans had already been purchased by consumers – would potentially “create significant upheaval and disruption to the New Jersey marketplace and its consumers.” In June 2016, an appeals court ruled against the hospitals, upholding the state’s decision to allow the tiered network plans to be sold. Another lawsuit, brought by seven Tier 2 hospitals, continued until 2018. The case was scheduled to go to trial in October 2018, but Horizon settled with the last plaintiff before the trial began.
Horizon’s approach in New Jersey is a compromise between truly narrow network HMO plans (where enrollees only have coverage at designated facilities) and the broad network PPO plans that dominated the pre-ACA market. Horizon’s CEO has defended the new plans, and noted that in a state where healthcare costs were the second-highest in the country, innovation to lower them is necessary.
History of the New Jersey exchange
The New Jersey Assembly passed two bills authorizing a state-run exchange in 2012, but both were vetoed by then-Gov. Chris Christie. Those vetoes left the federal government to operate the health insurance marketplace in New Jersey, although that is poised to change under the Murphy Administration. Governor Christie took a very hands-off approach to the ACA, and the state did little to promote the HHS-run exchange under his Administration, leaving most of the heavy lifting to brokers, navigators and HHS.
The state did opt to expand Medicaid however, making health insurance available to hundreds of thousands of low-income residents.
New Jersey Senator Nia Gill introduced the legislation again in 2015 to create a state-run exchange. But her bill, S540, didn’t advance out of committee during the 2015 session. Gill was critical of Gov. Christie’s vetoes of the prior exchange-creation legislation, noting that New Jersey subsidies wouldn’t have been dependent on the outcome of the King v. Burwell case if the state had created its own exchange (subsidies ended up being safe when the Supreme Court ruled that subsidies were legal in every state, not just those that ran their own exchanges).
In January 2014, U.S. Rep Bill Pascrell (D, NJ) introduced a bill that would allow HHS to recoup ACA outreach funding that remains unused by Republican governors like Chris Christie who refused to use the money in their states to promote the ACA and educate residents about its benefits. New Jersey officials were involved in lengthy discussions with HHS over the use of $7.67 million in federal funds that had been granted to NJ in 2012 to use for promoting the state’s health insurance exchange.
The money was intended for outreach, advertising and general promotion of the ACA and the exchange, although NJ officials wanted to use it to staff a call center for the state’s expanded Medicaid program. But HHS had made it clear last year that such a use was not permitted.
Ultimately, the state and HHS were not able to come to a compromise on the issue. New Jersey forfeited the money in February 2015 when the deadline passed, and HHS officially rescinded the funds in May 2015.
New Jersey health insurance exchange links
New Jersey’s Official Health Insurance Marketplace
State Exchange Profile: New Jersey
The Henry J. Kaiser Family Foundation overview of New Jersey’s progress toward creating a state health insurance exchange.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.