Four Ways New Jersey Can Improve Health Care Using American Rescue Plan Funds

As state budget discussions come to a close this month, New Jersey lawmakers and advocates alike should turn their attention to the ways that the American Rescue Plan (ARP) can complement the state’s Fiscal Year (FY) 2022 budget. The ARP, signed into law by President Biden in March, includes expansions to food assistance, housing support, unemployment benefits, tax credits for working families, and health coverage to ensure a full and strong recovery after the COVID-19 pandemic.

The ARP’s health investment presents big opportunities to complement work that state leaders and advocates are pursuing through the state budget. Governor Murphy’s proposed FY 2022 budget and the subsequent legislative discussions should put New Jersey on a path toward a strong recovery, reversing in many ways the state government’s policy approach coming out of the Great Recession. Programs like Cover All Kids, support for reproductive health care, and Medicaid coverage for doula services will begin to address many root causes of the health disparities that existed prior to the pandemic and worsened its devastation in the state.

Through the ARP, New Jersey can build on these state-led efforts with federal funding and support. The ARP funds a long list of health programs, including subsidies for health insurance through the state exchange, public health infrastructure, community health workers, mental health and substance use services, home and community-based services, postpartum care, Medicaid expansion, and more. While New Jersey already expanded Medicaid (and thus cannot receive the increased funds for its introduction) and implemented the increased subsidies through GetCovered NJ, there are still several outstanding opportunities for health-specific investments. If targeted effectively, these funds can solidify New Jersey’s path to a quick, strong, and equitable recovery. Here are four priorities for decision-makers and advocates to consider when planning for the use of these funds.

1. Avoid Band-Aid Fixes by Investing in Long-Lasting Infrastructure

State and local leaders may find it tempting to spend the ARP funds on temporary fixes. Yet crisis-response investments without a broader strategy do not address the need for stronger, permanent public health infrastructure. Critically, infrastructure should not only include traditional physical infrastructure; it must incorporate and prioritize human infrastructure, or support for those who provide key services. Without this, New Jersey cannot adequately combat the effects of COVID-19 and structural racism to better weather the next pandemic.

The ARP’s funds support infrastructure development that addresses the devastation the pandemic has had on mental health and substance use challenges, particularly for communities of color. The $78 million that New Jersey receives through the ARP’s Community Mental Health Services Block Grant (MHBG) and Substance Abuse Prevention and Treatment Block Grant (SABG) can fund such expansions. This includes, for example, increasing the number of facilities and available beds that provide treatment for behavioral health issues that center person-centered care, while also supporting a larger public health workforce dedicated to treatment at those facilities. Adequate support provides improved paths to training, credentials, and benefits to support workers’ physical and mental wellbeing.

2. Expand The Length and Diversity of Services for Those with the Greatest Need

Many New Jerseyans, particularly Black and Latinx/Hispanic residents, do not have access to culturally-competent health services that address rapidly changing lifestyles and approaches to care, let alone services that actively counteract the effects of structural racism. By expanding the supported services through the NJ FamilyCare — the state’s Medicaid program — New Jersey can better cover people who face health vulnerabilities, including those with postpartum care needs or living with disabilities. By addressing gaps in health care, the state will better protect those who are at the highest risk of illness and death during a pandemic.

The ARP’s state option to extend Medicaid coverage of postpartum care to 12 months from 60 days (which was also proposed by Governor Murphy in his February FY2022 budget) will help around 8,700 New Jersey women per year receive the care they need. New Jersey leaders have already submitted plans to the federal government for an extension to six months; these will automatically be updated to reflect the full-year expansion. Additionally, the ARP’s enhanced federal funding for Medicaid Home and Community-Based Services (HCBS), which could bring approximately >$172.7 million into New Jersey, can be invested in services that protect people before, during, and after crises, removing the scramble to transition when future outbreaks occur. These can include maintaining and building on telehealth services, expanding personal care services, and providing personal protective equipment (PPE) supplies to home and community health workers.

3. Ensure Investments in the Health Workforce Last Beyond the Crisis

The COVID-19 pandemic emphasized the importance of a diverse and sufficiently supported health workforce in protecting all residents of the Garden State. Community health workers, who are both public health workers and intermediaries between health services and communities, and Direct Support Professionals (DSPs), who provide care directly to individuals with disabilities through programs like Medicaid Home and Community-Based Services (HCBS), serve vital roles in bridging the gaps between the health care system and the unique needs of individuals and communities.

Despite initiatives to better integrate the work of CHWs and increase pay for DSPs, New Jersey remains behind other states in adequately supporting these essential workers. The state still has one of the lowest numbers of community health workers (CHW) compared to the total number of jobs in the state, a turnover rate for DSPs that remains above 40 percent, and dismal wages for services. Continuing to underfund diverse and essential care severely limits resources for people and communities with the greatest health challenges and exacerbates structural racism on health. New Jersey can improve the system of care throughout the state by: ensuring that CHW, DSP, and other essential health workers’ reimbursement adequately support their vital services; supporting training through programs like the Colette Lamothe-Galette (CLG) Community Health Worker Institute; and redesigning training to be flexible and address not just current, but also growing and anticipated health needs. In addition to the HCBS enhanced federal funding, the ARP provides several grant opportunities that New Jersey leaders should leverage to invest in long-term solutions.

4. Keep the Public Conversation Open: Don’t Make The Plan One and Done

Conversations with communities whom COVID-19 has disproportionately harmed will continue to play an essential role in determining the most helpful ways to address the pandemic’s devastation. With changing social and economic circumstances throughout the state and country, the discussions on how best to target funds cannot be held to one-and-done meetings. Instead, New Jersey can make the most of the ARP’s opportunities by implementing broad plans that allow flexibility to respond to feedback from individuals, families, and communities. Ensuring that communities’ needs are addressed will help overcome structural biases in aid and investment. Additionally, planning for regular evaluations of the funding’s impact — instead of treating the ARP as a standalone, single action — can help to better target funds and improve health outcomes for New Jersey’s future.

Roadmap to Electrifying New Jersey’s Public Bus Fleet

Introduction

New Jersey’s future prosperity depends on a transportation system that works for everyone. Over generations, communities across the Garden State have come together to support the mobility of New Jerseyans through public transit. The state’s investments in transportation have nurtured economic productivity and improved access to jobs, schools, and other opportunities. Indeed, the state would look quite different without those forward-thinking investments.

While NJ Transit’s diesel bus fleet has been an indispensable tool for so many New Jerseyans, there are significant environmental and public health costs. By electrifying the state’s public bus fleet, New Jersey can reduce the environmental and health harms that arise from the use of diesel buses, including the greenhouse gas emissions that exacerbate climate change; zero emission buses would also contribute to healthier communities, especially for people of color and those living in low-income neighborhoods.[i]Electrifying public buses also provides a reliable and cost-effective option to maintain and expand the state’s transit system through advances in electric bus technology and rapid declines in battery costs.[ii]

This report examines the important benefits of public transit, particularly for people of color and low-income populations. It then describes the environmental and public health perils of a diesel-based fleet and reviews the environmental and health benefits of electric buses. The report also provides the major costs to and long-term savings of electrifying NJ Transit’s bus fleet, as articulated within the targets of the Electric Vehicle Law (N.J.S.A. 48:25-3). Finally, the report offers funding recommendations along with recommendations for a smoother and more equitable transition from diesel to electric public buses.

Public Transit as a Public Good

Hundreds of thousands of New Jersey residents across the state use and rely on public transit on a daily basis.[iii] Transportation connects people to jobs, medical appointments, grocery stores, child care, education, and more. During Fiscal Year 2019 alone, riders took 267.3 million trips on public transit in New Jersey, with more than half of those trips, or 141.2 million, taking place on public buses.[iv]

Yet, structural inequities shape — and are shaped by — transit access and use. On the one hand, low-wage jobs, low rates of car ownership, and the “digital divide” mean that some people use transit instead of working from home or driving cars to get where and what they need. For instance, households of color, particularly Black households, are less likely to have access to a vehicle as compared to their white counterparts.[v] And in cities with higher concentrations of people of color, like Jersey City and Newark, households are more likely to lack access to a vehicle compared to households in smaller cities.[vi] On the other hand, as this report discusses below in Section III, public transit, as it exists now, both highlights ー and can exacerbate ー other structural inequities, such as those in public health. Simply put, people of color disproportionately rely on public transit.

Black and Asian workers are almost two and three times as likely, respectively, as white workers to commute to work by public transit; Hispanic/Latinx workers are 1.5 times more likely. Specifically, 8.1 percent of white workers use public transit, while 15.9 percent of Black workers, 23.0 percent of Asian workers, and 12.8 percent of Hispanic/Latinx workers commute using public transit.

Trends by earnings are similar. Low-income workers are more likely to commute to work by public transit. Over the last 5 years, more than about 36 percent earned $35,000 or less.

Alternatively, over the past 5 years, workers earning $75,000 or more—about 30 percent—use public transit as their primary source of transportation, emphasizing the importance of transit for all income groups.

Mobility through public transit has remained vital during the COVID-19 pandemic. Commuters, many of whom are front-line workers, are using public buses at only a slightly lower frequency as compared to pre-pandemic travel, according to the NJ Transit Customer Travel Survey.[vii] In addition, about 90 percent of these riders have a household income of $75,000 and below, with 10 percent holding more than $75,000 in household income.[viii]

The Environmental and Health Effects of Public Transit

Public transit carries environmental and public health benefits by reducing the number of vehicles on the road, improving air quality, and alleviating traffic congestion and noise.[ix] Transit use supports the growth of more active communities, reduces people’s time spent sedentary in cars, and, as a result, reduces chronic illnesses associated with the sedentary nature of private transit, non-ambulatory commuting.[x] Public health benefits from public transit also result from the increased access to employment, health care services, social services, and food.[xi]

Although public transit positively contributes to environmental and public health outcomes, transit operations also generate negative impacts, which electrification of the bus fleet can offset or eliminate.

Emissions from mobile sources such as cars, trucks, and buses represent the largest share of greenhouse gas emission origination (42 percent) in New Jersey.[xii] Additionally, the vast majority of buses are diesel-powered, and the diesel exhaust emitted by buses and other heavy duty vehicles is a dangerous pollutant that worsens and triggers health problems.[xiii] Older buses deploy fewer diesel emission control technologies, and aging bus fleets have greater diesel emission impacts, particularly on the communities in which they operate.[xiv] The service life of a typical NJ Transit bus is about 12 to 13 years, with some buses approaching 20 years in age.[xv]

Particulate matter, which are aerosolized solid and liquid pollutants, can harm one’s lungs, heart, and brain.[xvi] New research links this type of pollution to the development of serious diseases, such as dementia.[xvii] What’s worse, studies have also shown that such air pollution can lead to premature death.[xviii] Premature deaths due to fine particulate matter (PM2.5) from roads alone claim up to 2,420 lives every year in New Jersey.[xix] Further, people with COVID-19 who live in areas of high air pollution are more likely to die from the disease, according to Harvard University’s School of Public Health.[xx] And hot spots for the virus are located in predominantly low-income Black neighborhoods.[xxi]

The harmful environmental and public health effects of diesel bus pollution disproportionately harm Black and Brown communities across the nation.[xxii] Bus idling tends to occur more often in these areas, as well.[xxiii] Further, people who live in these communities often live in close proximity to other large and small sources of pollution, as well as old abandoned, contaminated sites, which can pose risks to public health and the environment.[xxiv] This is largely a result of residential segregation, which is caused by structural, institutional, and individual racism. As a result of housing exclusionary housing policies, people of color are often concentrated in neighborhoods that are disempowered and marginalized, both politically and financially.[xxv]

Thankfully, New Jersey is focused on improving air quality by prioritizing the implementation of electric buses. Electric buses can reduce emissions of diesel exhaust, particulate pollution, and other pollutants, improving air quality in communities.[xxvi] For instance, electric buses can reduce greenhouse gas emissions by 75 percent, though this amount is dependent on the source of electricity used to charge buses.[xxvii] Overall, an electric bus eliminates approximately ten tons of nitrogen oxides and 350 pounds of diesel particulate matter over its typical 12-year lifespan.[xxviii] If emissions of diesel pollution in city neighborhoods were curtailed, then urban communities, particularly communities of color and low-income communities, could reap the benefits of public transit without suffering the public health costs.[xxix]

State Policies and Goals around Electrifying Public Buses

In 2020, New Jersey implemented N.J.S.A. 48:25-3 — which will be referred to as the “Electric Vehicle Law” in this report — to set forth targets and various incentives to increase electric vehicle use, spur infrastructure development, and ultimately reduce greenhouse gas emissions from the transportation sector. Part of this legislation directs NJ Transit to purchase battery-operated public buses, with the goal of buying only zero-emission public buses by 2032.[xxx]

NJ Transit Electric Vehicle Purchasing Goals and
Targets Outlined in the Electric Vehicle Law
Goal Target Date
10% December 31, 2024
50% December 31, 2026
100% December 31, 2032

NJ Transit’s current ten-year strategic plan and five-year capital plan dictate how the state phases in the purchases of electric buses, develops related infrastructure, and phases out diesel-fueled buses.[xxxi] The strategic plan presents a roadmap of strategic choices and critical investments, while the capital plan identifies projects, budget considerations, and scheduling.

NJ Transit is currently developing plans for electric bus deployment and to upgrade infrastructure, including the acquisition of specific dispatching technologies to ensure high-quality bus service when the rollout occurs.[xxxii]

Regarding electric bus rollout, NJ Transit’s “Phase 1” plan will replace 68 40-ft diesel transit buses that are currently in service with 68 40-ft electric buses and introduce 11 60-ft electric articulated buses, plus an additional 21 electric articulated buses dedicated for a new bus garage in northern New Jersey.[xxxiii] Later phase details are unknown to the public at the moment, but the estimated total cost to fully electrify the bus fleet is about $5.7 billion by 2040.[xxxiv]

As for bus garages, which will need to be zero-emission ready and capable of storing and maintaining electric buses, NJ Transit plans to construct two additional garages, completely replace four current garages, and modernize the remaining 12 garages, all for an estimated total cost of $2.65 billion.[xxxv] Currently, the transit authority operates 16 bus garages that range between 20 and 120 years old, none of which have been majorly renovated since 1998.[xxxvi]

The two new bus garages, referred to as the “Northern Bus Garage” and “Second Northern Bus Garage,” will likely be located near the Meadowlands. Although NJ Transit has not acquired land for the projects yet, the facilities are expected to include modern features such as solar panels, up-to-date fleet and maintenance equipment, and modifications for electric buses.[xxxvii] Estimated costs for these garages are approximately $928 million, plus the cost of land acquisition.[xxxviii]

NJ Transit also plans to implement a separate Bus Garage Replacement Program, contingent upon receiving necessary funding. The program would replace the four oldest bus garages: the Market Street Garage (Paterson), Oradell Garage (Oradell), Big Tree Garage (Nutley), and Fairview Garage (Fairview). The estimated costs for this program are $609 million.[xxxix] The costs to modernize or replace bus garages include charging infrastructure, unit substations, and maintenance equipment.

Finally, NJ Transit will modernize the remaining 12 bus garages to accommodate electric vehicle charging infrastructure and electric buses. The estimated costs of this modernization process total approximately $1.12 billion.[xl]

NJ Transit Garage Construction and Renovation Plans
Garage Project Location  Time Frame Estimated Costs
Construct 2
New Garages
Northern Bus
Garage, TBA
5 years $536 million
Second Northern Bus
Garage, TBA
9 years $392 million
Replace 4
Old Garages
Paterson, Oradell, Nutley, and Fairview 11 years $608.5 million
Modernize 12
Remaining Garages
Around the State 11 years $1.115 billion
Total $2.65 billion

Source: NJ Transit Capital Plan Financial Summary (Unconstrained) and Economic Impact Study of NJ Transit’s Five Year Capital Plan.

Three major challenges arise with the rehabilitation, modernization, and replacement of existing garages:

  1. The temporary loss of capacity on bus lines, since each garage needs to be taken out of service. This loss of capacity can put a strain on those who rely on bus transportation, particularly low-income individuals.
  2. Some garages may not be able to accommodate the configuration and size of new, larger buses and electric bus fleet upgrades across all neighborhoods due to the narrowness of some streets. However, NJ Transit is conducting analyses at the four locations that will be modernized, identifying routes that can accommodate anticipated electric bus configurations.
  3. The path to determining and securing funding sources for the garage plan rollout, including the purchasing of buses and the development of necessary infrastructure, remains unclear.

NJ Transit’s Timeline to Transition to Electric Buses is Misaligned with Goals Set in the Electric Vehicle Law

The NJ Transit capital plan, published in June 2020, estimates that the total cost to replace the entire diesel fleet will be about $5.7 billion and that a 100-percent fleet transition will not be achieved until 2040, eight years past NJ Transit’s original goal.[xli] The Electric Vehicle Law specifies a target date for 100-percent electric bus purchases by December 2032. Further, while NJ Transit’s five-year $11.21 billion capital plan was approved, with $1.4 billion for projects in the plan for Fiscal Year 2021 alone, there is no clear funding source for the $5.7 billion needed to implement the diesel bus replacement program.[xlii]

 There’s also potential misalignment under NJ Transit’s current strategic plan, too. Through 2026, the transit agency plans to devote about $15 million towards the purchase of electric buses,[xliii] which is a small fraction of the $1.68 billion needed for the implementation of bus purchases and deployment in that time.[xliv] This indicates that less than one percent of bus purchases over the next six years would be electric, which drastically misses the electric bus vehicle goals outlined in the Electric Vehicle Law.[xlv]

However, NJ Transit plans on creating a bus electrification master plan by 2022. As the economic crisis exacerbated by the COVID-19 pandemic continues, the capital and strategic plans may see further changes as well.

Electric Buses: Costs and Savings

To better inform ongoing and future conversations around bus electrification efforts in New Jersey, this section examines the major costs and savings of replacing the entire active fleet with electric buses by the legislative target of 2032.

Bus Purchasing Costs and Savings

NJ Transit has approximately 2,183 active diesel buses in its entire fleet.[xlvi] To accommodate current ridership, the transit authority would need 1.2 electric buses for every diesel bus.[xlvii] As such, about 2,620 electric buses would be needed to replace the current diesel fleet. The approximate cost for a 40 ft-electric bus is about $749,000,[xlviii] whereas a 40-ft diesel bus costs about $500,000.[xlix] Therefore, it would cost about $1.96 billion to replace all diesel buses with electric ones.

Upfront Costs of Electric and Diesel Bus Fleets
Bus Type  Cost per Bus  Total Cost of Fleet
Electric Bus with
450 kWh Batteries
(2,620 buses)
$749,000 $1.96 Billion
Electric Bus
without 450 kWh Batteries
(2,620 buses)
$553,000 $1.45 Billion
Diesel Bus Fleet
(2,183 buses)
$500,000 $1.10 Billion

Source: Proterra; American Public Transit Association.

