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New Jersey health insurance marketplace

Despite resistance from lawmakers and hospitals, Horizon BCBS offers tiered network plans

  • By
  • contributor
  • December 21, 2015

Nearly 122k enrollments in first six weeks

From November 1 to December 12, enrollment in private plans through New Jersey’s exchange totalled 121,592. This included existing enrollees who had returned to the exchange to actively renew their coverage or pick a different plan for 2016, and it also included new enrollees. But it did not include automatic renewals for people who let the exchange renew their existing plan.

New Jersey is one of the 38 states that uses Across those 38 states, new enrollees accounted for 36 percent of enrollments by December 12. The other 64 percent are people who returned to the exchange to actively select a plan for 2016, as opposed to relying on auto-renewal. For a variety of reasons, it’s in consumers’ best interest to shop around each year, rather than letting existing plans auto-renew.

At the end of June 2015, 194,194 people had in-force private plan coverage in the New Jersey exchange. HHS hasn’t yet indicated a state-by-state breakdown of the ratio of new versus renewing consumers beyond the overall average for all states. But if New Jersey’s enrollment is similar to the average across all states, that would mean nearly 44,000 new enrollees and nearly 78,000 active renewals as of December 12.

Enroll by January 31 to get coverage for 2016

Open enrollment will continue until January 31. For plan selections made by January 15, coverage will be effective February 1. Plan selections made between January 16 and January 31 will have coverage effective March 1. If your plan was auto-renewed for January and you’d prefer a different plan instead, you can return to the exchange and pick a new plan that will take effect in February or March, depending on when you make the plan selection.

For people who don’t have insurance in 2016 and aren’t exempt from the ACA’s penalty, the penalty will be significantly higher than it was in 2014 and 2015. The penalty will be the greater of $695 per uninsured adult (half that amount for a child) up to $2,085 per household, OR 2.5 percent of household income above the tax filing threshold. For tax filers who owe a penalty, the average penalty is expected to be almost $1,000 in 2016 – about five times what it was for 2014.

You’re allowed a short gap in coverage that doesn’t last more than two months. So as long as you enroll by January 31 (for coverage effective March 1) and maintain your coverage for the remainder of the year, you’ll avoid the Obamacare penalty for 2016.

2016 rates

Five health plans are offering individual coverage in New Jersey’s exchange for 2016. Final approved rate changes for 2016 vary considerably from one carrier to another:

  • AmeriHealth: Rate changes vary from a 1.88 percent decrease to an 8.65 percent increase.
  • Freelancers CO-OP (Health Republic Insurance of NJ): average rate increases of 9 percent to 18 percent.
  • Horizon BCBS: Average rate increases are 5.26 percent for HMOs, 10.81 percent for EPOs, and 14.4 percent for catastrophic plans; Horizon’s OMNIA Alliance plans (details below) are new, but are priced lower than existing plans.
  • Oscar Insurance Corp. of NJ: rate decreases on most plans, with average rates ranging about 5 percent to 7 percent lower than 2015 prices. Oscar Secure plans have an average rate increase of less than one percent.
  • UnitedHealthcare (Oxford): average rate increases are 9.8 percent for PPOs and 11.2 percent for HMOs.

State-wide, the average benchmark (second-lowest-cost Silver) premiums are increasing by 5 percent in 2016. Benchmark premium changes are important in terms of their impact on subsidies, but they don’t tell us much in terms of how overall rates are changing. It’s important for current enrollees to shop around during open enrollment to make sure that they select the plan that will best meet their needs in the coming year.

Horizon BCBS rolls out new plans amid controversy

Horizon Blue Cross Blue Shield – New Jersey’s largest health insurer – is offering new health plans in 2016 that appear to be the solution enrollees across the country are looking for: 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. Not surprisingly, residents who were polled about the plans expressed support for the concept.

Horizon’s new plans were created under the OMNIA Alliance partnership with 22 hospitals, plus an additional 14 hospitals that will be designated “Tier 1.” These 36 hospitals have agreed to lower reimbursements but higher volume (since insureds will have to use one of those hospitals in order to get the lower copays and deductibles), and have also agreed to reimbursement based on quality of care and patient outcomes, rather than fee-for-service reimbursement.

But the other 36 hospitals in New Jersey have been designated “Tier 2” under the new plans, and insureds who use those hospitals will pay higher copays and deductibles (although insureds will still have access to those hospitals, and the hospitals will continue to receive their current reimbursement rate if insureds choose to use them). Those hospitals are upset that they were left out, and say they were caught off guard by the new Horizon plans.

