At a glance: Medicare health insurance in New Jersey
- More than 1.6 million New Jersey residents are enrolled in Medicare.
- 21 percent of New Jersey Medicare beneficiaries select Medicare Advantage plans (lower than the national average).
- New Jersey Medicare beneficiaries can select from between nine and 36 Medicare Advantage plans in 2019, depending on their county
- New Jersey guarantees access to Medigap Plan C for people under 65, and premiums can’t be higher than they are for those 65+ (this will change to Plan D as of 2020, to align with new federal rules banning the sale of Plan C to newly-eligible enrollees)
- More than half of New Jersey’s Medicare beneficiaries have stand-alone Part D plans; 26 plans are available in 2019, ranging from $12 to $102 per month
- Per-enrollee Medicare spending in New Jersey is just slightly lower than the national average
Medicare enrollment in New Jersey
1,611,414 New Jersey residents were enrolled in Medicare as of July 2019. 87 percent of New Jersey Medicare beneficiaries are eligible due to their age (ie, being at least 65), while the other 13 percent are eligible for Medicare due to a disability. Nationwide, 84 percent of Medicare beneficiaries are eligible due to age, while 16 percent are eligible due to disability.
Medicare Advantage in New Jersey
21 percent of Medicare beneficiaries in New Jersey had coverage under private Medicare Advantage plans in 2017. Nationwide, the average was 33 percent, so Medicare Advantage is less popular in New Jersey than it is nationwide. The other 79 percent of New Jersey’s Medicare beneficiaries opted instead for coverage under Original Medicare.
There are 21 counties in New Jersey, and availability of Medicare Advantage plans for 2019 ranges from nine plans in Cape May County to 36 plans in Morris County. Starting in 2019, there’s a Medicare Advantage open enrollment period (January 1 to March 31) during which people who are already enrolled in Medicare Advantage plans can switch to a different Medicare Advantage plan or drop their Medicare Advantage plan and enroll in Original Medicare instead.
Medigap in New Jersey
Medigap plans are used to supplement Original Medicare, covering some or all of the out-of-pocket costs (for coinsurance and deductibles) that people would otherwise incur if they only had Original Medicare on its own.
Medigap plans are standardized under federal rules, and people are granted a six-month window, when they turn 65 and enroll in Original Medicare, during which coverage is guaranteed issue for Medigap plans (as described below, New Jersey lawmakers are considering legislation to make this a continuous eligibility window). But federal rules do not guarantee access to a Medigap plan if you’re under 65 and eligible for Medicare as a result of a disability.
But New Jersey is among the majority of the states that have adopted rules to ensure at least some access to Medigap plans for enrollees under the age of 65. And New Jersey goes further than many other states by also ensuring that people under age 65 don’t pay higher premiums for their Medigap coverage (in many states where Medigap plans are guaranteed issue for those under 65, the premiums are still higher because insurers know that disabled enrollees are likely to incur higher costs).
New Jersey’s consumer protections for disabled Medigap enrollees include provisions for those under age 50, and for those age 50-64. In both cases, as long as the person applies for a Medigap plan (Plan C, although this is changing to Plan D starting in 2020) within six months of enrolling in Medicare Part B, the coverage is guaranteed issue and the price won’t be more than the insurer charges for enrollees who are eligible for Medicare due to their age (as opposed to a disability). But younger applicants only have one insurer option, while older applicants can select from any Medigap insurer in their area:
- For Medicare beneficiaries who are under age 50, coverage is guaranteed issue only with the state’s contracted carrier (Horizon Blue Cross Blue Shield of New Jersey) and the available plan is Medigap Plan C (Plan D, starting in 2020). The state runs a program so that all carriers that offer health benefits in New Jersey share in the Medigap losses incurred by the contracted carrier for these enrollees.
- For Medicare beneficiaries who become eligible between the ages of 50 and 64, coverage for Plan C (Plan D, starting in 2020)is guaranteed issue with any insurer in New Jersey that offers Medigap plans. And insurers must maintain loss ratios of at least 65 percent for individual policies and 75 percent for group policies.
Under federal law (MACRA) that was enacted in 2015, Medigap Plans C and F can no longer be sold to people who become eligible for Medicare on or after January 1, 2020. So New Jersey enacted legislation (S.3651) in 2019 to align the state’s existing law with the new federal requirements. Starting in January 2020, Plan D will be the guaranteed-issue Medigap plan for disabled Medicare beneficiaries in New Jersey, instead of Plan C.
In 2019, lawmakers in New Jersey also considered legislation (A.4834 and S.2895) to provide continuous guaranteed-issue Medigap rights to Medicare beneficiaries who are at least 65 years old, but neither bill advanced in the legislature. The current rules (which mirror federal requirements and were not changed in the 2019 legislative session in New Jersey) only grant people a one-time six-month window during which they can pick a Medigap plan with guaranteed-issue rights. People who miss that window or pick a less-than-ideal Medigap plan are often unable to pick a different plan later on, because insurers can use medical underwriting to determine eligibility for coverage after that one-time enrollment window closes.
Medicare Part D in New Jersey
Original Medicare does not cover outpatient prescription drugs. But Medicare beneficiaries can get prescription coverage via a Medicare Advantage plan, an employer-sponsored plan (offered by a current or former employer), or a stand-alone Medicare Part-D plan.
As of November 2018, there were 912,159 Medicare beneficiaries in New Jersey who were enrolled in stand-alone Part D prescription drug plans. That’s about 57 percent of the state’s total Medicare beneficiaries, as opposed to about 43 percent of all Medicare beneficiaries nationwide enrolled in stand-alone Part D plans. But Medicare Advantage enrollment is lower than average in New Jersey, and Original Medicare enrollment is higher than average. Most people with stand-alone Part D plans buy them to supplement Original Medicare (since most Medicare Advantage plans include Part D coverage), so it makes sense that New Jersey has a higher-than-average enrollment in stand-alone Part D plans.
For 2019 coverage, there are 26 stand-alone Part D plans available in New Jersey, with premiums ranging from $12 to $102 per month.
Medicare spending in New Jersey
In 2016, according to data standardized to account for regional variations in payment rates, Original Medicare spent an average of $10,158 per beneficiary in New Jersey. This was only based on Original Medicare spending, so it did not include costs for Medicare Advantage enrollees. The national average that year was $9,533 per enrollee, so Medicare spending in New Jersey was 7 percent higher than the national average. On the high and low ends of the spectrum, per-enrollee Medicare spending in Louisiana stood at $11,399 in 2016, and was only $6,441 in Hawaii.
You can read more about Medicare in New Jersey in our state Medicare guide. You can also contact the New Jersey State Health Insurance Assistance Program with questions related to Medicare coverage in New Jersey.
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.