However, there are opportunities for significant savings. For instance, the costs of electric buses are expected to decline, given the trend of gradually decreasing purchase prices and the increased availability of battery leasing options.[l] For example, the price of electric buses purchased by Foothill Transit, in the San Gabriel Valley of Greater Los Angeles, declined from $1 million in 2009 for a 35-ft electric bus to $789,000 in 2015 for a 40-ft bus.[li] Some transit agencies have even purchased electric buses for less than $700,000 when bought in bulk. For example, LA Metro purchased 60 electric buses at the price of $686,000 in 2017 from Build Your Dreams (BYD), another electric bus manufacturer.[lii] What’s more, new manufacturers are designing lighter buses at potentially lower costs. For instance, Arrival, a U.K.-based electric vehicle startup with a factory in New Jersey, claims that their electric buses will be priced much like diesel buses, significantly lowering the total cost of ownership.[liii]

The cost of batteries, which are approximately a quarter of the total cost of an electric bus, are declining by 5 to 10 percent each year.[liv] And since 2010, battery prices have fallen by 79 percent.[lv] In 2017, lithium-ion battery prices were $209/kWh, down significantly from $1,000/kWh in 2010.[lvi]

As the cost for electric batteries continues to decline, battery-leasing options are also becoming more available.[lvii] This method allows NJ Transit to pay for batteries slowly over the lifespan of the electric bus. For example, a Proterra electric bus with batteries costs approximately $749,000, whereas one without batteries costs about $553,000.[lviii]

Maintenance Costs and Savings

Currently, NJ Transit spends approximately $263 million per year on maintenance for diesel buses.[lix] However, there can be significant savings with electric buses, which result from no longer needing to address mechanical service required by an internal combustion engine (ICE), lack of oil and filter changes, and fewer tires and brake pad replacements.[lx] Transitioning to electric buses can potentially save about $81,500 per bus, per year, or $213.7 million for the electric bus fleet, per year.

Maintenance Costs and Savings, Electric and Diesel Buses
  Diesel  Electric
Cost per Mile $2.93 $0.55
Cost per Year $263.1 Million $49.4 Million
Savings per Bus N/A $81,500
Savings per Bus/Year N/A $213.7 Million

Source: NJ Transit; U.S. PIRG.

Fuel Costs and Savings 

With the conversion to electric buses, NJ Transit can expect major savings on fuel costs, as electric buses will not need diesel fuel, which costs New Jersey about $2.81 per gallon, or about $61.6 million per year to fuel its diesel fleet. The electric cost per bus is about $0.19 per mile, which would cost about $17.1 million per year. Overall, the state could potentially save approximately $44.5 million per year in fuel costs.

Fuel Costs and Savings, Electric and Diesel Buses
  Diesel  Electric
Cost per Mile $2.81 $0.19
Cost per Year $61.6 Million $17.1 Million
Savings per Bus/Year N/A $44.5 Million

Source: NJ Transit; U.S. PIRG.

Other Costs

Charging Infrastructure

In addition to the costs mentioned above, electric buses come with charging infrastructure costs. However, costs for each charger installation are site-specific and costs can vary significantly depending on site characteristics.[lxi] While NJ Transit will most likely pursue a mix of fast chargers, slow chargers, and overhead charging stations — in the same way other transit agencies across the nation that are implementing the rollout of electric buses have[lxii] — the transit authority will need to conduct a technical route analysis to determine its charging infrastructure needs. This kind of assessment considers rider demand, location, and duration of the pre-existing bus routes. For example, King County Metro Transit’s charging infrastructure cost for a fast charger serving four electric buses is an estimated $144,000, and for a slow-charger serving two electric buses, $34,000.[lxiii] In addition to chargers, the installation for supporting infrastructure will also need to take place. Transit agencies report that supporting infrastructure, like an overhead direct current (DC) charging pantograph, may cost between $80,000 to $110,000 per unit.[lxiv]

Training

A transition to electric buses will require training for operators and maintenance workers. While a bus manufacturer like Proterra provides free initial training for operators and maintenance workers,[lxv] the state will need to offer more robust opportunities for workers to train and learn. Currently, NJ Transit’s annual maintenance and operator training for diesel buses costs $1,500,000 and $3,900,000, respectively.[lxvi] As the state procures more electric buses, training will continue for bus operators and maintenance workers on remaining diesel buses, while simultaneously building the capacity for bus operators and maintenance workers who will transition to electric bus operations.

Other Savings

Health Savings

Harmful emissions increase the incidence of illnesses and respiratory diseases, which impose healthcare costs. Conversion to electric buses is estimated to reduce hospitalization and emergency room costs, as well as the costs of missing work.[lxvii] For instance, residents in Chicago and New York City can expect an average of $55,000 and $150,000 in health savings per electric bus per year, respectively, once their city’s fleets are fully electrified.[lxviii] Further, using the same methodology, D.C. residents should expect about $8 million per year in healthcare savings from electrifying the Metropolitan Area Transit bus fleet.[lxix]

Greenhouse Gas Savings

Conversion to electric buses brings greenhouse gas savings, which are generally monetized using the social cost of carbon. Specifically, this cost measures the economic harm from climate change — such as extreme weather events, the spread of disease, food insecurity — on businesses, families, and governments. These impacts are expressed as the dollar value of the total damages from emitting one ton of carbon dioxide into the atmosphere.[lxx] The savings accrued through carbon reduction from electric buses is about $3,000 per bus per year.[lxxi] For New Jersey, this means the state can expect around $8 million greenhouse gas savings in a single year from the electric bus fleet and about $95.9 million over the 12-year lifespan of electric buses.[lxxii]

Recommendations to Help Offset Costs to New Jersey’s Electrification Efforts

 This section explores potential funding opportunities from state, regional, and federal sources to support NJ Transit’s bus electrification efforts.

State-Level

Highway Widening Funds

In June 2020, Governor Murphy approved plans to expand the NJ Turnpike, the Garden State Parkway, and the Atlantic City Expressway in the Pinelands, costing an estimated $16 billion.[lxxiii] However, advocates are calling to dedicate these funds to mass transit and bus electrification as expanding highways encourages more automobile travel and worsens congestion — increasing emissions in overburdened communities.[lxxiv] By putting more funding into mass transit, New Jersey can better support commuters, specifically essential and front-line workers who rely on NJ Transit’s daily bus services, and reduce air pollution from transportation.

 Clean Energy Program Funds

The state frequently diverts Clean Energy Program funds to support NJ Transit operations.[lxxv] However, transit operations are not in line with the fund’s purpose, which is to offer financial incentives, programs, and services to help save energy, money, and the environment for residents, businesses, and local governments.[lxxvi] If the state insists on continuing to use these funds, they would be better allocated to bus electrification, which is more in line with the fund’s mission.

To limit these diversions and leave more funds available in NJ Transit’s capital budget for electrification projects, the state should use the annual $375 million (gradually increasing to $525 million per year) that the Commissioner of the state Department of Transportation pledged to give to NJ Transit’s operating budget from the NJ Turnpike Authority.[lxxvii] Currently, the transfer is set at $129 million because the balance was put into escrow; however, this should be available sometime in Fiscal Year 2022.[lxxviii]

Progressive Taxation

In the wake of the COVID-19 pandemic and the current recession, more revenue will be required to support important investments. While not all new revenue sources would be dedicated to public transit, growing the proverbial pie would help free up other resources for important issues that certainly include transit. Thankfully, the millionaires’ tax, which raises the top income tax rate to 10.75 percent for incomes over $1 million, was passed in September 2020.[lxxix] This tax is expected to bring about $400 million for Fiscal Year 2021 reaching up to $450 million each year thereafter.[lxxx] However, more options must be considered.

New Jersey has the opportunity to restore its sales tax to seven percent and modernize it to include more services, especially those used by higher-income households, like chartered flights, interior decorating, and limousine services. Additionally, the state can restore the estate tax with a higher threshold that would help it regain the lion’s share of the revenue it previously collected while ensuring that the wealthiest heirs pay their fair share at the state level. Reinstating the tax on estates worth more than $1 million would recoup 93 percent of the tax revenue that the state formerly collected from this source.[lxxxi] The overall revenue collected can enhance public services for New Jersey residents, and the funding of electric buses, electric bus garages, and the requisite charging infrastructure should be a top priority.

Regional-Level

Transportation and Climate Initiative Program (TCI-P)

TCI is a regional collaboration of Northeast and Mid-Atlantic States and the District of Columbia that seeks to improve transportation, develop the clean energy economy, and reduce carbon pollution from the transportation sector.[lxxxii] The states have proposed a “cap and invest” model, TCI-P, where an increasingly strict limit would be placed on carbon dioxide pollution (CO2) produced by fuel companies. Companies would purchase “pollution permits” through regular auctions to cover the amount of pollution they plan to emit. The proceeds generated would be divided amongst participating states and invested in programs such as increased public transit, active transportation like walking and biking, and electrifying vehicles. Supply and demand determine the price of these permits, and the program would allow a company to buy more permits if they need a higher clearance to pollute or sell extra pollution permits for a profit.

Preliminary revenue estimates from the TCI-P for New Jersey, based on the memorandum of understanding (MOU) released in December 2020 between four participating jurisdictions,[lxxxiii] indicate $236 million in 2023, growing to $339 million in 2032, and with a cumulative amount of $2.875 billion over 10 years. Realizing this revenue will require legislative action, which has not yet begun. However, New Jersey remains at the table for the development of this program.

While this can be a significant funding source, there are concerns from overburdened communities — who often bear the brunt of air pollution from transportation — and other advocates as to how much pollution TCI-P will reduce and how the funds will be spent. Market-based programs, like TCI-P, can only limit the total emissions, not guarantee pollution reduction in any specific community, like those most harmed.[lxxxiv] However, through the MOU and the recently released draft model rules,[lxxxv] states are committing to invest no less than 35 percent of proceeds to ensure that overburdened and underserved communities benefit equitably from clean transportation projects and programs. In addition, the TCI-P states commit to establish an Equity Advisory Body — composed of diverse stakeholder groups, with a majority of members representing overburdened and underserved communities — or designate an existing body that meets this description, to advise on decision-making and equitable outcomes for TCI-P. While this stated intention is important, ultimately, an MOU or draft model rules cannot require participating states to prioritize funding or pollution reductions in overburdened communities. Therefore, legislation would need to be explicit about reducing the harms in the communities most harmed by air pollution.

Federal-Level

Federal Grants

The Volkswagen Environmental Mitigation Trust allocates funding to states to use for defined eligible projects that reduce Oxides of Nitrogen (NOx) as well as support the expansion of zero-emission vehicle adoption.[lxxxvi] Specifically, this funding can be used to purchase electric buses and invest in charging infrastructure. NJ Transit has already been awarded $8 million to purchase eight electric buses in Camden;[lxxxvii] in total, New Jersey’s allocation under the federal settlement was $72.2 million.[lxxxviii]

In addition, the U.S. Department of Transportation offers grants to states to support public transit. For instance, NJ Transit was granted about $7 million in funding in Fiscal Year 2020 to purchase new electric buses for service expansion purposes through the Federal Transit Administration’s (FTA) Low or No-Emission (Low-No) Grant Program.[lxxxix]

Other grant opportunities from the U.S. Department of Transportation include the FTA’s Bus and Bus Facilities Grant Program, which will provide a combined $464 million to grantees.[xc] Under this grant for FY 2020, New Jersey received $14.7 million to modernize the Wayne Bus Garage.[xci] There’s also the Better Utilizing Investments to Leverage Development (BUILD) Transportation Discretionary Grant Program, which provided a combined $1 billion to grantees in 2020.[xcii]

Other Recommendations for a More Equitable Transition

This section offers recommendations for a smoother and more equitable transition to electric bus infrastructure.

Energy and Electricity Resiliency

Energy resiliency is having a reliable, regular supply of energy and measures in place to minimize disruptions to energy service, such as power failures or state of emergencies.[xciii] Specifically, NJ Transit can strengthen resilience through the following:

  • Energy Reliability: Many factors can affect bus mileage, such as temperature and the number of stops, which can affect the reliability of electric buses during an emergency. During the procurement process, NJ Transit can test vehicles’ battery capacity in an operational setting to understand resiliency needs in advance, similar to how the Chicago Transit Authority operates.[xciv]
  • Electric School Buses: Electric school buses with Vehicle-to-Grid capability have the capacity to both recharge their battery and feed energy back to the grid. At the University of California San Diego, electric vehicles are becoming a part of the campus’s electric grid during the day, in order to support peak energy usage.[xcv] NJ Transit can work with school authorities to maximize electric resiliency when electric school buses begin to see implementation in New Jersey.

 

NJ Transit has been able to mobilize its diesel bus fleet during challenging events in the past, such as the attacks on September 11th in 2001 and the difficulties during Hurricane Sandy in 2012. Still, it will be more challenging to maintain energy storage for electric buses in statewide emergencies. With just 42.6 megawatts of capacity installed in 2019,[xcvi] New Jersey has a long way to go to achieve its goals of 600 megawatts of energy storage by 2021, and 2,000 megawatts by 2030, as required by the Clean Energy Act.[xcvii]

Coordination with Other Agencies

NJ Transit should coordinate with the following as it transitions to an all-electric bus fleet:

  • NJ Board of Public Utilities (BPU): BPU and NJ Transit can work together to roll out electric buses, particularly around bus depot upgrades and charging infrastructure.
  • New York Metropolitan Transportation Authority (MTA): NJ Transit could potentially coordinate with MTA to share costs of charging infrastructure. NJ Transit operates in Manhattan through New York’s Port Authority Midtown Bus Terminal and the authorities can ensure that they can charge buses on each other’s grids.
  • Port Authority of New York and New Jersey (PANYNJ): NJ Transit and PANYNJ should share information concerning use of technology and other lessons learned as PANYNJ rolls out electric buses. They could also potentially share the costs of the charging infrastructure by using each other’s grids, particularly since PANYNJ has plans to redesign their bus terminal in Manhattan, the busiest bus terminal in the country, with charging equipment for electric buses.[xcviii]
  • New Jersey Department of Environmental Protection (DEP): DEP, in coordination with NJ Transit, should measure and oversee the effects of electric buses on air quality, especially in overburdened communities. While DEP already operates 30 air monitoring stations across the state, New Jersey can better maximize its monitoring network, much like Utah does. The Utah Department of Environmental Quality’s Division of Air Quality uses a variety of tools to address air pollution, such as permit conditions, air-quality research and planning, and enforcement actions.[xcix] By tying monitoring alerts to the pollution in neighborhoods, a concentrated effort can be made to reduce pollution across the state, while also identifying areas where electrification efforts are needed the most.

 

Coordination with Communities 

NJ Transit should make the electric bus implementation process transparent and inclusive by holding regular meetings with trusted community leaders and community-based organizations, like Ironbound Community Corporation and Make the Road New Jersey. This will ensure that the implementation’s progress is shared directly with the most impacted people and communities on a regular basis.

Further, NJ Transit should prioritize outreach campaigns in various languages to bring awareness and information about bus electrification efforts. Many people in New Jersey rely on bus transportation for their livelihoods. Therefore, the agency should communicate safety, affordability, benefits to health and the environment, and how those benefits pertain to each community.

Coordination with Transit Workers

The state should support workforce retraining, as electrification requires training in new technology, placement in quality jobs for existing transit workers, and apprenticeships for incoming transit workers. Re-employment and training programs can also be used to structure certifications and ensure that new electric vehicle-related opportunities do not undermine the existing skills that workers have or erode quality standards for the existing workforce.

In addition, safety training and precautions must be prioritized for transit workers. NJ Transit, along with the New Jersey Amalgamated Transit Union (ATU), should ensure that bus manufacturers redesign airflow on buses, especially during health pandemics. In 2020 alone, 15 NJ Transit workers died from COVID-19.[c] Further, there should be more investment in safety training to include an overview of hazards associated with battery chargers, harms associated with hydrogen fuel cells as compared to conventional fuels, battery-specific safety hazards, such as electrocution, arcing, and fires from short circuits, and more.[ci]

Acknowledgments from the Author

To the endowment bestowed through the Kathleen Crotty Fellowship and The Energy Foundation, thank you for funding my research and empowering me to learn about such a critical development in the state’s transportation sector.

A sincere thank you to every single person I spoke with while writing this report, beginning with Dan Fatton, Doug O’Malley, and Nat Bottigheimer. I truly appreciate our meaningful conversations and your patience with me.

Thank you to representatives from NJ Transit, ChargeEVC, Proterra, Tri-State Transportation, New Jersey Board of Public Utilities, Amalgamated Transit Union, Rutgers University, Port Authority of New York and New Jersey, Clean Water Action, Jobs to Move America, New Jersey Department of Environmental Protection, Make the Road – New Jersey, Ironbound Community Corporation, and urban planners from across the nation. Your advice, insight, and expertise were invaluable.

Thank you to everyone at New Jersey Policy Perspective — Sheila, Louis, David, Brittany, and Vineeta — for being the most supportive colleagues. A special shout out to Brandon McKoy, who always took the time to provide me with his guidance. He truly leads with a vision like no other, grounded in equitable solutions and amplifying the voices of all New Jerseyans.

And finally, thank you Nicole Rodriguez. You are the best mentor and boss I could ever ask for. I am forever indebted to you. Thank you for being patient. I have learned so much from you, and I know you will be a lifelong mentor.

 


 

Endnotes

[i] U.S. PIRG Education Fund, Environment America Research and Policy Center, and Frontier Group. (2019). Electric Buses in America: Lessons from Cities Pioneering Clean Transportation. Page 10. https://uspirg.org/sites/pirg/files/reports/ElectricBusesInAmerica/US_Electric_bus_scrn.pdf; Ernani F. Choma, John S. Evans, James K. Hammitt, José A. Gómez-Ibáñez, John D. Spengler. (2020). Assessing the health impacts of electric vehicles through air pollution in the United States, Environment International, Volume 144, 2020, 106015, https://doi.org/10.1016/j.envint.2020.106015.

[ii] U.S. PIRG Education Fund, Environment America Research and Policy Center, and Frontier Group. (2019). Electric Buses in America: Lessons from Cities Pioneering Clean Transportation. Page 4. https://uspirg.org/sites/pirg/files/reports/ElectricBusesInAmerica/US_Electric_bus_scrn.pdf

[iii] U.S. Census Bureau, American Community Survey. (2019). 1-Year Estimates, share of workers who use public transportation by yearly earnings, 16 years and over, New Jersey
https://data.census.gov/cedsci/table?q=earning&text=transportation&t=Income%20and%20Poverty&g=0400000US34&tid=ACSDT1Y2019.B08119&hidePreview=true

[iv] 267.3 million refers to unlinked bus trips. New Jersey Transit. (FY 2019). Facts at a Glance. https://d2g63oyneaimm8.cloudfront.net/sites/default/files/pdfs/FactsAtaGlance.pdf

[v] National Equity Atlas. (2018). Car access: Everyone needs reliable transportation access and in most American communities that means a car. New Jersey data. PolicyLink. https://nationalequityatlas.org/indicators/Car_access#/?geo=02000000000034000

[vi] National Equity Atlas. (2018). Car access: Everyone needs reliable transportation access and in most American communities that means a car. New Jersey data. PolicyLink. https://nationalequityatlas.org/indicators/Car_access#/?geo=02000000000034000

[vii] Frontline workers are workers within essential industries who must physically show up to their jobs, such as in hospitals, food service, and in transportation.