There is concern that some of the Tier 2 hospitals – particularly those in disadvantaged areas of the state – will suffer significant financial losses as a result of the new plans. And among the hospitals in Tier 2 are two that have highly acclaimed neonatal intensive care units; going forward, fewer women will give birth at those hospitals if Horizon’s OMNIA Alliance plans garner a significant share of the market.

Nationwide, insurers who offer the lowest premiums have tended to see upticks in market share during the past two open enrollment periods. Narrow networks are much more common than they were a few years ago; when given the choice between a narrow network with a low premium and a broad network with a high premium, consumers tend to choose the former. Gill and Vitale have expressed concerns that Horizon’s new tiered network plan could dominate the market in the coming years.

Horizon’s approach in New Jersey still has to stand the test of time, but it’s 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 are the second-highest in the country, innovation to lower them is necessary.

Legislation aimed at halting new Horizon plans

Two New Jersey senators, both Democrats (Nia Gill and Joseph Vitale), asked the New Jersey attorney general and federal regulators to delay the implementation of the plans, amid fears that the new plan structure could lead to financial crisis for some hospitals, and limited access to care for some patients. The lawmakers want the state to determine whether Horizon violated any anti-trust and false-advertising laws in the creation of their new plan. They also want a more transparent system for oversight over the metrics health plans use when they determine which providers will be included when tiered provider networks are used.

But despite the controversy, the new Horizon plans became available for purchase on November 1.

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.”

On December 7, Gill and Vitale introduced three bills that address the Horizon Omnia situation. The bills would establish new standards for health plans with tiered networks (S.3286), require such plans to disclose how they create their networks (S.3287), and would require increased network adequacy standards for insurers in the state (S.3289). All three bill are still in committee as of December 21, and Horizon’s Omnia plans are still for sale.


Targeting Northern New Jersey

HHS announced in September that Northern New Jersey is one of five areas nationwide that have been identified as a target for increasing enrollment in 2016. The northern part of the state has a significant percentage of uninsured residents, and a variety of demographics that have presented challenges for enrollment assisters during the first two open enrollment periods.

Northern New Jersey has a significant population of “young invincibles,” low-income households, and immigrants. Many people in those demographics qualify for Medicaid or extensive premium subsidies, but outreach is crucial in making sure that they’re aware of the opportunity to enroll in coverage under the ACA. Northern New Jersey is home to several million Americans, and encompasses a significant portion of the New York City Metropolitan area.

2015 enrollment data

254,316 people enrolled in plans for 2015 through New Jersey exchange during the second open enrollment period, and 83 percent of them qualified for premium subsidies. The enrollment total includes 133,215 renewals from 2014, of which 75,712 were “active” renewals (as opposed to auto-renewals).  Of the active renewals, 45,197 picked a new plan for 2015 rather than keeping their existing 2014 coverage for another year.

Joel Cantor, director of the Rutgers Center for State Health Policy, had estimated that total private plan enrollment in the New Jersey exchange could reach 250,000 people by the end of the 2015 open enrollment period, and it turns out that his prediction was pretty spot-on.

But by the end of June, 194,194 people had in-force private plan coverage through New Jersey’s health insurance exchange. That’s nearly 24 percent fewer than the total number who had enrolled in coverage by the end of open enrollment, but attrition is to be expected during the nine months of the year when enrollment is limited to people with qualifying events. Some enrollees never paid their initial premiums, others cancelled their coverage mid-year, and others lost their subsidies or their coverage due to lack of proper documentation for immigration and financial status.

Another 60,757 New Jersey exchange enrollees were eligible for Medicaid or CHIP during the 2015 open enrollment period; Medicaid and CHIP enrollment continue year-round but tend to spike during open enrollment as a result of outreach activities and advertising.

Two new carriers in 2015 bring exchange total to five

In 2014, only three carriers participated in the exchange in New Jersey: Horizon Blue Cross Blue Shield, AmeriHealth, and Health Republic of New Jersey (Freelancer’s CO-OP).  For 2015, two more carriers joined them:  UnitedHealthcare (Oxford Health Plans) and Oscar Health Insurance.

Health Republic is a new consumer oriented and operated plan, or co-op, created under a provision of the ACA, and Oscar Health Insurance is an innovative new carrier that started in New York in 2014 and expanded to New Jersey in 2015.

2015 premiums

In the Newark area, the second-lowest-cost silver plan (the benchmark plan) was less expensive in 2015 than it was in 2014, but in most areas, staying with the benchmark plan involved switching carriers for 2015.  According to data from the Kaiser Family Foundation, the average in 2014 for a 40 year old non-smoker was $322 per month, and that dropped to $316 per month for 2015.

