Phil Murphy reinstates Obamacare mandate for '19

Gov. Phil Murphy signed a bill Wednesday to require most New Jerseyans to be covered by health insurance or pay a penalty, restoring a key provision of Obamacare.

Murphy also signed a bill to create a reinsurance program to help insurers pay for high-risk consumers.

"Protecting the viability of the individual mandate is needed to maintain a foundation for the insurance market and to allow the success of the (Affordable Care Act) to continue,” Sen. Joe Vitale, D-Middlesex, and a proponent of the bills, said.

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The moves announced by Murphy's office most directly affect consumers who don't get health insurance through Medicare or their employer. About 275,000 people in New Jersey were covered in the individual market, according to federal data.

The Trump administration eliminated the individual mandate for 2019 as part of the tax reform law, and it turned its attention to giving states more flexibility to offer less expensive — and less comprehensive — plans.

The mandate has been a sore spot for Obamacare opponents since the law began in 2010. Conservatives have argued that the government shouldn't be allowed to mandate what consumers buy, particularly a product as expensive as health insurance.

While upward of 80 percent of New Jerseyans buying insurance in the individual market receive subsidies to offset their premiums, many of the plans still have high deductibles that force them to pay thousands out of their own pockets before insurance kicks in.

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Health experts said the Obamacare marketplace would unravel without it. Young, healthy consumers would drop out, leaving older, more expensive consumers to carry the freight, they have said.

Premiums in New Jersey were expected to increase up to 32 percent next year — and 90 percent over the next three years — because of uncertainty in the insurance market, according to one report released by California's insurance marketplace.

Some states are already bracing for big hikes, according to a report from the National Conference of State Legislatures.

In Virginia, for example, it found Kaiser Foundation Health Plan requested an increase of 32.1 percent. 

"Without robust participation of these individuals, insurance premiums will climb and the market could destabilize," said Raymond Castro, director of health policy at New Jersey Policy Perspective, a left-leaning research group.

The Murphy Administration also will ask the federal government to support a reinsurance program to help insurers cover high-cost consumers.

Supporters of the idea have pointed to Minnesota, which created a reinsurance plan in 2018. Its Blue Cross Blue Shield plan said it raised premiums just 2.8 percent this year.

Michael L. Diamond; @mdiamondapp; 732-643-4038; mdiamond@gannettnj.com