NJ Transit. (2020, June). Board Operations and Customer Service, Public Committee Meeting, June 26, 2020. Customer Travel Survey. Page 33.

[viii] NJ Transit. (2020, June). Board Operations and Customer Service, Public Committee Meeting, June 26, 2020. Customer Travel Survey. Page 37. 90 percent does not include bus trips to New York but in North Jersey (90 percent) and South Jersey (94 percent).

[ix] Zhang, K., & Batterman, S. (2013). Air pollution and health risks due to vehicle traffic. The Science of the total environment, 450-451, 307–316. https://doi.org/10.1016/j.scitotenv.2013.01.074

[x] Center for Advanced Infrastructure and Transportation (CAIT) Rutgers University. (2020). Economic Impact Study of NJ Transit’s Five-Year Capital Plan. Population Health, Page 17. https://njtplans.com/downloads/capital-plan/Final%20Report_Economic%20Impact%20Study%20of%20NJ%20TRANSIT’s%205-year%20Capital%20Plan%206-5-20.pdf

[xi] Center for Advanced Infrastructure and Transportation (CAIT) Rutgers University. (2020). Economic Impact Study of NJ Transit’s Five-Year Capital Plan. Population Health, Page 17. https://njtplans.com/downloads/capital-plan/Final%20Report_Economic%20Impact%20Study%20of%20NJ%20TRANSIT’s%205-year%20Capital%20Plan%206-5-20.pdf

[xii] NJ Department of Environmental Protection. (2019). 2018 Statewide Greenhouse Gas Emissions Inventory. Page 4. https://www.nj.gov/dep/aqes/pdf/GHG%20Inventory%20Update%20Report%202018_Final.pdf

[xiii] U.S. Department of Transportation. Zero Emission Buses. Sierra Club https://www.transportation.gov/sites/dot.gov/files/images/Zero%20Emission%20Buses.pdf;  U.S. Department of Transportation. (2015). Cleaner Air. https://www.transportation.gov/mission/health/cleaner-air

[xiv] Cooper, Erin, Arioli, Magdala, Carrigan, Aileen, & Jain, Umang. (2012, October). Exhaust Emissions of Transit Buses: Sustainable Urban Transportation Fuels and Vehicles. World Resources Institute. Page 2. https://wrirosscities.org/sites/default/files/Exhaust-Emissions-Transit-Buses-EMBARQ.pdf

[xv] NJ Transit. (2020a, June). Capital Plan Project Sheets, Appendix B: Bus Fleet. https://njtplans.com/downloads/capital-project-sheets/separated/NJ_Transit_Bus_Fleet.pdf

[xvi] American Lung Association. (2020, April 20). Particle Pollution. https://www.lung.org/clean-air/outdoors/what-makes-air-unhealthy/particle-pollution

[xvii] American Lung Association. (2020, April 21). Nearly Half of U.S. Breathing Unhealthy Air; Record-breaking Air Pollution in Nine Western Cities. Press Release. https://www.lung.org/media/press-releases/state-of-the-air-2020

[xviii] National Institutes of Health (NIH), (2018, January 23). Air pollution linked to risk of premature death. https://www.nih.gov/news-events/nih-research-matters/air-pollution-linked-risk-premature-death

[xix] PM2.5 refers to particulate matter less than 2.5μm in diameter.
Fabio Caiazzo, Akshay Ashok, Ian A. Waitz, Steve H.L. Yim, Steven R.H. Barrett. (2013). Air pollution and early deaths in the United States. Part I: Quantifying the impact of major sectors in 2005, Atmospheric Environment, Volume 79, 2013, Pages 198-208, ISSN 1352-2310. Table 5. https://www.sciencedirect.com/science/article/pii/S1352231013004548

[xx] Air pollution linked with higher COVID-19 death rates. (2020, May 5). News. https://www.hsph.harvard.edu/news/hsph-in-the-news/air-pollution-linked-with-higher-covid-19-death-rates/

[xxi] What Do Coronavirus Racial Disparities Look Like State By State? (2020, May 30). National Public Radio. https://www.npr.org/sections/health-shots/2020/05/30/865413079/what-do-coronavirus-racial-disparities-look-like-state-by-state

[xxii] Disparities in the Impact of Air Pollution. (2020, April 20). American Lung Association. https://www.lung.org/clean-air/outdoors/who-is-at-risk/disparities

[xxiii] Union of Concerned Scientists. (2019). Inequitable Exposure to Air Pollution from Vehicles in the Northeast and Mid-Atlantic. https://www.ucsusa.org/resources/inequitable-exposure-air-pollution-vehicles

[xxiv] Commonwealth of Massachusetts. (2017). Environmental Justice Policy of the Executive and Office of Energy and Environmental Affairs. Page 1. https://www.mass.gov/doc/open-space-and-recreation-plan-workbook/download

[xxv] The Century Foundation. (2020). Environmental Racism Has Left Black Communities Especially Vulnerable to COVID-19. https://tcf.org/content/commentary/environmental-racism-left-black-communities-especially-vulnerable-covid-19/?agreed=1

[xxvi] U.S. PIRG Education Fund, Environment America Research and Policy Center, and Frontier Group. (2019). Electric Buses in America: Lessons from Cities Pioneering Clean Transportation. Page 9. https://uspirg.org/sites/pirg/files/reports/ElectricBusesInAmerica/US_Electric_bus_scrn.pdf

[xxvii] Antti Lajunen, Timothy Lipman. (2016). Lifecycle cost assessment and carbon dioxide emissions of diesel, natural gas, hybrid electric, fuel cell hybrid and electric transit buses. Volume 106, 2016, Pages 329-342, ISSN 0360-5442, https://doi.org/10.1016/j.energy.2016.03.075.

[xxviii] Strauss, Rebecca. (2019). “Electric Buses and Clean Energy Financing: How Transit Authorities Can Leverage State and Federal Funds to Buy More Zero-Emission Buses” Georgetown Environmental Law Review. Volume 32. Issue 1. Fall 2019. Page 148. https://www.law.georgetown.edu/environmental-law-review/wp-content/uploads/sites/18/2020/01/GT-GELR190049.pdf

[xxix] U.S. PIRG Education Fund, Environment America Research and Policy Center, and Frontier Group. (2019). Electric Buses in America: Lessons from Cities Pioneering Clean Transportation. Page 10. https://uspirg.org/sites/pirg/files/reports/ElectricBusesInAmerica/US_Electric_bus_scrn.pdf

[xxx] N.J.S.A. 48:25-3. https://lis.njleg.state.nj.us/nxt/gateway.dll?f=templates&fn=default.htm&vid=Publish:10.1048/Enu

[xxxi] NJ Transit. (2020). NJ Plans. https://njtplans.com/

[xxxii] New Jersey Transit, personal communication, August 2020.

[xxxiii]  NJ Transit. (2020a, June). Capital Plan Project Sheets, Appendix B: Bus Fleet. Page 2. https://njtplans.com/downloads/capital-project-sheets/separated/NJ_Transit_Bus_Fleet.pdf

[xxxiv] NJ Transit. (2020a, June). Capital Plan Project Sheets, Appendix B: Bus Fleet. Page 5. https://njtplans.com/downloads/capital-project-sheets/separated/NJ_Transit_Bus_Fleet.pdf

[xxxv] NJ Transit. (2020, June). Unrestrained Financial Summary. Appendix A. Table 2. Page 5. https://njtplans.com/downloads/capital-plan/NJ_Transit_Capital_Plan_Financial_Summary_(Unconstrained).pdf

[xxxvi] NJ Transit. (2020, June). Capital Plan Project Sheets, Appendix B: Bus Garages. Page 2. https://njtplans.com/downloads/capital-project-sheets/separated/NJ_Transit_Bus_Garages.pdf

[xxxvii] NJ Transit. (2020c, June). Capital Plan Financial Summary (Unconstrained). Page 2. https://njtplans.com/downloads/capital-plan/NJ_Transit_Capital_Plan_Financial_Summary_(Unconstrained).pdf

[xxxviii] NJ Transit. (2020, June). Capital Plan Financial Summary (Unconstrained). Appendix A https://njtplans.com/downloads/capital-plan/NJ_Transit_Capital_Plan_Financial_Summary_(Unconstrained).pdf

[xxxix]  NJ Transit. (2020, June). Capital Plan Project Sheets, Appendix B: Bus Garages. https://njtplans.com/downloads/capital-project-sheets/separated/NJ_Transit_Bus_Garages.pdf

[xl] NJ Transit. (2020, June). Capital Plan Project Sheets, Appendix B: Bus Garages. https://njtplans.com/downloads/capital-project-sheets/separated/NJ_Transit_Bus_Garages.pdf;  NJ Transit. (2020c, June). NJT Capital Plan Unconstrained Financial Summary. https://njtplans.com/downloads/capital-plan/NJ_Transit_Capital_Plan_Financial_Summary_(Unconstrained).pdf

[xli] NJ Transit. (2020a, June). Capital Plan Project Sheets, Appendix B: Bus Fleet.  https://njtplans.com/downloads/capital-project-sheets/separated/NJ_Transit_Bus_Fleet.pdf

[xlii] Politico Pro New Jersey. (2020, October 22). “NJ Transit board approves $2.6B budget with no fare increase.” https://subscriber.politicopro.com/states/new-jersey/story/2020/10/22/nj-transit-board-approves-26b-budget-with-no-fare-increase-1329547

[xliii] Johnson, T. (2020, June 19). NJ Transit Misses the Mark by Committing Just $15M to Electric Buses Through 2026, Critics Say. NJ Spotlight News. https://www.njspotlight.com/2020/06/nj-transit-misses-the-mark-by-committing-just-15m-to-electric-buses-through-2026-critics-say/

[xliv] NJ Transit. (2020c, June). NJT Capital Plan Unconstrained Financial Summary. Page 6. Table 2. https://njtplans.com/downloads/capital-plan/NJ_Transit_Capital_Plan_Financial_Summary_(Unconstrained).pdf

[xlv] NJ Transit. (2020c, June). NJT Capital Plan Unconstrained Financial Summary. https://njtplans.com/downloads/capital-plan/NJ_Transit_Capital_Plan_Financial_Summary_(Unconstrained).pdf

[xlvi] Government and External Affairs Department, New Jersey Transit, personal communication, August 2020.

[xlvii] NJ Transit and Rocky Mountain Institute. (January, 2020.) Bus Electrification Workshop. Slide 30.

[xlviii]Proterra. (2017). Current State of Public Transit Funding Options for Electric Vehicles and Charging Systems. American Public Transportation Association. https://www.apta.com/wp-content/uploads/Resources/mc/sustainability/previous/2017sustainability/presentations/Presentations/Current%20State%20of%20Public%20Transit%20Funding%20Options%20for%20Electric%20Vehicles%20and%20Charging%20Systems%20-%20Alan%20Westenskow.pdf

[xlix]Dickens, M. (2020, July 31). Public Transportation Vehicle Database [Dataset]. American Public Transportation Association. https://www.apta.com/research-technical-resources/transit-statistics/vehicle-database/

[l] Quarles, Neil, Kara Kockelman, and Moataz Mohamed. (2020) “Costs and Benefits of Electrifying and Automating Bus Transit Fleets,” Sustainability.https://doi.org/10.3390/su12103977; Lajunen, A., & Lipman, T. (2016). Lifecycle cost assessment and carbon dioxide emissions of diesel, natural gas, hybrid electric, fuel cell hybrid and electric transit buses. Energy, 106, 329–342.http://doi.org/10.1016/j.energy.2016.03.075

[li] L. Eudy, R. Prohaska, K. Kelly, and M. Post, “Foothill Battery Electric Bus Demonstration Results,” NREL/TP-5400-65274, National Renewable Energy Laboratory, January 2016). https://www.nrel.gov/docs/fy17osti/67698.pdf

[lii] LA Metro. (2017). Contract 2016-0988 – Metro Board. https://boardagendas.metro.net/board-report/2016-0988/; LA Metro. (2017b). Contract 2017-0304 – Metro Board. https://boardagendas.metro.net/board-report/2017-0304/

[liii] The Guardian. (2021, Feb.) Electric busmaker Arrival schedules first UK road trial. https://www.theguardian.com/business/2021/feb/21/electric-busmaker-arrival-schedules-first-uk-road-trial

[liv] Quarles, Neil, Kara Kockelman, and Moataz Mohamed. (2020.) “Costs and Benefits of Electrifying and Automating Bus Transit Fleets.” Page 6. Sustainability. https://doi.org/10.3390/su12103977; National Renewable Energy Laboratory, U.S. Department of Energy Office of Energy Efficiency & Renewable Energy. (2020.) Financial Analysis of Battery Electric Transit Buses. Technical Report. Page 8. https://afdc.energy.gov/files/u/publication/financial_analysis_be_transit_buses.pdf

[lv] Bloomberg New Energy Finance. (2018, March). Electric Buses in Cities: Driving Towards Cleaner Air and Lower CO2. Page 21. https://data.bloomberglp.com/professional/sites/24/2018/05/Electric-Buses-in-Cities-Report-BNEF-C40-Citi.pdf

[lvi]  Bloomberg New Energy Finance. (2018, March). Electric Buses in Cities: Driving Towards Cleaner Air and Lower CO2. Page 22. https://data.bloomberglp.com/professional/sites/24/2018/05/Electric-Buses-in-Cities-Report-BNEF-C40-Citi.pdf

[lvii] Green Tech Media. (2019.) Proterra Rolls Out $200 Million Electric Bus Battery Leasing Program With Mitsui: Electric buses require more upfront investment than their diesel counterparts. Or at least they used to. https://www.greentechmedia.com/articles/read/proterra-rolls-out-bus-battery-leasing-program-with-mitsui

[lviii] This calculation is derived by taking the cost of an electric bus and subtracting it by the cost of batteries ($700,000-$196,000=$504,000).

[lix] Government and External Affairs Department, New Jersey Transit, personal communication, August 2020.

[lx] Maloney, P. (2019, October 17). Electric buses for mass transit seen as cost effective. American Public Power Association. https://www.publicpower.org/periodical/article/electric-buses-mass-transit-seen-cost-effective

[lxi] California Environmental Protection Agency. Air Resources Board. (2015). Technology Assessment: Medium-and Heavy-Duty Battery Electric Truck and Buses. Page V-9. https://ww2.arb.ca.gov/sites/default/files/classic//msprog/tech/techreport/bev_tech_report.pdf

[lxii]M.J. Bradley & Associates LLC. (2020). Battery Electric Bus and Facilities Analysis. Milwaukee County Transit System. https://www.mjbradley.com/sites/default/files/MTSElectricBusFinalReportFINAL15jan20_0.pdf;  King County Metro Transit. (2017). Feasibility of Achieving a Carbon-Neutral or Zero Emission Fleet. King County Metro; Stantec Consulting Services Inc. (2020, October 13). https://kingcounty.gov/~/media/elected/executive/constantine/news/documents/Zero_Emission_Fleet.pdf; and University of Massachusetts Amherst. (2017). Zero-Emission Transit Bus and Refueling Technologies and Deployment Status. Massachusetts Department of Transportation. These are a few studies that show how transit authorities are using a mixed electric bus charging infrastructure.

[lxiii] King County Metro Transit. (2017). Feasibility of Achieving a Carbon-Neutral or Zero Emission Fleet. King County Metro; Stantec Consulting Services Inc. (2020, October 13). https://kingcounty.gov/~/media/elected/executive/constantine/news/documents/Zero_Emission_Fleet.pdf

[lxiv] WSP. (2020, April). San Bernardino Countywide Zero-Emission Bus Study Master Plan. San Bernandino County Transportation Authority. Pg. 38. https://www.gosbcta.com/wp-content/uploads/2020/08/SBCTA-ZEB-Final-Master-Plan_04.24.20.pdf; Burns & McDonnell Engineering Company, Inc., ebusplan, & Greenlots, A Member of the Shell Group. (2019). In Depot Charging and Planning Study. Foothill Transit. http://foothilltransit.org/wp-content/uploads/2014/05/Burns-McDonnell-In-Depot-Charging-and-Planning-Study.pdf

[lxv]Proterra Northeast Regional Division of Sales, personal communication, August 2020.

[lxvi] Government and External Affairs Department, New Jersey Transit, personal communication, August 2020.

[lxvii] Aber, Judith. (2016, May). Electric Bus Analysis for New York City Transit. Columbia University. http://www.columbia.edu/~ja3041/Electric%20Bus%20Analysis%20for%20NYC%20Transit%20by%20J%20Aber%20Columbia%20University%20-%20May%202016.pdf

[lxviii] Chicago Transit Authority. (2019). Electric Buses. https://www.transitchicago.com/electricbus/#Benefits; Aber, Judith. (2016, May). Electric Bus Analysis for New York City Transit. Columbia University. http://www.columbia.edu/~ja3041/Electric%20Bus%20Analysis%20for%20NYC%20Transit%20by%20J%20Aber%20Columbia%20University%20-%20May%202016.pdf

[lxix] Sierra Club. (2020.) A Vision for Climate Leadership in Washington, DC: Seizing the Economic, Climate, and Public Health Benefits of Electrifying WMATA’s Transit Bus Fleet Page 12. https://www.sierraclub.org/sites/www.sierraclub.org/files/blog/WMATAReport_Final.pdf

[lxx] Environmental Defense Fund. (2020.) The true cost of carbon pollution. https://www.edf.org/true-cost-carbon-pollution; U.S. Environmental Protection Agency. Economics of Climate Change. https://www.epa.gov/environmental-economics/economics-climate-change

[lxxi] Aber, Judith. (2016, May). Electric Bus Analysis for New York City Transit. Columbia University. Page 19. http://www.columbia.edu/~ja3041/Electric%20Bus%20Analysis%20for%20NYC%20Transit%20by%20J%20Aber%20Columbia%20University%20-%20May%202016.pdf

[lxxii] This calculation is derived by multiplying the fleet of 2,665 buses and the greenhouse gas savings of $3,000.

