Health insurance in New Jersey
- New Jersey uses the federally run health insurance exchange so applicants currently enroll through HealthCare.gov.
- But the state is overseeing the exchange as of 2020, and plans to have a fully state-run exchange — with its own enrollment platform instead of HealthCare.gov — by fall 2020.
- As of 2021, state-regulated health insurance plans in NJ will have to cap out-of-pocket prescription costs at no more than $150 per month per drug, in most cases.
- Open enrollment for 2020 health plans has ended, although residents with qualifying events can still enroll or make changes to their coverage for 2020. The next open enrollment period, for plans effective in 2021, will begin November 1, 2020.
- Three insurers offer 2020 coverage in New Jersey’s individual market.
- New Jersey’s average individual market premiums decrease for 2019, but increased by almost 9% for 2020.
- Almost 250,000 New Jersey residents enrolled in 2020 coverage through the exchange.
- New Jersey has accepted the ACA’s Medicaid expansion.
- Short-term health plans are not available for purchase in New Jersey.
- New Jersey’s CO-OP, Health Republic Insurance of New Jersey, stopped offering plans in 2017.
New Jersey’s health marketplace
New Jersey uses the federally run exchange, which means residents enroll in exchange plans through HealthCare.gov.
But the state has plans to change that. By the fall of 2020 (for enrollment in 2021 coverage), New Jersey plans to be running its own exchange, with its own enrollment platform. At that point, residents will no longer use HealthCare.gov.
And the state transitioned to a state-based exchange using the federal enrollment platform (SBE-FP) in the fall of 2019, which means New Jersey oversees the exchange and consumer outreach, although they are still using the HealthCare.gov enrollment platform.
Open enrollment for 2020 health plans has ended, although residents with qualifying events can still enroll or make changes to their coverage for 2020. The next open enrollment period, for plans effective in 2021, will begin November 1, 2020.
New Jersey law will require state-regulated health plans to cap out-of-pocket prescription costs
A.2431, which was enacted in New Jersey in January 2020, requires state-regulated health plans (ie, not plans that are self-insured) to cap members’ out-of-pocket prescription costs at $150 per month, per prescription (an earlier version of the bill called for the cap to be $100, but that was subsequently amended). Bronze plans can have caps as high as $250/month, and there are exceptions for catastrophic plans and HSA-qualified plans in order to allow those plans to continue to comply with federal requirements.
The legislation had passed unanimously in New Jersey’s legislature in December 2019. But while Gov. Phil Murphy expressed his support for the bill, he conditionally vetoed it due to concerns about its impact on the taxpayer-funded health plan that New Jersey offers to state and local government employees and school employees (those plans require the member to pay the difference if they choose a brand-name drug when a generic is available, and the legislation would have removed some of the incentives for members to select generic drugs).
Lawmakers agreed unanimously to accept the governor’s recommendations, and the measure was signed into law in January 2020. The cap on out-of-pocket prescription costs applies to both group and individual plans as of January 1, 2021 (for plans that renew on a date other than January 1, the new law applies as of their first renewal after January 1, 2021). The majority of very large businesses self-insure their coverage, and those plans are regulated by the federal government rather than state laws. So A.2431 doesn’t apply to self-insured plans.
New Jersey joins several other states that already have laws in place to cap out-of-pocket prescription drug costs.
Three carriers – AmeriHealth, Horizon BCBS and Oscar Health – offered plans in the New Jersey exchange in 2019, and all three are continuing to do so in 2020.
New Jersey’s individual market insurers finalized average rate increases for 2020 that ranged from about 6 percent to about 16 percent. This was considerably larger than the rate increases in most states for 2020, but premiums decreased by more than 9 percent in New Jersey in 2019 (while increasing slightly nationwide) and average premiums in New Jersey in 2020 are about $100/month lower than the average across all states that use HealthCare.gov.
During the open enrollment period for 2020 health coverage, 246,426 New Jersey residents enrolled in individual market health plans through the exchange. That was the third year in a row with a drop in enrollment, mirroring the national trend towards declining enrollment in states that use HealthCare.gov
Read more about the New Jersey health insurance marketplace.