In Bergen County, the carriers offering the lowest-cost silver and bronze plans, as well as the second lowest-cost silver plan, were all different from the carriers that offered those plans in 2014 – highlighting the importance of shopping around during open enrollment.

The New York Times Upshot created an interactive map that further detailed the importance of shopping around during open enrollment.  For New Jersey residents (Newark area) who had the benchmark plan in 2014 and opted to simply renew that same plan, the average rate increase for 2015 was roughly 11 percent.  But people who shopped around and switched to the new benchmark plan saw an average rate increase of just 2.2 percent.

And across all plans and metal levels in the exchange, an analysis from the Commonwealth Fund found an average 2015 premium increase of just 2 percent for a 40 year-old non-smoker.

The relatively low level of competition in 2014 – just three carriers in the exchange – is one of the reasons for the higher-than-average premiums in New Jersey during the first open enrollment period.  According to a report released by the U.S. Department of Health and Human Services (HHS), the average 2014 cost for a bronze plan — the lowest-cost option — in New Jersey was $332 in 2014, compared to a national average of $249 a month.  But the entry of two new carriers has helped to hold down the average benchmark plan rates for 2015.

An HHS survey in June 2014 found that New Jersey had the highest average after-subsidy cost for health insurance among the 36 states where HHS ran the exchange in that year: $148 in New Jersey, compared with an average of $82 across all 36 states.  This is indicative of not only higher unsubsidized premiums, but also higher average incomes in NJ, and perhaps an affinity for plans with higher metal levels.  For people with the same income level (assuming they are subsidy-eligible), it doesn’t matter what state they live in or how expensive the unsubsidized premiums are — the subsidy amounts will differ, but the after subsidy premiums for silver plans will be the same, since the ACA sets net premiums as a percentage of income.

2014 enrollment data

For the 2014 open enrollment period, by April 19,  161,775 people had completed their enrollment in private plans through the New Jersey exchange.  Private plan Obamacare enrollments in the New Jersey exchange were nearly 70 percent higher than HHS had predicted last year, prior to open enrollment (the projection was about 113,000 people in 2014).  Every state saw a surge in enrollment in March and early April, but New Jersey’s was the seventh largest  surge in the country.

The carriers in New Jersey have been forthcoming with their enrollment numbers though.  AmeriHealth had 130,000 enrollees as of early September (up from about 10,000 at the end of 2013), and Horizon BCBS had 140,000 by mid-August.  Health Republic had enrolled roughly 4,000 new members.  These totals are for the carriers’ full book of business, including both on and off-exchange enrollments.  But AmeriHealth reported that the majority of their new enrollments have been through the exchange.

More health plans on the horizon?

In October 2014, two NJ hospital systems – Hackensack University Health Network and Meridian Health – signed preliminary paperwork to begin a merger process, and in May 2015, the two parties agreed to the merger – although the deal still has to be approved by regulators.  If approved, Hackensack Meridian Health will become the largest hospital system in NJ, and will include nine acute-care hospitals, two children’s hospitals, and numerous doctor’s offices, rehab centers, skilled nursing facilities, and assisted living centers.

Officials are predicting that the merger will lead to the creation of new provider-managed health insurance plans, which could bring more competition to the NJ health insurance market.

ACA’s impact on the uninsured rate

US census data put the uninsured rate in 2013 at 13.2 percent, and showed that it dropped to 10.9 percent in 2014. According to Gallup data, New Jersey’s uninsured rate in September 2013 was 14.9 percent, and they reported that by mid-2015, it had fallen to 9.7 percent.

In addition to the 194,194 people who had in-force private plan coverage through the New Jersey exchange in mid-2015, Medicaid/CHIP enrollment grew by 36 percent from 2013 to July 2015, reaching 1,749,110 by July 2015.

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 Gov. Christie. Those vetoes left the federal government to operate the health insurance marketplace in New Jersey.  Governor Christie has taken a very hands-off approach to the ACA, and the state has done little to promote the HHS-run exchange, 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, but it didn’t advance out of committee during the 2015 session.  Gill has been critical of Gov. Christie’s vetoes of the prior exchange-creation legislation, noting that New Jersey subsidies wouldn’t have been dependent on outcome of the King v. Burwell case if the state had created its own exchange.

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 early May.

New Jersey health insurance exchange links

State Exchange Profile: New Jersey
The Henry J. Kaiser Family Foundation overview of New Jersey’s progress toward creating a state health insurance exchange.

New Jersey Health Insurance Exchange
An overview of health exchange issues from the consumer advocacy group New Jersey Citizen Action.

Principles for Establishing a Pro-Consumer NJ Health Insurance Exchange (PDF)
From NJ For Health Care