[lxxiii] Tri-State Transportation Campaign, BlueWaveNJ, Clean Water Action, Environment New Jersey, New Jersey Policy Perspective, & New Jersey Sierra Club. (2020, April). Rail and Road Recovery. Tri-State Transportation Campaign. http://www.tstc.org/wp-content/uploads/2020/04/Rail-and-Road-To-Recovery-Final.pdf

[lxxiv] Advocacy Groups Urge NJ Turnpike Authority to Put the Brakes on $24B Capital Plan. (2020, April 28). NJ Spotlight. https://www.njspotlight.com/2020/04/advocacy-groups-urge-nj-turnpike-authority-to-put-the-brakes-on-24b-capital-plan/; CityLab, Bloomberg L.P., September 2018, “CityLab University: Induced Demand.” https://www.citylab.com/transportation/2018/09/citylab-university-induced-demand/569455/

[lxxv] NJ Spotlight News. (2020, March 3). Murphy’s Plan for NJ Transit: Where the Money’s Going to Come From. https://www.njspotlight.com/2020/03/murphys-plan-for-nj-transit-where-the-moneys-going-to-come-from/

[lxxvi] New Jersey’s Clean Energy Program. (2020). New Jersey’s Clean Energy Program. https://njcleanenergy.com/

[lxxvii] New Jersey Turnpike Authority. March 18, 2020 Public Hearings on 2020 Long-Range Capital Plan and Necessary Toll Adjustment on New Jersey Turnpike and Garden State Parkway. Pages 6-8. https://www.njta.com/media/5311/hearing-report-and-recommendation.pdf

[lxxviii] Politico New Jersey. (2020, September). NJ Transit budget may be sign board not functioning as reform law intended. https://www.politico.com/states/new-jersey/story/2020/09/18/nj-transit-budget-a-sign-board-not-functioning-as-reform-law-intended-1317170

[lxxix] Politico. (2020, September 30). Murphy signs a $32.7B budget that ‘will be there for the people of New Jersey.’ https://www.politico.com/news/2020/09/30/phil-murphy-budget-new-jersey-424274

[lxxx] Office of Legislative Services. (2020.) Legislative Fiscal Estimate. S2949. https://www.njleg.state.nj.us/2020/Bills/S3000/2949_E1.PDF

[lxxxi] Sheila Reynerston, New Jersey Policy Perspective. (2017.) Fairly and Adequately Taxing Inherited Wealth Will Fight Inequality & Provide Essential Resources for All New Jerseyans. https://www.njpp.org/publications/report/fairly-and-adequately-taxing-inherited-wealth-will-fight-inequality-provide-essential-resources-for-all-new-jerseyans/

[lxxxii] Transportation and Climate Initiative. (2021.) Memorandum of Understanding. https://www.transportationandclimate.org/sites/default/files/TCI%20MOU%2012.2020.pdf

[lxxxiii] Transportation and Climate Initiative. (2021.) Memorandum of Understanding. https://www.transportationandclimate.org/sites/default/files/TCI%20MOU%2012.2020.pdf

[lxxxiv] Union of Concerned Scientists. (2019, June). Inequitable Exposure to Air Pollution from Vehicles in the Northeast and Mid-Atlantic. https://www.ucsusa.org/resources/inequitable-exposure-air-pollution-vehicles?_ga=2.165707262.1575461946.1597037520-1621630665.1597037520

[lxxxv] Transportation and Climate Initiative Program. (2021, March 1). Summary of the Draft Model Rule. https://www.transportationandclimate.org/sites/default/files/Summary-of-TCI-P-Draft-Model-Rule-March-2021.pdf

[lxxxvi] Department of Environmental Protection. Frequently Asked Questions About the Federal Volkswagen Settlement and New Jersey. https://www.state.nj.us/dep/vw/faq.html

[lxxxvii] Department of Environmental Protection. Frequently Asked Questions About the Federal Volkswagen Settlement and New Jersey. Overview of Distribution of Mitigation Funds. https://www.state.nj.us/dep/vw/project.html

[lxxxviii] Department of Environmental Protection. Frequently Asked Questions About the Federal Volkswagen Settlement and New Jersey. https://www.state.nj.us/dep/vw/faq.html

[lxxxix] Federal Transit Administration. (2020). Fiscal Year 2020 Low or No-Emission (Low-No) Bus Program Projects. https://www.transit.dot.gov/funding/grants/fiscal-year-2020-low-or-no-emission-low-no-bus-program-projects

[xc] Federal Transit Authority. (2020) Grants for Buses and Bus Facilities Program. https://www.transit.dot.gov/bus-program

[xci] Larry Higgs, NJ Advance Media for NJ.com. (2020a, August 7). NJ Transit gets $15M federal grant to pave the way for electric buses. Nj. https://www.nj.com/news/2020/08/nj-transit-gets-15m-federal-grant-to-pave-the-way-for-electric-buses.html

[xcii] U.S. Department of Transportation. (2020.) About BUILD Programs. https://www.transportation.gov/BUILDgrants/about

[xciii] U.S. Department of Energy. (2016.) State Energy Resilience Framework. Prepared by Global Security Sciences Division, Argonne National Laboratory.  Page 2. https://www.energy.gov/sites/prod/files/2017/01/f34/State%20Energy%20Resilience%20Framework.pdf

[xciv] Bailey, L. (2020, October). Planning for a Climate Resilient Electric Bus Fleet. Tri-State Transportation Campaign. Page 10. http://www.tstc.org/wp-content/uploads/2020/09/09-29-2020_Resiliency-Report.pdf

[xcv] UC San Diego, Jacobs School of Engineering. (2018, April 5). A power player for San Diego. Press release. https://jacobsschool.ucsd.edu/news/release/2519

[xcvi] Maldonado, S. (2021, January 26). Environmentalists: Proposed PSE&G electric vehicle settlement won’t advance state’s goals. Politico PRO. https://www.politico.com/states/new-jersey/story/2021/01/26/environmentalists-proposed-pse-g-electric-vehicle-settlement-wont-advance-states-goals-1360277

[xcvii] Dutzik, Tony, & Friedman, Jamie. (2020). Renewables on the Rise. Environment America Research & Policy Center and Frontier Group. https://environmentamerica.org/feature/ame/renewables-rise-2020

[xcviii] New York Times. (2021, January 21).  ‘Notorious’ Port Authority Bus Terminal May Get a $10 Billion Overhaul. https://www.nytimes.com/2021/01/21/nyregion/port-authority-bus-terminal.html

[xcix] Utah Department of Environmental Quality. (2021). Monitoring Matters: How Air-Quality Monitoring Helps Utah’s Air. https://deq.utah.gov/air-quality/air-quality-monitoring-utah

[c] Josh Axelrod, NJ Advance Media for NJ.com & Larry Higgs, NJ Advance Media for NJ.com. (2020, December 31). A bus driver, a mechanic, a bridge operator. These 15 NJ Transit employees died from COVID-19. Nj. https://www.nj.com/community-news/2020/12/a-bus-driver-a-mechanic-a-bridge-operator-these-15-nj-transit-employees-died-from-covid-19.html

[ci] Center for Transportation and the Environment. (2019.) Zero Emission Bus Roadmap. In partnership with: SINGH + Associates, Inc. Page 66. https://www.cyride.com/Home/ShowDocument?id=9880

Slow Down: Horizon’s Restructuring Plan Raises Red Flags

In the final weeks before the holidays, New Jersey lawmakers have introduced a new bill with an old goal: the corporate restructuring of Horizon Blue Cross Blue Shield, the state’s largest, and only charitable, health insurer. This is one of the most complex pieces of legislation, if not the most complex, that state lawmakers have considered all year. Horizon is the largest insurer in the individual, small group, and large group markets; covers approximately 3.6 million New Jerseyans, or more than one out of every three residents; and has significant influence over the quality and affordability of health insurance in the Garden State. As such, this proposal is crucial to the future of the state and must be carefully considered in an open and transparent manner. There is no reason to rush the process and doing so would simply invite shortsighted decision making and regrettable mistakes.

In short, the bill would change Horizon’s corporate structure to separate its health insurance operations from other business ventures; it would also change Horizon’s tax liability. This complexity, paired with a lack of critical information and transparency, means that big questions remain unanswered regarding the bill’s potential impact on the access to and affordability of health care for millions of New Jersey residents. State lawmakers would be wise to slow down the process — as the bill is currently being fast-tracked through the Legislature — to better assess the proposal and ensure that any such restructuring centers the needs of the public interest, both in regard to improving health coverage for all as well as protecting the state’s finances.

Restructuring Is Not New, but it Remains Complex

According to the proposed legislation (S3218/A5119), Horizon, which is currently a health service corporation with a charitable mission, would restructure into a not-for-profit mutual holding company. This holding company could then own stock in both non-profit and for-profit subsidiaries. The insurance portion of the business would be reorganized into a stock company, with the stocks wholly owned by either the mutual holding company or intermediate holding companies, which in turn are fully owned by the not-for-profit mutual holding company (simply put, a sizeable chunk of Horizon’s assets would be invested in for-profit business ventures instead of initiatives that promote public health). The bill states that the not-for-profit mutual holding company would remain committed to its charitable mission, while also allowing Horizon to invest more funds in for-profit subsidiaries than is currently allowed by law. The purpose of this restructuring lies, according to Horizon, in the company’s desire to invest more actively in newer technologies, gain ground in the ever-developing health care market, and better serve its millions of customers.

While this is a new bill, restructuring is not a new concept. Over the last few decades, Horizon has attempted to convert its corporate structure many times and in varying forms. Blue Cross Blue Shield affiliates in other states have similarly restructured, dating back to the 1990s, with varying impacts and outcomes. Some, like the conversion in California, resulted in the transfer of a full value of the company’s assets to charitable foundations focused on health. This is what a 2001 conversion law passed in New Jersey requires the company to do if they attempt to become a for-profit company. Some of the most recent conversions in other states — such as Michigan, Florida, Nebraska, and North Dakota — have involved a change to a not-for-profit mutual holding company as proposed in New Jersey, but with varying investment commitments of Blue Cross Blue Shield’s assets. While not a new or unique move on the part of Horizon, the challenge of determining how the change will impact New Jersey’s health care market remains.

Legislators Can Address Market Shifts While Still Ensuring a Fair and Just Process

The health care market has changed significantly over the last three decades. The speed of new technological advancements and a growing understanding of racial disparities in health and health care means that the ideas and investments underpinning health outcomes in the United States are shifting. It is understandable that companies look to increase their competitiveness and further invest assets in these new innovations and goals. However, this does not lessen the need for informed decision making, especially as it relates to the impact on the state’s budget and access to health insurance coverage.

Since the 1990s, public health experts have rigorously studied health insurer conversions and offered key recommendations for states considering similar proposals. In a 2003 Rutgers Center for State Health Policy report, researchers stressed the importance of a deliberate and transparent policy making process. Given the complexity of health insurer restructuring, as well as the unknown impact it would have on health care in New Jersey, state lawmakers should adopt the following improvements to the current legislation and process:

Recommendation 1: Do Not Proceed Without an Independent Evaluation of Horizon’s Assets

The bill does not include the current value of Horizon’s assets — critical information which has determined the fair value of tax payments from Blue Cross Blue Shield when it restructured in other states — nor does it have a fiscal note provided by the Office of Legislative Services to help stakeholders understand its broader budgetary impacts (basic information that should be provided to all elected representatives before voting on any bill). This missing information limits lawmakers’ and the public’s ability to determine whether the proposed changes to Horizon’s tax liability are fair for the state. The changes would result in Horizon making an upfront payment of $600 million to the state by June 2022 (a detail that adds to the question of why this bill needs to be rushed now when the first payment won’t be made for 18 months), along with an additional $650 million payment over seventeen years. Further, there is no guarantee that Horizon will make all of the latter annual payments, as they can be deferred — and expire — under certain conditions. Overall, the proposed change from a health service corporation into a not-for-profit mutual holding company would significantly reduce Horizon’s tax liability.

Until now, the most recent valuation of Horizon’s assets has not been publicly available. The insurer’s annual financial statement for 2019 was just released Thursday, December 10 by the Department of Banking and Insurance (DOBI) on its website, well after the Assembly concluded their second hearing on the bill and despite the report being submitted to the state this past March. It will take time for lawmakers and the public alike to digest this newly available information and determine what a fair deal might look like. The best way to accomplish this would be to have Horizon’s financial statements independently analyzed and discussed in an open hearing to estimate the current fair market value of the company.

State lawmakers need to carefully understand this information before proceeding with any restructuring proposal in order to avoid what happened in Michigan, where lawmakers underestimated the value of their Blue Cross Blue Shield affiliate’s assets when they restructured and, as a result, received lower annual payments than they otherwise would have.

New Jersey has a bad history with receiving lump sum and limited long-term payments like those outlined in this proposed legislation. Experiences like the tobacco settlement of 1998 and Governor McGreevey’s subsequent bonding to fill budget holes proved to be regrettable mistakes for the state budget in later years. State lawmakers should exercise caution, then, on pushing through an opaque plan that has not been fully vetted.

Putting aside the grave mistake of accepting limited payments instead of maintaining long-term funds, the proposed payments of $600 million and $650 million are not clearly dedicated in the legislation. At the very least, receipt of these funds should be explicitly dedicated to improving health insurance coverage and health care in New Jersey — a goal that is consistent with Horizon’s charitable mission.

Recommendation 2: Conduct a Health Impact Study

Any change to the state’s largest health insurer must address its impact on the health of New Jerseyans. So far, there has been no health impact study to allow state decision makers and the public to understand what the effects of this proposed restructuring may be on premium rates, coverage, and choice of plan in the insurance market.

When Blue Cross Blue Shield restructured in other states, it had clear impacts on health insurance markets, and there is no reason to suggest this would not be the case in New Jersey. Statistical analyses of earlier for-profit conversions in other states showed increases in premium rates and possible increased risk selection, which is when insurers have incentive to enroll those in good health, rather than those who are in worse health and may cost more in claims. States that avoided these adverse effects of restructuring often did so by establishing a health-focused charitable foundation with conversion funds. For example, the lifting of the Medigap rate freeze in Michigan was addressed, at least temporarily, by subsidies from the Michigan Health Endowment Fund, which was formed through the restructuring in 2013. The establishment of a foundation is not proposed in the current restructuring legislation in New Jersey.

It’s clear that with changes in corporate structure come changes in behavior, all of which is shaped by the unique market conditions of the state. Understanding the impact that the proposed restructuring may have on New Jersey’s health insurance market is essential to making an informed decision that prioritizes quality and affordable health care for all New Jerseyans.

Recommendation 3: Demonstrate a Commitment to the Public and Horizon’s Charitable Mission

In its current form, Horizon has a charitable mission which, according to S3218/A5119, would remain the case after restructuring — but more can be done to affirm Horizon’s commitment to the public good. Because the state Attorney General (AG) has jurisdiction over charitable organizations, clear and publicly available guidance from the AG’s office on whether Horizon would be able to adhere to their charitable mission under a new structure would be welcomed, as it would help ensure Horizon’s commitment to the public is vigorously protected. Additionally, the public’s voice should be brought to the forefront in the legislative process. Holding more hearings with adequate notification to receive input from the public, as well as committing a position on the new mutual holding company’s board to a representative of consumer voices, would show that the commitment to the charitable mission is not solely in word, but in deed.

This is a Complex Bill That Should Not be Fast-Tracked

Rarely has it paid off for lawmakers to rush through a bill where crucial details are not fully understood. Mistakes made with the three-month budget bill highlight that haste can lead to regrets. Lawmakers should demand a full picture of the impact of this legislation before committing to changes that will affect the state’s budget and access to health insurance for all New Jerseyans for years to come.

GetCoveredNJ: How New Jersey’s State-Based Exchange Will Make Health Coverage More Affordable

Health coverage for all New Jerseyans is essential for protecting public health, especially during a global health crisis. The COVID-19 pandemic — along with the ongoing attempts by the outgoing Trump Administration to derail the Affordable Care Act (ACA) — have put all residents at risk. In an important move towards building a health system that better addresses the needs of New Jersey residents, the state opened its own state-based health exchange (SBE) on November 1, 2020.

The state-based exchange will help to increase access to, and affordability of, health insurance, particularly for low-income residents who, due to decades of discriminatory policies, are disproportionately Black and Latinx. By improving the state’s ability to address racial equity in health and meet the demands of an increasingly expensive health care landscape, the exchange promises to increase coverage rates and better protect public health in the Garden State. This explainer answers frequently asked questions about this new state-based health exchange.


What is a state-based health exchange (SBE)?

A state-based health exchange (SBE) is a platform that offers residents health insurance coverage options while promoting competition among insurance companies, which can lower costs.[1] For residents of New Jersey, the SBE will take the place of the federal Marketplace, HealthCare.gov. This new “Marketplace” allows individuals and families to compare and purchase coverage plans that best support their needs.[2] It also allows those who qualify to get financial support for health insurance from the state or federal government.[3] New Jersey’s new SBE opened for enrollment on November 1, 2020; the enrollment period is open until January 31, 2021.

The advantage of a SBE over the federal HealthCare.gov exchange is that the state controls all aspects of the Marketplace, from creating and managing its own website for the exchange, to advertising, setting the enrollment period, and determining eligibility for financial support. These moves should also help make coverage more affordable, allow for greater engagement with potential enrollees, and make the system easier to use.

With a SBE, the state is able to tailor the exchange to the unique needs of New Jersey residents, particularly for low-income communities and people of color who have struggled to enroll or afford coverage in previous years. Other states’ experiences with SBEs have shown that, with adequate funding and personnel support, SBEs can better offer personalized assistance and build confidence in the exchange. They can help people feel better protected from the risks of information sharing with federal agencies during times of uncertainty and attacks on immigrant populations from the federal government.[4] In using these strategies, SBEs in other states have successfully reduced their uninsured rates and seen higher rates of insurance amongst younger enrollees.[5]

For the 2021 plan year, New Jersey joins 13 states and the District of Columbia with SBEs, including a number of regional neighbors, such as Pennsylvania, New York, Connecticut, and Maryland.[6]

How does the state-based exchange improve coverage options for New Jersey residents?

Beginning with the 2021 plan year, New Jersey is offering expanded support and financial assistance to make it easier for residents to enroll in coverage. With continued focus on these efforts, the state can continue to improve health care access and affordability for all Garden State residents.

The new SBE will improve health coverage options by:

Expanding the Enrollment Period
New Jersey residents will have double the amount of time to shop for an insurance plan on the exchange compared to people in states using the federal exchange.[7] The state’s enrollment period this year runs from November 1, 2020 through January 31, 2021.[8] This extended opportunity to enroll in coverage will give residents more time to explore their options and choose an appropriate option that best fits their needs. For coverage that begins on January 1, 2021, residents must sign up by December 31, 2020.[9]

Providing Additional Navigator Program Assistance
The Navigator program is a part of the ACA that is designed to help people learn about the exchange and enroll in a plan appropriate for them. Navigators act as liaisons within communities, helping residents understand the exchange website, explore their plan options, and complete eligibility and enrollment forms. Navigators have been shown to be effective in increasing insurance coverage rates and successfully connecting diverse populations.[10]

Over the years, federal funding for the Navigator program has been drastically cut, hurting access and enrollment.[11]Once a state adopts a SBE, it is responsible for funding the program, allowing for greater investment even when federal funding is cut. With the New Jersey state exchange, the state dedicated $3.5 million for 16 organizations across the state to serve as Navigators for the 2021 plan year.[12] This is an increase of $1.5 million over the amount that the state dedicated for the 2020 plan year and is about nine times greater than the $400,000 that New Jersey received when still using a federally-facilitated exchange for the 2019 plan year.[13] The increased funding will be essential to the exchange’s success and to increasing coverage for residents across the state.

Providing Additional Financial Assistance
With the passage of the state exchange in July 2020, New Jersey replaced the recently repealed federal health insurance assessment with one at the state level.[14] This fee on health insurance companies provides funding for a new state-level subsidy on the SBE.[15] This means that, in addition to the federal financial assistance provided through the exchange (known as the Advanced Premium Tax Credit, or APTC), enrollees with incomes below 400 percent of the federal poverty level may also receive additional assistance with their monthly payments. 