Medicaid in New Jersey
New Jersey adopted the ACA’s Medicaid expansion and began utilizing federal funding to provide health insurance for the newly eligible population starting in 2014.
As a result, New Jersey’s Medicaid enrollment increased by 32 percent – more than 400,000 people – between the fall of 2013 and May 2019. Total Medicaid/CHIP enrollment in New Jersey as of mid 2019 stood at nearly 1.7 million people.
Read more about Medicaid expansion in New Jersey.
Short-term health insurance in New Jersey
Despite new federal short-term health insurance regulations that have rolled back restrictions on short-term plans, the plans are not for sale in New Jersey. A New Jersey statute that governs individual health insurance plans includes requirements that are not compatible with the short-term plans, so short-term coverage is essentially prohibited in the state – and short-term plans have not been sold in the state for 25 years.
Read more about short-term health insurance in New Jersey.
How did Obamacare help New Jersey residents?
New Jersey opted to let the federal government run its health insurance exchange but expanded Medicaid in 2014. And by the end of 2020, New Jersey plans to be running its own exchange platform.
In 2013, according to US Census data, 13.2 percent of New Jersey residents were uninsured. By 2018, that had fallen to 7.4 percent. Across all states, the uninsured rate started out higher than New Jersey – at 14.5 percent – and fell to an average of 8.6 percent by 2016, but had grown slightly, to 8.9 percent, by 2018.
New Jersey’s health insurance CO-OP
Health Republic Insurance of New Jersey was the trade name for Freelancer’s CO-OP of New Jersey, a Consumer Oriented and Operated Plan (CO-OP) established under the ACA. CO-OPs in 22 states received a total of $2 billion in grants from the federal government to establish their programs; Freelancer’s CO-OP of New Jersey received $109 million.
Most of the CO-OPs have since gone out of business; only four remain operational in 2020. New Jersey’s CO-OP was among the seven still in operation as of September 2016. But that month, the NJ Department of Banking and Securities placed Health Republic into rehabilitation and the CO-OP was no longer sell new policies. Existing Health Republic policies terminated at the end of 2016; as a result, nearly 35,000 individuals needed to find new health plans for 2017.
Initially, the hope was that state regulators would be able to stabilize the company enough for it to return to the marketplace in 2018, but that did not come to pass. On February 3, 2017, an order of liquidation for Health Republic was filed. All of the CO-OP’s assets were liquidated to repay creditors to the extent possible.
Medicare enrollment in the state of New Jersey
About 87 percent of New Jersey Medicare beneficiaries qualify based on age alone, while the remaining 13 percent are eligible due to disability.
Average per-enrollee Medicare spending in New Jersey stood at $10,398 in 2017, which was higher than the national average of $9,761. As of 2017, only six states had higher per-capita Medicare spending than New Jersey.
Read more about Medicare in New Jersey.
Health care reform legislation in New Jersey
New Jersey has enacted several important pieces of health care reform legislation recently, including:
- S.1878 (2018) — Directed the state to propose a 1332 waiver in order to establish a reinsurance program to stabilize the individual market, using federal funding that would otherwise have been spent on higher premium subsidies. The state received federal approval for the program in 2018 and rolled it out in 2019, with average premiums decreasing by about 9 percent as a result.
- A.2039 (2018) — Protects patients from surprise balance bills if they receive treatment from an out-of-network provider at an in-network facility.
- A.3380 (2018) — Created an individual mandate in New Jersey, effective as of 2019. The penalty for non-compliance is based on the federal individual mandate penalty that applied until the end of 2018, and revenue collected from the penalty will be used to fund the state’s portion of the reinsurance program.
- A.2431 (2019 session, enacted in 2020) — Caps out-of-pocket prescription drug costs at $150 per month per prescription ($250 in the case of Bronze plans) on state-regulated health plans. Effective in 2021.
New Jersey’s legislative session continues throughout the year.
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.