Federal health care reform will benefit NJ citizens and economy

By Raymond J. Castro, Senior Policy Analyst

One year ago, Congress passed and President Obama signed into law the Affordable Care Act (ACA), the nation’s most expansive national health care reform. Reactions to it have been extreme, ranging from ecstatic that most people soon will have access to affordable health care to fear that the nation has just enacted socialized medicine.

New Jersey Policy Perspective’s new report, Good Medicine: The impact of the Patient Protection and Affordable Care Act on New Jersey’s Working Families with Children, addresses these views and brings rationality to this discussion. It explains how the ACA is expected to provide affordable, quality insurance to most currently uninsured families and to expand consumer protection to families with insurance. The report suggests that everyone in New Jersey and the state’s economy will benefit.

The new law helps both parents and children.

About 180,000 additional parents will be insured, raising the percent of parents in New Jersey who have health insurance to 94 percent by 2019 from 86 percent today. Failure to insure parents has been a major shortcoming of NJ FamilyCare. These parents have often been the victims of budget shortfalls – last year alone about 50,000 parents were denied coverage because of budget cuts to the program. The ACA changes this dynamic by increasing family eligibility levels for premium and cost sharing subsidies and having the federal government pick up the cost. Under the ACA, a 3-person family that needs health insurance will be able to earn up to $73,240 annually instead of the $24,352 currently permitted under NJFamilyCare.

Under the ACA, about 6,000 additional uninsured children will be eligible for subsidies because of the new higher income threshold. Again the federal government will provide the additional subsidy. More children who are eligible but not enrolled in the program will likely enroll because research shows parents seek insurance for their children more when they themselves are insured.

The ACA is expected to benefit up to 2.9 million children and parents who have insurance because it establishes important consumer protections that will be required for most insurance policies. Many of these protections – such as prohibiting preexisting conditions for kids and cost sharing for preventive services like well-child visits – have already gone into effect.

As the report shows, it is likely that everyone will benefit to some degree from this new legislation. And where those benefits might fall short, the report includes recommendations on how New Jersey can maximize them.