Keeping Costs Under Control
States that run their own SBEs are better able to curb premium increases and control costs for their enrollees.[16] Having also established a reinsurance program — which provides payments to health insurers to help mitigate the costs of large claims — additional state subsidies, and regulation of short-term plans, New Jersey can better improve cost control with the SBE and further dampen rising prices for coverage.[17] Without having to pay the user fees for utilizing the federal platform and by shifting the exchange to a more uniquely New Jersey consumer-oriented approach, there remains an opportunity for further improvements in the Marketplace mirroring those seen in other states with SBEs.[18]

How is New Jersey’s new exchange different from the old exchange?

From 2014 to 2019, New Jersey used a federally-facilitated exchange (FFE).[19] Under a FFE, the U.S. Department of Health and Human Services (HHS) handles all Marketplace functions — such as advertising, certifying health plans that meet the required standards for guaranteed coverage (including covering women’s preventative health care, like mammograms), managing enrollment, and determining eligibility — through HealthCare.gov. When using this option, the federal government also collects user fees from states for their services in running HealthCare.gov and managing the Marketplace.[20] Essentially, the Garden State relied on the federal government to provide “one-size-fits-all” health coverage options.

For the 2020 plan year, New Jersey then transitioned to a state-based exchange on a federal platform (SBE-FP) before fully transitioning to a SBE. Under a SBE-FP, the state government manages Marketplace functions except for eligibility determination and enrollment, which is still done through the HealthCare.gov platform by HHS. The federal government continued to collect user fees for these services.

From the 2021 plan year forward, New Jersey is using a SBE, which does not require user fees paid to the federal government because it does not use the HealthCare.gov platform. Overall, for the 2021 plan year, 30 states are using federally-facilitated exchanges, 6 states are using SBE-FPs, and 14 states are using SBEs.[21]

Who will benefit from coverage through the state-based exchange?

There are hundreds of thousands of uninsured New Jersey residents who stand to benefit from a SBE.[22] Most of these residents are likely eligible for health coverage plans under the SBE, as well as for the new financial assistance programs in the SBE.[23]

With additional financial support opportunities through new state subsidies, increased funding for the Navigator program which helps people understand their options and enroll, an extended enrollment period, and future options for expanding eligibility, the SBE will be more accessible than New Jersey’s previous exchanges for residents with low incomes and those who may need additional outreach to help them know about and understand the exchange.

Black and Latinx residents, as well as young adults, make up the largest number of people who may currently be eligible for Marketplace coverage but who have not obtained coverage through the earlier exchanges. This may be due to a lack of knowledge about the exchange or due to inability to afford coverage even after federal financial assistance. Given the expanded benefits of the SBE that will help to address these issues, people of color with low incomes in New Jersey will see the greatest benefits and have the greatest potential for increases in coverage as a group. Additionally, residents who have enrolled in coverage through the exchanges in previous years will gain access to the new state financial assistance and the extended enrollment period.

During the 2020 plan year’s Open Enrollment Period (OEP), about 246,400 individuals purchased plans on the state exchange through the federal platform (SBE-FP) that New Jersey utilized at that time. Of those enrolling in plans, the majority of people were between the ages of 45 and 64, and white. This indicates an ineffectiveness of previous exchange types to enroll younger working adults, a key demographic that is often more difficult to get covered due to cost barriers and perceptions of not “needing” coverage.[24] In 2019, over 390,000, or over 56 percent of the uninsured population, were adults between the ages 19 and 44.[25] With only 40 percent of the enrollees in last year’s exchange representing these age groups, there remains a need for further affordability, outreach, and enrollment efforts.

Also worryingly, Black residents were noticeably underrepresented in previous exchanges, only making up 5 percent of enrollees during the 2020 plan year Open Enrollment Period, while representing 16 percent of New Jersey’s uninsured population. Similarly, Latinx residents are underrepresented, making up only 14 percent of enrollees while representing nearly 50 percent of New Jersey’s uninsured population. While some of the uninsured may be undocumented or qualify for other programs, like NJ FamilyCare, the low rates of enrollment indicate a need for improvement in outreach efforts for communities of color. 

Further, people with low incomes would benefit from the exchange, as many who are uninsured will qualify for subsidized coverage. In 2019, approximately 68 percent of uninsured individuals in New Jersey had incomes that qualified them for subsidies (between 139% and 400% FPL, or between $17,609 and $51,040 for an individual, and between $29,974 and $86,880 for a family of three).[26] Latinx residents are the most represented amongst this group. Based only on income eligibility among uninsured residents (notably, not considering documented status), people of color, and particularly Latinx residents, would see the largest increases in coverage if all who qualified enrolled through the exchange.

 Further, people with low-incomes would benefit from the exchange, as many who are uninsured will qualify for subsidized coverage. In 2019, approximately 68 percent of uninsured individuals in New Jersey had incomes that qualified them for subsidies (between 139% and 400% FPL, or between $17,609 and $51,040 for an individual, and between $29,974 and $86,880 for a family of three).[27] Latinx residents are the most represented amongst this group. Based only on income eligibility among uninsured residents (notably, not considering documented status), people of color, and particularly Latinx residents, would see the largest increases in coverage if all who qualified enrolled through the exchange. 

Who can buy coverage on a state-based exchange?

Currently, in order to buy insurance on the SBE, a person must be a U.S. citizen, a national with primary residence in New Jersey, or a documented immigrant for the entire time covered by the health insurance plan.[28] Incarcerated individuals and residents with affordable health insurance coverage available through other means, such as through employment, a spouse’s employment, Medicare, Medicaid, or the Children’s Health Insurance Program (CHIP), cannot purchase coverage through the SBE.[29]

While undocumented residents cannot purchase coverage through the exchange, certain members of a mixed status household can; this means that, in mixed status households where members have different immigration or citizenship status, a child or spouse may be eligible to enroll even when one or both parents or other members cannot because they have other coverage or are undocumented.[30]

A state does have the power to submit waivers to the federal government to expand eligibility to undocumented residents within the state’s exchange. These waivers are known as 1332 State Innovation Waivers, and they have to be approved by the Centers for Medicare and Medicaid Services (CMS) to take effect. New Jersey does not currently have this in place, but will have the option to submit waiver applications for this purpose in future plan years.

What other options do New Jerseyans have to enroll in health insurance coverage?

 The exchange website provides information about eligibility not only for potential financial assistance on the exchange, but also for the state’s other health insurance programs outside the exchange, including NJ FamilyCare, the state’s Medicaid program.

In order to check eligibility for financial support on the exchange, New Jersey residents can visit GetCoveredNJ (https://nj.gov/getcoverednj/). On the site, consumers can compare potential financial assistance by entering information such as ZIP code, birthdate, income, and information on spouses or dependents. If a person is determined to be eligible to purchase a plan, they can then complete a full application and browse the options for purchase. These options provide information on coverage and final monthly cost after federal and state financial assistance has been taken into account. A plan for 2021 must be purchased by January 31, but Special Enrollment Periods (SEPs) — or times at which a person may become eligible to purchase during the year due to changes in employment and other reasons for loss of coverage — are available throughout the year.

In addition to the plans and subsidies offered on the SBE, New Jersey residents may qualify for NJ FamilyCare (http://www.njfamilycare.org/). This program has served as an important buffer during the COVID-19 pandemic for many who lost employer-based coverage during the public health crisis.[31] When checking eligibility on GetCoveredNJ, the site will tell individuals whether they may qualify for the NJ FamilyCare program for low-cost coverage.

The combination of the new SBE and NJ FamilyCare provides opportunities for more New Jerseyans to gain affordable health insurance coverage. As COVID-19 continues to ravage the country, lawmakers need to continue to support and expand these programs to guarantee the best health outcomes for all New Jerseyans.

How can state lawmakers further strengthen the state exchange?

 New Jersey lawmakers still have opportunities to strengthen the state exchange by addressing challenges faced in other states implementing SBEs. Major challenges for SBEs in other states have resulted from: a lack of sufficient funding; ineffective communication about the SBE; technological difficulties; limitations on eligibility; and an unstable political environment surrounding the ACA. In learning from these lessons, New Jersey can better address issues of racial inequities and discouragement amongst uninsured residents most in need of affordable coverage.

Some of the key recommendations include:

Expand Eligibility
The SBE does not currently address the need for coverage options for undocumented residents living in New Jersey. Approximately 225,000 New Jerseyans live in households with at least one person filing taxes using an Individual Taxpayer Identification Number (ITIN).[32] These numbers are issued to those who are ineligible for a Social Security Number, including undocumented immigrants, as well as to those with certain other documented statuses, such as spouses and children of those on an employment visa. While not all ITIN filers or their family members are undocumented, it is estimated that a significant number are.[33] Additionally, not all undocumented individuals have ITINs, expanding the number of people affected by the narrow eligibility policies guiding ACA exchanges. Extending coverage options to undocumented individuals, and further ensuring that those living in households with undocumented individuals are confident in gaining coverage, is essential for increasing New Jersey’s coverage rate and protecting public health.[34]

Prioritize Programs that Address Language Barriers and Outreach
The GetCoveredNJ website is offered in both English and Spanish, with additional assistance available in other languages commonly spoken in New Jersey (such as Chinese, Portuguese, Italian, Tagalog, Korean, Gujarati, Polish, Hindi, and Arabic).[35] A key part of outreach and making sure that residents are getting enrolled will be to ensure that the resources available are meaningfully translated and easily accessible for those residents.[36] If the translations are technically accurate but use jargon or vocabulary that is not used conversationally in a language, the effectiveness of the materials can be weakened. Making sure to include feedback from native speakers will help to address these issues.

Make the Exchange More Easily Accessible for Those with Seasonal or Inconsistent Income
Another challenge of the exchanges lies in ensuring ease of eligibility determination and enrollment for individuals and families that may have inconsistent or seasonal income. People with low incomes often face the challenge of “churning,” or the involuntary movement between coverage systems. This can be especially problematic for people whose incomes qualify them for Medicaid, but with temporary boosts in income, such as those from seasonal or gig work, may find themselves with income that qualifies them for Marketplace coverage instead.[37] This movement between coverage options can lead to periods of interrupted coverage and worsening health outcomes.[38] Additionally, the enrollment forms can prove confusing for those whose income is not consistent or easily predicted for the year. Ensuring that enrollment forms are clear and provide detailed instructions for people with seasonal or inconsistent income on how to complete them is important for getting and keeping those individuals covered. Additionally, finding ways to move people more easily between exchanges and Medicaid when their eligibility changes will help to address this issue.

Anticipate and Plan for Technological Difficulties
When other states opened their SBEs, the experiences and smoothness of the rollout varied. Much of this depended on how much state authorities anticipated difficulties for consumers and sought to address them early and quickly. Extensive testing of and improvements to the website, as well as channels for customer feedback and clear communication when there is an issue needing to be addressed, were key for those states that were successful.

Additionally, ensuring that a clearly-marked “no wrong door” enrollment and eligibility system is in place will help to lessen the technological difficulties faced by people seeking to enroll in coverage.[39] A user-friendly and non-repetitive application structure without bias toward a particular program on the exchange website can ease enrollment into the appropriate coverage option, whether it is the Marketplace, NJ FamilyCare, Medicare, or another program. Without creating these easy-to-use application channels, consumers can become frustrated or confused and leave the enrollment process even when they are eligible for affordable coverage.[40] 

Safeguard Against the Possibility of ACA Overturn
The future of New Jersey’s SBE is under threat by the ongoing efforts to have the U.S. Supreme Court (SCOTUS) overturn the ACA, as it would deem that everything included in the law, including the model for the exchanges, unconstitutional.[41] If the ACA is overturned, state lawmakers would have to pass a law that re-establishes the guidelines for the state-based exchange in order to continue offering plans in this manner. This could create instability in the insurance Marketplace and leave hundreds of thousands of New Jerseyans stranded without coverage. While New Jersey has already passed laws at the state level on many of the protective aspects of the ACA, such the guarantee for coverage for those with pre-existing conditions and a child’s ability to stay on a parent’s plan until age 26, a plan for the continuation of the exchange at the state level if the ACA is overturned is advisable.


End Notes

[1] National Academy of Social Insurance (2011). “Designing an Exchange:  A Toolkit for State Policymakers.” January 2011. Online: https://www.nasi.org/sites/default/files/research/Designing%20an%20Exchange_A%20Toolkit%20for%20State%20Policymakers.pdf

[2] Sometimes, “Marketplace” is used in place of “health exchange,” with the resulting term being “State-Based Marketplace,” or SBM. In this report, I chose to use “State-Based Exchange” (SBE) because this keeps the terminology consistent with the language used by the New Jersey state government. Additionally: small businesses cannot buy plans directly through New Jersey’s GetCoveredNJ. Instead, small group employers can shop for plans through the Small Business Options Program (SHOP), which is required by the ACA to be set up alongside the exchange. More information can be found here: https://nj.gov/getcoverednj/findanswers/faqs/smallemployer.shtml. Additionally, discussion of SHOP markets and their relation to SBEs can be found at:  Haase, Leif Wellington, David Chase, and Tim Gaudette (2017). “Talking SHOP: Revisiting the Small-Business Marketplaces in California and Colorado.” The Commonwealth Fund. 18 July 2017. Online: https://www.commonwealthfund.org/publications/fund-reports/2017/jul/talking-shop-revisiting-small-business-Marketplaces-california 

[3] A person’s financial assistance will differ depending on income, number of household members, and location of residency. Additionally, the amount a person pays per month will depend on the plan they choose. Plans are divided into “metals”: Bronze, Silver, Gold, and Platinum. These differ in the way that they split the costs, with Bronze plans having the lowest monthly premiums but the highest costs at the point of service, and Platinum plans having the highest monthly premiums with the lowests costs at the point of service. For more information, see: HealthCare.Gov (2020). “How to pick a health insurance plan: The ‘metal’ categories: Bronze, Silver, Gold & Platinum.” Online: https://www.healthcare.gov/choose-a-plan/plans-categories/

[4] Anderson, Karen M. and Steve Olson (2015). “Chapter 2: The Potential of the ACA to Reduce Health Disparities.” Roundtable on the Promotion of Health Equity and the Elimination of Health Disparities; Board on Population Health and Public Health Practice. Institute of Medicine; National Academies of Sciences, Engineering, and Medicine. Washington DC: National Academies Press; Schwab, Rachel and Sabrina Corlette (2019). “ACA Marketplace Open Enrollment Numbers Reveal the Impact of State-Level Policy and Operational Choices on Performance.” The Commonwealth Fund. 16 April 2019. Online: https://www.commonwealthfund.org/blog/2019/aca-Marketplace-open-enrollment-numbers-reveal-impact

[5] National Academy for State Health Policy (2019). “State-based Health Insurance Marketplace Performance.” September 2019. Online:https://www.nashp.org/wp-content/uploads/2019/09/SBM-slides-final_SeptMtgs-9_23_2019.pdf

[6] Kaiser Family Foundation (2020). “State Health Insurance Marketplace Types, 2021.” Online: https://www.kff.org/health-reform/state-indicator/state-health-insurance-Marketplace-types

[7] One policy that may be implemented under a potential Biden administration could be an expansion of the open enrollment period on the federal exchanges as well.

[8] GetCoveredNJ (2020). “What to Expect.” Online: https://nj.gov/getcoverednj/getstarted/expect/index.shtml

[9] GetCoveredNJ (2020). “About Us.” Online: https://nj.gov/getcoverednj/help/about/

[10] Texas Health Institute (2016). “Advancing Health Equity in the Health Insurance Marketplace: Results from Connecticut’s Marketplace Health Equity Assessment Tool (M-HEAT).” October 2016. Online: https://www.texashealthinstitute.org/uploads/1/3/5/3/13535548/connecticut_m-heat_final_report_-_october_2016.pdf

[11] For 2021, the Trump administration has dedicated only $10 million in total for all of the FFE states. Some states received no funding. Pollitz, Karen and Jennifer Tolbert (2020). “Data Note: Limited Navigator Funding for Federal Marketplace States.” Kaiser Family Foundation. 13 October 2020. Online: https://www.kff.org/private-insurance/issue-brief/data-note-further-reductions-in-navigator-funding-for-federal-Marketplace-states/

[12] Office of Governor Phil Murphy (2020). “Murphy Administration Announces $3.5 Million Investment in State Navigators to Assist Uninsured and Underserved New Jerseyans With ACA Health Insurance Enrollment.” 16 September 2020. Online: https://nj.gov/governor/news/news/562020/approved/20200916a.shtml

[13] Office of Governor Phil Murphy (2019). “ICYMI: New Jersey Will Provide $2 Million in Navigator Grants & Outreach Funding to Assist New Jerseyans with ACA Enrollment.” 3 October 2019. Online: https://www.nj.gov/governor/news/news/562019/20191003b.shtml; Pollitz, Karen, Jennifer Tolbert, and Maria Diaz (2018). “Data Note: Further Reductions in Navigator

Funding for Federal Marketplace States.” Kaiser Family Foundation. September 2018. Online: http://files.kff.org/attachment/Data-Note-Further-Reductions-in-Navigator-Funding-for-Federal-Marketplace-States; Stainton, Lilo H. (2017). “NJ Loses Federal Funding to Expand ACA Enrollment.” NJ Spotlight. 12 October 2017. Online: https://www.njspotlight.com/2017/10/17-10-11-nj-loses-federal-funding-to-expand-aca-enrollment/

[14] Office of Governor Phil Murphy (2020). “Governor Murphy Signs Legislation to Restore a Key Provision of the Affordable Care Act and Lower the Cost of Health Care in New Jersey.” 31 July 2020. Online: https://nj.gov/governor/news/news/562020/approved/20200731a.shtml

[15] Holom-Trundy, Brittany (2020). “New Jersey Can Act Now to Make Health Care More Affordable: The Health Insurance Assessment Explained.” New Jersey Policy Perspective. 13 July 2020. Online: https://www.njpp.org/publications/explainer/new-jersey-can-act-now-to-make-health-care-more-affordable-the-health-insurance-assessment-explained/

[16] National Academy for State Health Policy (2019). “State-based Health Insurance Marketplace Performance.” September 2019. Online: https://www.nashp.org/wp-content/uploads/2019/09/SBM-slides-final_SeptMtgs-9_23_2019.pdf

[17] Lueck, Sarah (2019). “Reinsurance Basics: Considerations as States Look to Reduce Private Market Premiums.” Center on Budget and Policy Priorities. 3 April 2019. Online: https://www.cbpp.org/research/health/reinsurance-basics-considerations-as-states-look-to-reduce-private-market-premiums

[18] Corlette, Sabrina, Kevin Lucia, Katie Keith, and Olivia Hoppe (2019). “States Seek Greater Control, Cost-Savings by Converting to State-Based Marketplaces.” Urban Institute. 10 October 2019. Online: https://www.rwjf.org/en/library/research/2019/10/states-seek-greater-control-cost-savings-by-converting-to-state-based-Marketplaces.html.

[19] Kaiser Family Foundation (2020). State Health Insurance Marketplace Types, 2021. Online: https://www.kff.org/health-reform/state-indicator/state-health-insurance-Marketplace-types/

[20] Schwab, Rachel and JoAnn Volk (2019). “States Looking to Run Their Own Health Insurance Marketplace See Opportunity for Funding, Flexibility.” The Commonwealth Fund. 28 June 2019. Online: https://www.commonwealthfund.org/blog/2019/states-looking-to-run-their-own-health-insurance-Marketplace-see-opportunity.

