The Sky Isn’t Falling: New Jersey Consumers With Substandard Health Plans Have Choices (And the State Can Help)

December 4th, 2013  |  by  |  Published in Health Care, NJPP Blog: As a Matter of Fact ..., Press Releases

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FOR IMMEDIATE RELEASE

Contact: Maura Collinsgru, NJ Citizen Action: 609-519-0408 or Jon Whiten, NJPP Deputy Director: 917-655-3313

The Sky Isn’t Falling: New Jersey Consumers With Substandard Health Plans Have Choices (And the State Can Help)

Trenton – State officials and insurers are facing important policy choices regarding substandard health plans that will impact the availability of comprehensive health care that is affordable to as many New Jerseyans as possible, according to a new Issue Brief released today by New Jersey Policy Perspective (NJPP). Consumer health advocates from the NJ for Health Care Coalition joined NJPP’s Ray Castro to discuss the findings and reinforce that consumers have many good options to obtain quality coverage under the Affordable Care Act (ACA).

“Consumers haven’t heard the message – they have choices. If and when they need new coverage, they can access the coverage and protections offered by the ACA and apply for subsidies to help them cover the cost,” said Maura Collinsgru, Health Policy Advocate with NJ Citizen Action.

The report examines the range of choices available to policy makers and consumers regarding substandard health plans and the potential impact of cancelling or continuing them. It suggests the impact that cancelling substandard plans would have on consumers has been overstated since only one percent of New Jerseyans – 110,000 – have substandard plans, and they already have the option of extending these plans for up to one year.

“The problem of individuals losing their substandard health plans because they do not meet ACA requirements has been exaggerated and can be managed by the state, insurers, and federal government as long as they work together to address the real needs of these consumers. This issue needs to be put in its proper perspective,” said Ray Castro, Senior Policy Analyst at NJPP and author of the report.

While eliminating substandard plans is consistent with the state’s longtime goal to provide comprehensive insurance coverage for everyone, further extending substandard plans would lead to higher costs for others who purchase comprehensive insurance and could threaten important consumer protections guaranteed by the ACA. Those who stick with their current plans will not be eligible for tax credits or cost sharing assistance. They will also lose important benefits that outlaw discriminatory rating practices, as well as annual and lifetime caps on coverage.

The report recommends that New Jersey take a more hands-on role as several other states are doing by offering supplementary premium assistance to make comprehensive coverage more affordable. Most New Jerseyans would happily replace substandard plans with comprehensive insurance if increased costs were not part of the deal. While the ACA provides generous subsidies for insurance, these may not always be sufficient in New Jersey, which has one of the highest costs of living in the nation. The good news is that the state can help – and it should – by tapping the hundreds of millions of dollars each year it will begin saving in 2014 as a result of the Medicaid expansion to provide additional assistance to consumers.

Although not widely reported, or understood by New Jersey consumers, those who face cancellation this year have the option to continue in their current plan for one year if they re-enroll before December 31st. However, advocates strongly urged consumers to instead obtain the more robust and comprehensive coverage available through the Marketplace.

Consumer advocates say New Jerseyans need more information in order to make the choice that is right for them. To make the transition easier for those consumers affected, the state needs to oversee, monitor, and evaluate the transition process and ensure that consumers are aware of their rights and options.

The Coalition is renewing their call for the Governor to utilize the 7.6 million dollars remaining from a state planning grant to educate New Jerseyans on the range of new coverage options available to them and to help clear up the misconceptions that unnecessarily alarm consumers. The money could be lost if the Governor fails to submit a plan to CCIIO over the next two months.


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