[21] Kaiser Family Foundation (2020). “State Health Insurance Marketplace Types, 2021.” Online: https://www.kff.org/health-reform/state-indicator/state-health-insurance-Marketplace-types

[22]  NJPP analysis of U.S. Census Bureau data. U.S. Census Bureau (2020). American Community Survey, 2019 1-Year Estimates. Online: http://www.data.census.gov.

[23] Ibid.

[24] Munira Z. Gunja, Gabriella N. Aboulafia, and Sara R. Collins (2019). “What Young Adults Should Know About Open Enrollment.” The Commonwealth Fund. 31 October 2019. Online: https://www.commonwealthfund.org/blog/2019/what-young-adults-should-know-about-open-enrollment

[25] NJPP analysis of U.S. Census Bureau data. U.S. Census Bureau (2020). American Community Survey, 2019 1-Year Estimates. Online: http://www.data.census.gov.

[26] NJPP analysis of U.S. Census Bureau data. U.S. Census Bureau (2020). American Community Survey, 2019 1-Year Estimates. Online: http://www.data.census.gov. Official Federal Poverty Level (FPL) guidelines for 2020 can be found through the U.S. Department of Health and Human Services at: https://aspe.hhs.gov/system/files/aspe-files/107166/2020-percentage-poverty-tool.pdf

[27] NJPP analysis of U.S. Census Bureau data. U.S. Census Bureau (2020). American Community Survey, 2019 1-Year Estimates. Online: http://www.data.census.gov. Official Federal Poverty Level (FPL) guidelines for 2020 can be found through the U.S. Department of Health and Human Services at: https://aspe.hhs.gov/system/files/aspe-files/107166/2020-percentage-poverty-tool.pdf

[28] Norris, Louise (2020). “How immigrants can obtain health coverage.” Healthinsurance.org. 18 May 2020. Online: https://www.healthinsurance.org/obamacare/how-immigrants-are-getting-health-coverage/

[29] In 2021, the Internal Revenue Service (IRS) defines “affordable” coverage as coverage that requires an employee to contribute less than 9.83% of household income. See: Norris, Louise (2020). “Is the IRS changing how much I’ll have to pay for my health insurance next year?” Healthinsurance.org. 15 August 2020. Online: https://www.healthinsurance.org/faqs/is-the-irs-saying-ill-have-to-pay-more-for-my-health-insurance-next-year/

[30] Kaiser Family Foundation (2020). “FAQ: Can family members in families with mixed immigration status, where some family members are citizens or lawfully present and others are undocumented, enroll in Medicaid or CHIP or receive help buying coverage through the Marketplaces?” Online: https://www.kff.org/faqs/faqs-health-insurance-Marketplace-and-the-aca/can-family-members-in-families-with-mixed-immigration-status-where-some-family-members-are-citizens-or-lawfully-present-and-others-are-undocumented-enroll-in-medicaid-or-chip-or-receive-help-buying/

[31] Holom-Trundy, Brittany (2020). “COVID-19 Job Loss Leaves More Than 100,000 New Jerseyans Uninsured.” New Jersey Policy Perspective. 6 August 2020. Online: https://www.njpp.org/publications/blog-category/covid-19-job-loss-leaves-more-than-100000-new-jerseyans-uninsured/

[32] Institute on Taxation and Economic Policy (2020). “Analysis: How the HEROES Act Would Reach ITIN Filers.” 14 May 2020. Online: https://itep.org/analysis-how-the-heroes-act-would-reach-itin-filers/; Kapahi, Vineeta (2020). “Building a More Immigrant Inclusive Tax Code: Expanding the EITC to ITIN Filers.” New Jersey Policy Perspective. 15 June 2020. Online: https://www.njpp.org/publications/report/building-a-more-immigrant-inclusive-tax-code-expanding-the-eitc-to-itin-filers/

[33] Kolker, Abigail (2020). “Noncitizens and Eligibility for the 2020 Recovery Rebates.” Congressional Research Service. 1 May 2020). Online: https://crsreports.congress.gov/product/pdf/IN/IN11376

[34] Other states have recognized this same dilemma for undocumented residents and begun taking steps to expand eligibility. For example, California sought to expand coverage through a waiver in 2016, but subsequently withdrew their application when the Trump Administration came into office due to their administration’s anti-immigrantion stance. It is anticipated that these types of efforts to expand eligibility will continue, and New Jersey will be able to learn from the experiences of other states in this process. For information on California’s effort, see Ibarra, Ana B. and Chad Terhune (2017). “California Withdraws Bid To Allow Undocumented To Buy Unsubsidized Plans.” Kaiser Health News. 20 January 2017. Online: https://khn.org/news/california-withdraws-bid-to-allow-undocumented-immigrants-to-buy-unsubsidized-obamacare-plans/

[35] New Jersey Department of Transportation (2012). “NJ Population by Language Spoken.” Online: https://www.state.nj.us/transportation/business/civilrights/pdf/map_language.pdf

[36] Texas Health Institute (2016). “Advancing Health Equity in the Health Insurance Marketplace: Results from Connecticut’s Marketplace Health Equity Assessment Tool (M-HEAT).” October 2016. Online: https://www.texashealthinstitute.org/uploads/1/3/5/3/13535548/connecticut_m-heat_final_report_-_october_2016.pdf

[37] Bergal, Jenni (2014). “Millions Of Lower-Income People Expected To Shift Between Exchanges And Medicaid.” Kaiser Health News. 6 January 2014. Online: https://khn.org/news/low-income-health-insurance-churn-medicaid-exchange/

[38] Hancock, Jay (2017). “Churning, Confusion And Disruption — The Dark Side Of Marketplace Coverage.” Kaiser Health News. 7 December 2017. Online: https://khn.org/news/churning-confusion-and-disruption-the-dark-side-of-Marketplace-coverage/

[39] Lueck, Sarah (2020). “Adopting a State-Based Health Insurance Marketplace Poses Risks and Challenges.” Center on Budget and Policy Priorities. 6 February 2020. Online: https://www.cbpp.org/research/health/adopting-a-state-based-health-insurance-Marketplace-poses-risks-and-challenges

[40] Sprung, Andrew (2020). “Op-Ed: NJ’s new state-run health insurance exchange must learn from the mistakes of others.” NJ Spotlight. 23 October 2020. Online: https://www.njspotlight.com/2020/10/op-ed-njs-new-state-run-health-insurance-exchange-must-learn-from-the-mistakes-of-others/

[41] The case currently being considered that threatens this is Texas v. California. More information about this case can be found on the SCOTUSblog here: https://www.scotusblog.com/case-files/cases/texas-v-california/

Unprecedented and Unequal: Racial Inequities in the COVID-19 Pandemic

Published on Oct 14, 2020 in COVID-19, Health

Health disparities in the COVID-19 pandemic spotlight the long-standing inequities that permeate the health care system. Though the pandemic has been undeniably devastating throughout the country, the impact on Black and Latinx communities outpaces that on other populations.[i] Nationally, Black and Latinx residents have been three times more likely than white residents to contract COVID-19 and nearly twice as likely to die from it.[ii] These patterns are also reflected at the state level. This report examines racial disparities in New Jersey throughout the COVID-19 pandemic and suggests policy solutions to alleviate these problems and build more equitable conditions for the future.

Black and Latinx Cases, Hospitalization Rates, and Mortality Rates Outpace Others

The Garden State’s population, while increasingly diverse, still sees the impact of structural racism in its housing and occupational divides.[iii] Past redlining practices have resulted in the segregation of neighborhoods and schools, with many Black and Latinx families living in densely populated metro areas with segregated school districts.[iv] Residents of color make up over half of employees in essential, or “frontline” industries, including grocery stores and pharmacies; trucking, warehouse, and postal services; cleaning services; public transportation; health care; and child care and social services.[v] These vulnerabilities, in addition to the need for many to commute into New York City or Philadelphia for work, put these residents at greater risk for exposure to the virus. The results of that structural risk are seen in the data, with Black and Latinx populations disproportionately represented in COVID-19 case, hospitalization, and mortality rates.

Age-adjusted case, hospitalization, and mortality rates also show that New Jersey’s Black and Latinx residents have suffered directly from the disease at double to triple the rates of the state’s white and Asian residents.[vi] Due to poor socioeconomic conditions and systemic racism in the health care system, Black and Latinx communities often die at younger ages and have proportionally more young residents than white populations. This means that, amongst the elderly, there are regularly more white than Black or Latinx individuals. The elderly are the most vulnerable age group to COVID-19, which is a possible reason that the white death rate is proportionally higher than the case rate — because there are more white, as opposed to Black or Latinx, elderly residents to suffer from age vulnerability. However, Black and Latinx residents are more likely to contract, be hospitalized, and die from COVID-19 than white residents of the same age group. The age-adjusted rates, then, allow us to better compare relatively incomparable populations, by assessing what the rates would look like if the age structures (proportion in each age group) of these populations were the same. In the case of New Jersey, this shows that Black and Latinx residents have been significantly more likely to suffer from COVID-19 in every way than white or Asian residents.

The state data remains consistent with patterns seen at the national level. In the COVIDView Surveillance Summary published weekly by the Centers for Disease Control and Prevention, nationally reported hospitalization rates amongst Latinx, Black, and American Indian or Alaska Native residents are higher than those of white residents in every age group. The highest rates by age group in the national data range from 3.7 (for non-Latinx Black residents, age 65+) to 8.2 (for Latinx residents, ages 18-49 years old) times those of white residents for that age group.[vii]

Black and Latinx people are more likely to contract COVID-19 than would be expected based on their representation in most counties. Black residents have been particularly overrepresented amongst cases in Atlantic, Burlington, Camden, Essex, Gloucester, Mercer, Somerset, and Union Counties. This means that, even in places where the outbreak and surge began later and general protective measures were already put in place when the disease arrived, residents of color were still more vulnerable than others; their high numbers of deaths and cases were not just due to initial outbreak conditions. In Salem County, for example, Latinx residents made up approximately 40 percent of cases by the end of May, while only accounting for roughly 9 percent of the county population. This means that Latinx residents are between 4 and 5 times overrepresented in the county case count as compared to their representation in the population.[viii] Like with the state-level data, there is a clear divide between Latinx and Black health outcomes and white and Asian health outcomes.

Addressing racial inequities in health will take more than a quick infusion of money or testing during the public health crisis, however. Success in tackling these inequities will include not only improvements in access and quality in the health care system itself, but improvements in conditions shaped by social determinants of health that exacerbate vulnerabilities to outbreaks, such as inadequate housing,[ix] limited access to nutritious foods,[x] and low-paying jobs in unsafe environments that prove to be essential during historic pandemics.[xi]

The COVID-19 pandemic has highlighted these broader trends in socioeconomic vulnerabilities. Residents of color have seen the greatest unemployment rates throughout the crisis in New Jersey, putting them at greater risk for financial insolvency.[xii] In the Household Pulse Survey from the Census Bureau, Black and Latinx households in New Jersey were approximately three times more likely than white households to report not having enough to eat in the past seven days.[xiii] Black and Latinx residents, as well as residents identifying as multiracial, were more likely to report being behind on rental payments than white or Asian residents: Latinx residents were twice as likely as white residents to report this, while Black and multiracial residents were between 3.5 and 4 times more likely to do so.[xiv] Latinx residents were three times more likely than white residents to report lacking health insurance, in addition to being the most likely residents to experience feelings of nervousness, anxiety, and being on edge.[xv] Black residents were twice as likely as white residents to report lacking health insurance;[xvi] they were also most likely (nearly 1.5 times more likely than white residents) to report both delaying medical care and needing medical care for something other than COVID-19, but not getting it, in the past four weeks.[xvii] As a result, there are dual crises: residents of color have a greater likelihood of contracting the virus due to unhealthy conditions beyond their control, while they also face the devastating impact of the virus on long-term health and finances. This will create even greater inequities of health and well-being outcomes in the post-COVID-19 world.[xviii]

Lack of Adequate Planning and Prevention has Led to Greater Suffering

State and local lawmakers’ efforts to address racial disparities and prevent devastation that exacerbates inequities have been inadequate. New Jersey’s county leaders did not anticipate a pandemic sweeping through the state so violently; only Mercer County identified a pandemic as a hazard of concern in mitigation plans in 2018.[xix] Given this, during the early stages of the crisis, counties were less prepared, hospitals were overwhelmed, and, without known treatments and overflowing hospital beds, providers were required to ration treatments, meaning that patients were more likely to die.[xx]

This lack of preparation was not inevitable. In New Jersey, past disease outbreaks have shown that certain counties and populations are regularly vulnerable to these early stages of epidemics.[xxi] With COVID-19, the first case was identified in Bergen County, near New York City, on March 4, 2020.[xxii] The outbreak quickly spread to the neighboring counties outside of New York City, the same counties that have been vulnerable to outbreaks in the past.[xxiii] Of the state’s seven counties with majority communities of color — that is, counties with over 50 percent of the population identifying as Latinx, Asian, Black, Alaska Native, American Indian, Native Hawaiian or Other Pacific Islander, or another race outside of the white population in the 2019 American Community Survey data (Cumberland, Essex, Hudson, Mercer, Middlesex, Passaic, and Union) —  five (Essex, Hudson, Middlesex, Passaic, and Union) were among those hit the hardest by the pandemic during its early stages.[xxiv] Even within counties, communities of color suffered more than white populations, as access to resources became a determining factor in the number of cases and deaths, creating disparities between neighboring zip codes.[xxv]

This means that the harms of COVID-19 in New Jersey have been two-fold. First, the counties to initially get hit — and therefore, are most vulnerable to a surge beyond their hospitals’ capacities — were largely communities of color, resulting in many cases and deaths among residents of color. Then, in counties not hit by the early surge, Black and Latinx populations have been more vulnerable, likely due to the effects of structural racism that have created unhealthy environments and living conditions, limited access to care, and discrimination in care.[xxvi]

This lack of planning can be seen in health statistics beyond the COVID-19 data. This is because the toll of COVID-19 comes not only from cases related to the disease itself, but also from its consequences. Excess death data, which compares the deaths counted during a specific time period to average deaths during that period in previous years, can help to show a picture of the true impact of an event by accounting for not only deaths directly from COVID, but also those that may have resulted from the indirect effects of the outbreak, such as depression and other mental health challenges due to hardships or an unwillingness or fear of seeking care for other medical issues.[xxvii]

Like with the confirmed cases data, New Jersey’s most diverse communities have significant representation when examining excess deaths. Essex County, in which approximately 70 percent of residents are people of color, saw nearly 1,900 excess deaths at the peak of the pandemic in April 2020, an approximately 400 percent increase over the average April death count for the county.[xxviii] Essex County has also experienced the highest number of deaths overall from COVID-19, counting 1,901 confirmed deaths as of October 7, 2020. Additionally, there have been an estimated 229 probable COVID deaths in the county that have not been confirmed.[xxix]

While Essex County’s number of excess deaths comes close to its number of confirmed and probable COVID-19 deaths, the hundreds of additional deaths included in the data may be unconfirmed deaths due to COVID-19.[xxx] These can result from lack of access to testing, avoidance of or lack of access to care for other medical issues, or “deaths of despair” — deaths due to drugs, suicide, or alcohol — that can be connected to the stress of the COVID-19 pandemic.[xxxi] Amongst communities of color, deaths both directly from COVID-19 and deaths caused indirectly by the pandemic’s conditions are also exacerbated by “weathering,” the effect on health and well-being of living long term with inequitable socioeconomic conditions.[xxxii]

The impact of the COVID-19 pandemic does not end with hospitalizations and deaths, or even with possible unconfirmed deaths or deaths caused indirectly from the pandemic’s conditions. Differences in trust in the medical system across racial groups will cause these disparities to diverge even further. A long history of systematic racism in health care remains fresh for many Black residents, and many still experience this racism today. This has led to a distrust among Black communities, in particular, of doctors, vaccines, and other paths that will be necessary tools in containing the outbreak.[xxxiii] If people most at risk for the virus and long-term damaging effects or death are also more likely than others to either not have access to or to be unwilling to get the vaccine, then disparities will become even greater as the outbreak rages on amongst our most vulnerable populations. The more the virus continues to spread, the more that neighbors, friends, classmates, and co-workers also continue to risk contracting COVID-19, and the worse the long-term economic impact of the pandemic.

The lack of extensive data collection and transparency makes all of the efforts to address issues of inequity and build better preparedness systems more difficult. Lawmakers have been slow to initiate the collection of racial and ethnic data during both COVID-19 and previous public health emergencies, resulting in partial data and a need to try to backtrack in order to add this data to previously collected information.[xxxiv] When data is collected, the categories often used for race and ethnicity, including those used by the New Jersey Department of Health (DOH) cited here, are broad. In being so broad, they do not accurately depict the many varied experiences of residents within each race or Latinx category. They do not, for instance, differentiate between residents identifying as East Asian (such as Japanese) versus South or Southeast Asian (such as Indian). They also do not account for the different experiences of residents who are first-generation immigrants as compared to residents who identify with a racial or ethnic group but have grown up in the United States. This can be an important factor in understanding the full picture of residents’ experiences with racism in the healthcare system and therefore needs to be examined more in-depth than the data currently provides.[xxxv]

Greater Investment in the Future Health of New Jersey is Necessary

Budget choices reveal lawmakers’ values, especially when choices about access to health programs can literally be the difference between life and death. Overall, funding for DOH has significantly decreased over the past 15 years, standing 61 percent lower than its Fiscal Year (FY) 2005 levels. Funding relative to the size of the population has been reduced from $287.62 per resident in FY 2005 to $178.46 per resident in FY 2019.[xxxvi]

Some of this funding decline was due to structural changes, such as the moving of programs outside of DOH. For instance, the Division of Aging (formerly known as Senior Services) — which funds programs like the Pharmaceutical Assistance to the Aged and Disabled (PAAD) and Senior Gold programs that provide prescription drug benefits to low-income seniors and individuals with disabilities — moved to the Department of Human Services (DHS) in FY 2013.[xxxvii] In addition, the state has not increased funding for DOH to reflect increases in New Jersey’s population.

While DHS directs many services related to health (such as Medicaid) and other anti-poverty initiatives that address social determinants of health, the overall decline in direct DOH funding has resulted in diminishing support for many key divisions and programs addressing health inequities. These include the Office of Minority and Multicultural Health as well as the Communicable Disease Service, which are meant to strengthen New Jersey’s health care system and better protect New Jersey residents.

The Office of Minority and Multicultural Health, the mission of which is to “promote health equity for all and reduce health disparities,” has received the same special purpose funding ($1.5 million) from the early 2000s up until the fiscal year 2021 budget, when a slight cut was made in response to the COVID-19 crisis.[xxxviii] Because the funding was maintained at the same dollar amount, the value of those dollars has decreased over the years due to inflation.

Attention given to newer initiatives to address racial disparities, such as the Nurture NJ multi-agency campaign to address New Jersey’s abysmal Black maternal and infant mortality rates, has provided some promise of improvements in the future.[xxxix]These programs cannot be short-lived or one-off promotions, however, to truly impact the long-term health landscape for New Jersey’s populations. In order to both permanently and effectively address racial disparities in health outcomes, New Jersey lawmakers should consider prioritizing the following:

  • Build data collection capacity and transparency.
    Much of the data presented in this brief does not cover all cases, hospitalizations, or deaths. Some only cover around 50 to 60 percent of cases because racial and ethnic data was not directed to be collected until the end of April, a month after Governor Murphy instituted his stay-at-home order.[xl] The need for this data should not have been a surprise — there were many calls for better collection efforts after the 2009 H1N1 outbreak in the United States, which appear to have gone unheeded.[xli] Without data — and particularly data collected on cases, rather than just during hospitalization or post-mortem — it is impossible to determine how to most effectively and efficiently fund and design programs meant to address racial inequities.A federal initiative to regulate these types of actions across states would produce more uniform data and a clearer picture than current efforts, since states have differing practices in both the decisions to collect data and how they collect the data.[xlii] However, until federal-level initiatives are pursued, New Jersey can take its own steps to become a leader in these efforts. Regulations that automatically trigger this data collection during crises and permanent directives to collect this data would move the state forward in better understanding the consequences of outbreaks like COVID-19. Additionally, greater efforts to coordinate and support systematic population health work in the state is needed: New Jersey is currently one of only 15 states without a public health institute or participation in the National Network of Public Health Institutes.[xliii]
  • Require regular state health racial equity impact assessments for policy proposals.
    In addition to greater data transparency during crises, New Jersey should require systematic analysis of the racial impacts of policy proposals. This would both aid in providing a picture of the long-term impact a policy would have on New Jersey’s population, as well as develop a stronger understanding of policy designs that work.[xliv] Having improved data collection efforts, as mentioned in the section above, is crucial for this work.
  • Increase support for initiatives that improve trust in the medical system.
    While cultural competency training will aid in the communication between doctors and patients and therefore should be continued, it does not guarantee overall greater health outcomes unless residents of the at-risk populations come to a medical professional in the first place.[xlv] Programs that work to understand the causes of distrust and identify trusted sources of information can help to create better systems for disseminating facts about medical care and encourage take-up. Increased funding and support for New Jersey’s Office of Minority and Multicultural Health, initially established in 1991, can provide a foundation for these efforts.[xlvi]

  • Encourage policies that diversify the medical field and improve access to culturally sensitive resources.
    While steps have been made in recent years to bring more diversity to medical education and, in turn, the medical field, even more can be done to encourage the building of a medical profession that reflects the population it is serving.[xlvii]Continuing to build programs that provide support for medical professionals who come from vulnerable populations, better encourage practice in areas of greatest need, and remove barriers to providers and services to improve cultural competence of the available resources, will be necessary. New Jersey has recently taken steps in this direction by working to improve access to doula services and removing barriers to professional licenses for immigrant populations.[xlviii] The state should continue in this direction by supporting initiatives focused on greater diversity in the medical field, such as Graduate Medical Education (GME) programs, and by exploring the creation of programs that provide financial support for those serving in areas of critical need.[xlix]
  • Build racial impact results into future public health crisis preparedness plans.
    While the current New Jersey preparedness plan does provide an in-depth look into the possible severity of an outbreak, its economic costs, and environmental and structural factors that may exacerbate certain types of outbreaks, there is no discussion of the fact that certain racial and ethnic groups are more subject to those factors than others, and that the combined impact of the inequities can exacerbate the poor outcomes even further.[l]

Building on these efforts with additional policies that address housing, food insecurity, schooling, workers’ safety, and other areas that impact health will further lessen the inequities in health outcomes that we see in New Jersey. While New Jersey’s challenges in these areas seem daunting, systematic investment in programs that promote equity will lead to healthier lives for all — both during normal times and especially during future health crises.

 


[i] This brief refers to residents who identify as having ethnic roots in Spain or Latin America with the term “Latinx.” While this term is not used by all residents identifying with this ethnicity (see Noe-Bustamante, Luis, Lauren Mora, and Mark Hugo Lopez (2020). “About One-in-Four U.S. Hispanics Have Heard of Latinx, but Just 3% Use It.” Pew Research Center. Online: https://www.pewresearch.org/hispanic/2020/08/11/about-one-in-four-u-s-hispanics-have-heard-of-latinx-but-just-3-use-it/), this term is more inclusive of all populations with this ethnic identity, including those who may not identify as native Spanish speakers. Also, utilizing “Latinx” rather than “Latino” or “Latina” is more gender-inclusive. All of these considerations help to create more inclusivity for the population considered here, something that is particularly important in addressing structural racism in health care, which does not, in many ways, differentiate between a first-generation immigrant and later generations with these familial roots.

[ii] Oppel Jr., Richard A., Robert Gebeloff, K.K. Rebecca Lai, Will Wright, and Mitch Smith (2020). “The Fullest Look Yet at the Racial Inequity of Coronavirus.” New York Times. 5 July 2020. Online: https://www.nytimes.com/interactive/2020/07/05/us/coronavirus-latinos-african-americans-cdc-data.html

[iii] Raychaudhuri, Disha (2020). “N.J. is more diverse than ever. See how your town has changed.” NJ Advance Media for NJ.com. 19 February 2020. Online: https://www.nj.com/data/2020/02/nj-is-more-diverse-than-ever-see-how-your-town-has-changed.html

[iv] Orfield, Gary, Jongyeon Ee, and Ryan Coughlann (2017). “New Jersey’s Segregated Schools: Trends and Paths Forward.” UCLA: The Civil Rights Project. November 2017. Online: https://www.civilrightsproject.ucla.edu/research/k-12-education/integration-and-diversity/new-jerseys-segregated-schools-trends-and-paths-forward/New-Jersey-report-final-110917.pdf?_ga=2.105008256.2029930253.1598600934-536607244.1597420044; Petenko, Erin, and Disha Raychaudhuri (2018). “Why Minorities in N.J. are More Likely to be Denied Mortgages, Explained.” NJ.com. Posted 16 February 2018. Updated 30 January 2019. Online: https://www.nj.com/data/2018/02/modern-day_redlining_how_some_nj_residents_are_bei.html

[v] Center for Economic and Policy Research (2020). “A Basic Demographic Profile of Workers in Frontline Industries.” 7 April 2020. Online: https://cepr.net/a-basic-demographic-profile-of-workers-in-frontline-industries/. State-level data available in linked spreadsheet.

[vi] An important note to make about all this data from the Department of Health is that the categories for race and ethnicity are broad and, in being so broad, do not accurately depict the many varied experiences of residents within each race or Latinx category. This can be an important factor in understanding the full picture of residents’ experiences with racism in the healthcare system and therefore needs to be examined more in-depth than the data currently provides.

[vii] Centers for Disease Control and Prevention (2020). COVIDView. Weekly Summary for Week 39, ending September 26, 2020. Online: https://www.cdc.gov/coronavirus/2019-ncov/covid-data/covidview/index.html. Hospitalization rates for each age group can be found on page 10.

[viii] Salem County’s first confirmed COVID-19 case was reported on March 21, 2020, approximately 17 days after officials confirmed the first case in New Jersey. This was also the day that Governor Murphy announced the state lockdown of all non-essential businesses. See Salem County Department of Health and Human Services (2020). “Salem County Health Department Confirms First Positive Case of Coronavirus.” 21 March 2020. Online: https://health.salemcountynj.gov/salem-county-health-department-confirms-first-positive-case-of-coronavirus/; Erminio, Vinessa (2020). “Coronavirus in New Jersey: A Timeline of the Outbreak.” NJ Advance Media for NJ.com. Last updated on 12 June 2020. Online: https://www.nj.com/coronavirus/2020/03/coronavirus-in-new-jersey-a-timeline-of-the-outbreak.html

[ix] Taylor, Lauren (2018). "Housing and Health: An Overview of the Literature." Health Affairs Health Policy Brief 10. Online: https://www.healthaffairs.org/do/10.1377/hpb20180313.396577/full/

[x] Gundersen, Craig, and James P. Ziliak (2015). "Food Insecurity and Health Outcomes." Health Affairs 34 (11): 1830-1839. Online: https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2015.0645

[xi] McCormack, Grace, Christopher Avery, Ariella Kahn-Lang Spitzer, and Amitabh Chandra (2020). Economic Vulnerability of Households With Essential Workers. JAMA. 2020;324(4):388–390. doi:10.1001/jama.2020.11366. Online: https://jamanetwork.com/journals/jama/fullarticle/2767630; Yearby, Ruqaiijah, and Seema Mohapatra (2020). "Law, Structural Racism, and the COVID-19 Pandemic." Journal of Law and the Biosciences (Forthcoming). No. 2020-8. Online: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3612824

[xii] Kapahi, Vineeta (2020). “Labor Day Snapshot: How New Jersey Can Honor Workers and Improve Economic Security.” New Jersey Policy Perspective. 7 September 2020. Online: https://www.njpp.org/reports/labor-day-snapshot-how-new-jersey-can-honor-workers-and-improve-economic-security

[xiii] U.S. Census Bureau (2020). Week 15 Household Pulse Survey: September 16-28. “Food Table 2b. Food Sufficiency for Households, in the Last 7 Days, by Select Characteristics: New Jersey.” https://www.census.gov/data/tables/2020/demo/hhp/hhp15.html  At the time of writing, this was the most recent release.

[xiv] U.S. Census Bureau (2020). Week 15 Household Pulse Survey: September 16-28. “Housing Table 1b. Last Month’s Payment Status for Renter-Occupied Housing Units, by Select Characteristics: New Jersey” https://www.census.gov/data/tables/2020/demo/hhp/hhp15.html At the time of writing, this was the most recent release.

[xv]  U.S. Census Bureau (2020). Week 15 Household Pulse Survey: September 16-28. “Health Table 3. Current Health Insurance Status, by Select Characteristics: New Jersey” and “Health Table 2a. Symptoms of Anxiety Experienced in the Last 7 days, by Select Characteristics: New Jersey.”https://www.census.gov/data/tables/2020/demo/hhp/hhp15.html At the time of writing, this was the most recent release.

[xvi] U.S. Census Bureau (2020). Week 15 Household Pulse Survey: September 16-28. “Health Table 3. Current Health Insurance Status, by Select Characteristics: New Jersey.” https://www.census.gov/data/tables/2020/demo/hhp/hhp15.html At the time of writing, this was the most recent release.

[xvii] U.S. Census Bureau (2020). Week 15 Household Pulse Survey: September 16-28. “Health Table 1. Coronavirus Pandemic Related Problems with Access to Medical Care, in Last 4 weeks, by Select Characteristics: New Jersey.” https://www.census.gov/data/tables/2020/demo/hhp/hhp15.html At the time of writing, this was the most recent release.

[xviii] Tolbert, Jennifer Kendal Orgera, Natalie Singer, and Anthony Damico (2020). “Communities of Color at Higher Risk for Health and Economic Challenges due to COVID-19.” Kaiser Family Foundation. 7 April 2020. Online: https://www.kff.org/coronavirus-covid-19/issue-brief/communities-of-color-at-higher-risk-for-health-and-economic-challenges-due-to-covid-19/

[xix]   New Jersey Office of Emergency Management (2018). “5.1 Identification of Hazards.” 2019 New Jersey State Hazard Mitigation Plan. Online: http://ready.nj.gov/mitigation/2019-mitigation-plan.shtml Specific chapter: http://ready.nj.gov/mitigation/pdf/2019/mit2019_section5-1_Id_Hazards.pdf. Pg. 5.

[xx] Cavallo, Joseph J., Daniel A. Donoho, and Howard P. Forman (2020). "Hospital Capacity and Operations in the Coronavirus Disease 2019 (COVID-19) Pandemic—Planning for the Nth Patient." In JAMA Health Forum 1 (3): e200345-e200345. American Medical Association. Online: https://jamanetwork.com/channels/health-forum/fullarticle/2763353; Some groups worked to build tools for building better hospital surge capacity as the pandemic developed. See, for example: Abir, Mahshid, Christopher Nelson, Edward W. Chan, Hamad Al-Ibrahim, Christina Cutter, Karishma Patel, and Andy Bogart (2020). “Critical Care Surge Response Strategies for the 2020 COVID-19 Outbreak in the United States.” Santa Monica, CA: RAND Corporation. Online: https://www.rand.org/pubs/research_reports/RRA164-1.html. See also New Jersey’s response to the surge: New Jersey Department of Health (2020). “Allocation of Critical Care Resources During a Public Health Emergency.” 11 April 2020. Online: https://nj.gov/health/legal/covid19/FinalAllocationPolicy4.11.20v2%20.pdf

[xxi] Kaulessar, Ricardo (2018). “100 years ago, Spanish flu pandemic brought dread to New Jersey.” NorthJersey.com. Online: https://www.northjersey.com/story/news/local/2018/10/09/1918-spanish-flu-pandemic-killed-thousands-new-jersey/1222214002/; Influenza Encyclopedia (n.d.) “Newark, New Jersey.” Published by University of Michigan Center for the History of Medicine and Michigan Publishing and University of Michigan Library. Online: https://www.influenzaarchive.org/cities/city-newark.html; New Jersey Office of Emergency Management (2018). “5.21 Pandemic.” 2019 New Jersey State Hazard Mitigation Plan. Online: http://ready.nj.gov/mitigation/2019-mitigation-plan.shtml Specific chapter: http://ready.nj.gov/mitigation/pdf/2019/mit2019_section5-21_Pandemics.pdf

[xxii] Office of Governor Phil Murphy (2020). “Governor Murphy, Acting Governor Oliver, and Commissioner Persichilli Announce First Presumptive Positive Case of Novel Coronavirus in New Jersey.” 4 March 2020. Online: https://www.nj.gov/governor/news/news/562020/20200304e.shtml

[xxiii] Kaulessar, Ricardo (2018). “100 years ago, Spanish flu pandemic brought dread to New Jersey.” NorthJersey.com. Online: https://www.northjersey.com/story/news/local/2018/10/09/1918-spanish-flu-pandemic-killed-thousands-new-jersey/1222214002/; Influenza Encyclopedia (n.d.) “Newark, New Jersey.” Published by University of Michigan Center for the History of Medicine and Michigan Publishing and University of Michigan Library. Online: https://www.influenzaarchive.org/cities/city-newark.html; New Jersey Office of Emergency Management (2018). “5.21 Pandemic.” 2019 New Jersey State Hazard Mitigation Plan. Online: http://ready.nj.gov/mitigation/2019-mitigation-plan.shtml Specific chapter: http://ready.nj.gov/mitigation/pdf/2019/mit2019_section5-21_Pandemics.pdf

[xxiv] NJPP Analysis of New Jersey Department of Health (DOH), Communicable Disease Service - COVID-19 Dashboard data and Census data. DOH data online at: https://covid19.nj.gov/. Estimated population data found through the American Community Survey through the Census Bureau. 2019 1-Year Estimates. Table DP05, Demographic and Housing Estimates. This can be found online at: https://data.census.gov

[xxv] Balcerzak, Ashley and Stacey Barchenger (2020). “COVID-19 in your ZIP code: Race, income can double your chance of getting sick in NJ.” NorthJersey.com. 13 July 2020. Online: https://www.northjersey.com/story/news/coronavirus/2020/07/13/coronavirus-nj-race-income-can-double-your-chance-getting-sick/5404947002/

[xxvi] Rubin-Miller, Lily Christopher Alban, Samantha Artiga, and Sean Sullivan (2020). “COVID-19 Racial Disparities in Testing, Infection, Hospitalization, and Death: Analysis of Epic Patient Data.” Kaiser Family Foundation. 16 September 2020. Online: https://www.kff.org/coronavirus-covid-19/issue-brief/covid-19-racial-disparities-testing-infection-hospitalization-death-analysis-epic-patient-data/

[xxvii] Centers for Disease Control and Prevention (2020). “Excess Deaths Associated with COVID-19.” Online: https://www.cdc.gov/nchs/nvss/vsrr/covid19/excess_deaths.htm

[xxviii] NJPP Analysis of Census Bureau data. American Community Survey, 2019 1-Year Estimates. Table DP05, Demographic and Housing Estimates. Online: https://data.census.gov

[xxix] New Jersey Department of Health, Communicable Disease Service (2020). COVID-19 Dashboard. Online: https://covid19.nj.gov/. Accessed 7 October 2020. Probable deaths are updated every week, with the latest update on 29 September 2020.

[xxx] It is important to note here that the excess deaths data only covers up until July, and so does not total deaths up until October as the COVID deaths update includes. This means that the total will likely go up for the number of excess deaths, though the later months were not the peak months of the pandemic.

[xxxi] Petterson, Steve et al (2020). “Projected Deaths of Despair During the Coronavirus Recession,” Well Being Trust. 8 May 2020. WellBeingTrust.org. Online: https://wellbeingtrust.org/areas-of-focus/policy-and-advocacy/reports/projected-deaths-of-despair-during-covid-19/

[xxxii] Forde, Allana T., Danielle M. Crookes, Shakira F. Suglia, and Ryan T. Demmer (2019). "The weathering hypothesis as an explanation for racial disparities in health: a systematic review." Annals of epidemiology 33: 1-18.

[xxxiii] Gramlich, John and Cary Funk (2020). “Black Americans Face Higher COVID-19 Risks, are More Hesitant to Trust Medical Scientists, Get Vaccinated.” Pew Research Center. 4 June 2020. Online: https://www.pewresearch.org/fact-tank/2020/06/04/black-americans-face-higher-covid-19-risks-are-more-hesitant-to-trust-medical-scientists-get-vaccinated/

[xxxiv] Kim, Soo Rin and Matthew Vann (2020). “Many States Are Reporting Race Data For Only Some COVID-19 Cases And Deaths.” FiveThirtyEight. 7 May 2020. Online: https://fivethirtyeight.com/features/many-states-are-reporting-race-data-for-only-some-covid-19-cases-and-deaths/; National Academy for State Health Policy (2020). “How States Collect Data, Report, and Act on COVID-19 Racial and Ethnic Disparities.” Online: https://www.nashp.org/how-states-report-covid-19-data-by-race-and-ethnicity/

[xxxv] Hummer, Robert A. and Iliya Gutin (2018). "Racial/ethnic and Nativity Disparities in the Health of Older US Men and Women." In Future Directions for the Demography of Aging: Proceedings of a Workshop. Washington, D.C.: The National Academies Press, Washington, DC. Pages 31-66; Enchautegui, María E. (2014). “Immigrant Youth Outcomes: Patterns by Generation and Race and Ethnicity.” Urban Institute. Online: https://www.urban.org/sites/default/files/publication/22991/413239-Immigrant-Youth-Outcomes-Patterns-by-Generation-and-Race-and-Ethnicity.PDF; Teruya, Stacey A. and Shahrzad Bazargan-Hejazi (2013). "The Immigrant and Hispanic Paradoxes: A Systematic Review of Their Predictions and Effects." Hispanic Journal of Behavioral Sciences 35 (4): 486-509.

[xxxvi] Calculated using NJPP analysis of Budget Data and Census Data from 2019 estimates (latest available). Intercensal data tables can be found at: https://www.census.gov/data/tables/time-series/demo/popest/intercensal-2000-2010-state.html. Data estimates for the 2019 population can be found at: https://www.census.gov/quickfacts/NJ. Budget information can be found at: https://www.njleg.state.nj.us/legislativepub/finance.asp

[xxxvii] This is now titled the “Division of Aging Services.”

[xxxviii] New Jersey Department of Health, Office of Minority and Multicultural Health (2020). “About Us.” Last Reviewed: 11/23/2018. Online: http://www.nj.gov/health/ommh/about-us; Budget analysis completed by author using Departmental Appropriations information on the New Jersey Office of Management and Budget (OMB) website.

[xxxix] Office of Governor Phil Murphy. “Nurture NJ.” Online: https://www.nj.gov/governor/admin/fl/nurturenj.shtml

[xl] Office of Governor Phil Murphy. “Governor Murphy Announces Actions to Require Reporting of COVID-19 Demographic Data.” 22 April 2020. Online: https://nj.gov/governor/news/news/562020/approved/20200422b.shtml

[xli] Gibbons, Ann (2020). “How can We Save Black and Brown Lives During a Pandemic? Data from Past Studies can Point the Way.” Science. 10 April 2020. Online: https://www.sciencemag.org/news/2020/04/how-can-we-save-black-and-brown-lives-during-pandemic-data-past-studies-can-point-way

[xlii] National Academy for State Health Policy (2020). “How States Collect Data, Report, and Act on COVID-19 Racial and Ethnic Disparities.” Online: https://www.nashp.org/how-states-report-covid-19-data-by-race-and-ethnicity/

[xliii] National Network of Public Health Institutes (2020). Website: https://nnphi.org/about-nnphi/. Last accessed: 9 September 2020.

[xliv] Race Forward (n.d.). Racial Equity Impact Assessment Toolkit. Online: https://www.raceforward.org/practice/tools/racial-equity-impact-assessment-toolkit; Center for the Study of Social Policy (2018). “Racial Equity Impact Assessment.” Online: https://cssp.org/wp-content/uploads/2018/08/Race-Equity-Impact-Assessment-Tool.pdf

[xlv] County Health Rankings & Roadmaps, a Robert Wood Johnson Foundation Program (2020). “Cultural Competence Training for Health Care Professionals.” Updated 27 January 2020. Online: https://www.countyhealthrankings.org/take-action-to-improve-health/what-works-for-health/strategies/cultural-competence-training-for-health-care-professionals

[xlvi] New Jersey Department of Health. Office of Minority and Multicultural Health. Online: https://www.nj.gov/health/ommh/

[xlvii] Boatright, Dowin H., Elizabeth A. Samuels, Laura Cramer, Jeremiah Cross, Mayur Desai, Darin Latimore, and Cary P. Gross (2018). "Association between the Liaison Committee on Medical Education’s Diversity Standards and Changes in Percentage of Medical Student Sex, Race, and Ethnicity." JAMA 320 (21): 2267-2269.

[xlviii] Office of Governor Phil Murphy (2020). “Governor Murphy Signs Legislative Package to Combat New Jersey’s Maternal and Infant Health Crisis.” 8 May 2019. Online: https://www.nj.gov/governor/news/news/562019/20190508a.shtml; Office of Governor Phil Murphy (2020). “Governor Murphy Signs Legislation Expanding Access to Professional and Occupational Licenses.” 1 September 2020. Online: https://www.nj.gov/governor/news/news/562020/approved/20200901c.shtml

[xlix] A good example of these efforts is the Washington Health Corps, established in 2019. See information here: https://wsac.wa.gov/washington-health-corps

[l] New Jersey Office of Emergency Management (2018). “5.21 Pandemic.” 2019 New Jersey State Hazard Mitigation Plan. Online: http://ready.nj.gov/mitigation/2019-mitigation-plan.shtml Specific chapter: http://ready.nj.gov/mitigation/pdf/2019/mit2019_section5-21_Pandemics.pdf

Census 2019: New Jersey’s Uninsured Rate Increased for the First Time in Years

As the COVID-19 pandemic has taught the country, access to health care is essential for all residents to lead a healthy life, protect public health, and build an economically and racially just future. While New Jersey outpaces other states in prioritizing access for all, newly released data on health insurance coverage from the United States Census Bureau show that the Garden State still has a long way to go in guaranteeing a healthy and equitable future.

New Jersey’s Uninsured Rate Increased for the First Time Since 2013  

The number of uninsured New Jersey residents increased in 2019 from the year prior, according to newly released American Community Survey data.  This represents the first increase in the state’s uninsured rate since the Affordable Care Act (ACA) was fully implemented, and is likely due to the Trump administration’s ongoing efforts to sabotage the landmark health law. Approximately 692,000 New Jerseyans were uninsured in 2019, representing a 6.8 percent increase in the uninsured rate from 2018. Residents under the age of 19 made up 88,000 of those uninsured in the state, representing a 10.3 percent increase in the uninsured rate for this age group.

These increases were not spread equally among all New Jerseyans. A hostile national environment toward people of color and immigrants, including the fear and uncertainty caused by the Trump administration’s public charge rule, have made it increasingly difficult to boost health care enrollment. In New Jersey, approximately 343,000 Latinx residents were uninsured in 2019, an increase of 7.5 percent in the uninsured rate from 2018. Residents identifying as Latinx, Black, or American Indian/Alaska Native remained the most likely to be uninsured.

Despite these challenges, New Jersey is still out-performing many other states in getting more residents covered. Nationally, 9.2 percent of people remained uninsured in 2019, a continuation of the increases experienced every year since 2016. While the Garden State’s uninsured rate (7.9 percent) crept closer to the national rate between 2018 and 2019, it remained well below that national average — and far below the state’s 2010 uninsured rate of 13.2 percent. New Jersey was able to expand health coverage thanks in great part to the implementation of the ACA. The state’s decisions to adopt many of the health law’s key provisions, particularly the expansion of Medicaid in 2014, have helped the state provide affordable coverage options. Similarly, New Jersey’s proactive decisions to codify key ACA provisions in state law — including the establishment of a reinsurance fund, banning junk plans, and restoring the individual mandate — helped protect these gains amidst the Trump administration’s ongoing efforts to undermine the ACA.

The COVID-19 Pandemic Promises Hardship … and New Jersey Needs to Prepare

New Jersey’s increasing uninsured rate must be viewed with careful consideration of the extraordinary conditions of 2020 that have yet to be captured by census data. With the COVID-19 pandemic, more individuals and families have been losing employer-based coverage, facing not only threats to their health but also to their economic well-being. This has been particularly true for people of color, who have fought the effects of structural racism that put them at greater risk for contracting, being hospitalized, and dying from the virus, in addition to facing more devastating and long-term economic repercussions.

In the Census Bureau’s most recent Household Pulse Survey — with data gathered between August 19th and 31st — over 8 percent of New Jersey respondents reported being uninsured, indicating a concerning increase from the 2019 estimates due to the pandemic. Without health coverage, people are unable to access needed care, a dilemma faced disproportionately by Black and Latinx residents in the state, according to the survey. The long-term health consequences of this lack of coverage will further exacerbate the overarching social and economic consequences of COVID-19 in the coming months and years.

There is hope, however. New Jersey has already seen that strong state action to protect the ACA and prioritize health care access improves outcomes. The 2014 Medicaid expansion in New Jersey has played a key role in dampening the overall effects of the COVID-19 crisis, as enrollment numbers have shown that the program has served as an important safety net for many residents who have lost employer-based coverage. Furthermore, Get Covered New Jersey, the new state-based health insurance exchange, opens for enrollment on November 1, 2020. With state subsidies available for those with incomes below 400 percent of the federal poverty level (annual income up to $51,040 for an individual or $104,800 for a family of four), the exchange will increase affordable coverage options for many of New Jersey’s populations who have suffered most during the pandemic.

Click here for the latest Census data on economic security in New Jersey.

COVID-19 Job Loss Leaves More Than 100,000 New Jerseyans Uninsured

The COVID-19 pandemic has exposed the many weaknesses of a health care system that ties coverage tightly to employment. Two recent reports by Families USA underscore the catastrophic result: an estimated 124,000 New Jerseyans lost access to their health insurancedue to loss of employment in the first months of 2020 and were not able to enroll in coverage under Medicaid, a spouse’s coverage, or the individual insurance market. This means that a total of approximately 701,000, or 13 percent, of all non-elderly adults in the state were uninsured as of May 2020.[i] Alarmingly, this loss of insurance could lead to additional job losses: as revenue for health care decreases, another 86,000 jobs could be lost in New Jersey’s health care industry alone.

These striking numbers, while historic, could have been much worse if not for state and federal policies that have expanded access to health care. If New Jersey had not expanded Medicaid, as allowed by the Affordable Care Act (ACA), many more individuals would currently be uninsured. By expanding eligibility to previously excluded individuals —  including childless adults with income below 138 percent of the federal poverty level ($1,468 per month for a single adult in 2020) — the Garden State has a lower share of adults who are uninsured during the crisis than states that have not expanded Medicaid.[ii] The Families USA reports estimate that uninsurance rates for non-elderly adults in non-expansion states have reached levels as high as 29 percent (Texas), which could result in 362,000 additional job losses in the health care sector.[iii] With Census Bureau data showing that, nationwide, communities of color and low-wage workers have been most likely to lose insurance during the pandemic, Medicaid eligibility for these vulnerable populations has proven crucial to better addressing the fallout of the crisis.

During New Jersey’s pandemic lockdown, increases in NJ FamilyCare enrollment — New Jersey’s Medicaid and Children’s Health Insurance Program (CHIP) — show that the program serves as critical relief for many experiencing a loss of income. After an overall decline in enrollment in previous months, the COVID-19 pandemic led to a quick and significant surge in Medicaid enrollment numbers as disenrollment was frozen and hundreds of thousands of residents faced unemployment.[iv] From February to July 2020, total enrollment in NJ FamilyCare increased by 118,622 individuals, a jump of 7 percent. Enrollment in all non-Aged, Blind, and Disabled eligibility groups increased during the crisis as well. Most notably, enrollment for adult groups that became newly eligible under the Medicaid expansion rose significantly during the crisis, demonstrating that this safety net has successfully protected thousands of New Jerseyans that otherwise would have been uninsured after losing insurance through their employers.

How do we move forward?

Pandemics necessitate strong governmental responses. Leaders need to both support the health care system through crisis conditions and protect residents by slowing the spread of the outbreak. Viruses do not discriminate in whom they infect, but they do thrive on discriminatory structures within a country, feeding off of the disparities and shortcomings in our institutions and furthering the inequities present. Strengthening affordable health care options outside of employment, providing safe working conditions, improving access to basic needs like healthy foods, and increasing resources to deal with emergencies that low- and moderate-income families face should be prioritized.

By supporting the ACA, building more options for affordable coverage, avoiding cuts to critical services for vulnerable populations, and establishing guarantees of job retention in the midst of unsafe conditions, state lawmakers can demonstrate their commitment to a more equitable New Jersey. This is not the first crisis to challenge our existing social and economic systems, nor will it be the last. It is time for Garden State leaders to recognize the lessons of COVID-19 and to make sure that when another outbreak inevitably arrives, we are ready.


Appendix

ABD = Aged, Blind, and Disabled.
M-CHIP = Children under an extended income eligibility group in Medicaid that is funded by CHIP funds.
ABP = Alternative Benefit Plan. New Jersey’s adoption of Medicaid expansion introduced eligibility for all non-Medicare eligible individuals under age 65 (children, pregnant women, parents and adults without dependent children) with incomes up to 138 percent of federal poverty level (FPL) based on modified adjusted gross income.

 


End Notes

[i] It is important to note here that some of the individuals who were furloughed or who elected to move into COBRA coverage after losing employment may be delayed in their self-reported loss of coverage as they maintain benefits for a few to several months after employment. However, for low-income households, coverage under such programs as COBRA is often unaffordable.

[ii] While the ACA officially introduced eligibility for households below 133 percent of the federal poverty level (FPL), it was doing so for “modified adjusted gross income” (MAGI). In another part of the act, one modification introduced was a further five-point deduction from the FPL, effectively making the eligibility level 138 percent. More information on this distinction can be found here: https://www.shadac.org/news/aca-note-when-133-equals-138-fpl-calculations-affordable-care-act

[iii] This calculation does not cover the recent spikes in COVID-19 cases in many of the non-expansion states.

[iv] With the Families First Coronavirus Response Act, a Federal Medical Assistance Percentage (FMAP) bump was provided for states, given that they met particular requirements. One of these Maintenance of Effort (MOE) provisions required that Medicaid enrollees who might have otherwise lost eligibility due to “issues such as non-response to redetermination requests or changes in income” remain enrolled during the course of the crisis. Maintaining these enrollees while also taking in new enrollees accounts for a significant amount of the growth, as noted in the above linked New Jersey Department of Human Services monthly enrollment report. This helps to protect many who may have struggled to attend to redetermination requests or faced uncertain income levels during this time, in addition to those who have recently lost employment.

NJPP Applauds Passage of State-Level Health Insurance Assessment

Earlier today, the New Jersey Assembly and Senate passed S2676/A4389, which would establish a state-level Health Insurance Assessment (HIA). With a state-level HIA, New Jersey will raise over $200 million in annual revenue — at no new cost to insurance companies — to invest in initiatives to make health care more affordable in the state’s new health care exchange. In response to the passage of this bill, New Jersey Policy Perspective (NJPP) releases the following statement. 

Brittany Holom, Senior Policy Analyst, New Jersey Policy Perspective:

“With the passage of this bill, New Jersey is solidifying itself as a national leader in protecting the Affordable Care Act and keeping health coverage affordable. The Health Insurance Assessment will provide ample resources for New Jersey to expand health coverage, lower the number of people who are uninsured, and address racial disparities in access to care. These are necessary steps to build a stronger and more equitable state where all residents can lead healthy lives. If the COVID-19 pandemic has taught us anything, it’s that improving access to care will improve public health for all. We sincerely thank Senator Joe Vitale and Assemblyman John McKeon for their leadership on this critical issue.”

For more information on the state-level HIA, read NJPP’s explainer: New Jersey Can Act Now to Make Health Care More Affordable: The Health Insurance Assessment Explained

New Jersey Policy Perspective (NJPP) is a nonpartisan think tank that drives policy change to advance economic, social, and racial justice through evidence-based, independent research, analysis, and advocacy.

# # #

The Health Insurance Assessment Will Make Coverage More Affordable and Accessible

The following testimony, on A4389, was delivered to the Assembly Appropriations Committee on July 27, 2020.

Good morning Chairman Burzichelli and members of the Appropriations Committee. Thank you for this opportunity to provide my testimony on the Health Insurance Assessment. My name is Dr. Brittany Holom, and I am a senior policy analyst at New Jersey Policy Perspective (NJPP). NJPP is a non-partisan, non-profit research institution that focuses on policies that can improve the lives of low- and middle-income people, strengthen our state’s economy, and enhance the quality of life in New Jersey.

New Jersey stands at a critical juncture for our health care system. The full impact of the COVID-19 pandemic is still to be seen, but we know one thing for sure: the virus has taken a historic toll on the families, economy, and future of New Jersey. The measures needed to protect our residents and contain the virus’ outbreak have resulted not only in lost income, but also a lack of insurance coverage, rising distrust in and fear of the health care system, and uncertainty about a vast array of activities for the foreseeable future. This is a moment when New Jerseyans need to see that their leaders are not just reacting to the crisis in the short term, but are committed to protecting them in the long term.

In order to maintain the state’s vital services and build a system better able to handle these crises going forward, we need to be creative. The proposed Health Insurance Assessment (HIA) provides a golden opportunity to do just that. With the federal government giving up this source of income, New Jersey has the chance to absorb those funds without having to introduce changes to current fees.

This is why NJPP strongly supports the proposed legislation to collect an assessment on certain health insurance providers and direct those resources toward making health coverage more affordable and accessible. We understand the need for revenue to not only support current programs, but also to support new initiatives to ensure that New Jersey’s health care landscape is more equitable.

The legislation’s dedication of funds to health care gives New Jersey long-term resources to keep health care affordable. Estimates of a state HIA’s revenue come in just above $300 million. This revenue can be put toward initiatives that provide subsidies to our low- and moderately-paid working families, create more affordable coverage opportunities for our most vulnerable populations, support the reinsurance program, help small businesses with the costs of care, and much more. This is more than a simple cut of costs — this is an investment in a sustainable and affordable health care system for New Jersey’s residents for the future.

This is New Jersey’s moment to make that investment. The federal fee expires after December 31st of this year. This means that, by establishing a state fee now, we are maintaining a system that already exists and are not introducing a new fee for health insurance providers. Only by establishing the fee this year do we have the opportunity to capture this revenue without seeing an increase in rates from the previous year.

Some groups may argue that this would raise rates. This is simply not true. New Jersey would be replacing an existing fee — not introducing a new one — and, because that money is being invested back in the health care system, the state would be committing to sustainable decreases in rates. Further, by supporting increases in enrollment and improving the health insurance risk pool, the state would be directly aiding in cost decreases for New Jersey residents. In other words, this is not a one-and-done situation; rates would not just decrease for one year before increasing again. Instead, measures would support lower rates in the long term.

Again, the opportunity to establish this source of revenue and commit funds to affordability is only available this year. If we let this fee expire without replacing it, the actions needed to build this revenue in later years will face significant obstacles, and residents will be faced with greater instability in their health insurance options. Leaders need to show that they are willing to invest in their residents’ future, because if the COVID-19 pandemic has not been a strong enough lesson on the necessity for that investment, then it is clear that nothing ever will be.

Thank you for your time.

New Jersey Can Act Now to Make Health Care More Affordable: The Health Insurance Assessment Explained

The COVID-19 pandemic is revealing the fragility of our health system: from disparities in providing care to people of color to budget shortfalls that threaten the state’s social safety net. In the midst of these concurrent health and budget crises, New Jersey has the opportunity to expand health coverage by picking up revenue that the federal government is leaving behind through the Health Insurance Assessment (HIA). The HIA would bring in more funding for health care programs, increasing coverage and affordability amongst children and low- and moderate-income families across the state. This explainer answers frequently asked questions about the HIA and how it can improve health care in New Jersey.

 

What is a Health Insurance Assessment (HIA)?

The Health Insurance Assessment (HIA) is a federal fee on health insurance companies that was established in 2014 to help fund the Affordable Care Act (ACA). This fee is set to expire on January 1, 2021, giving states the opportunity to take on the assessment on insurance providers and capture funding all without raising insurers’ payments.[1] States that implement their own HIA have the ability to spend the funds however they see fit, providing them the flexibility necessary to meet their own unique health care needs. Governor Phil Murphy first proposed the HIA for New Jersey in his Fiscal Year 2021 Budget.[2]

How much revenue would a state-level HIA bring into New Jersey?

The HIA proposed in S2676/A4389 (as amended in committee on Monday, July 27, 2020) is projected to bring in over $224 million in revenue for New Jersey in calendar year 2021.[3] Because the state HIA proposal differs from the existing federal HIA, it will bring in less revenue than if the state had mirrored the federal fee, which would have net the state $567 million in revenue. This lower revenue figure is a result of the state HIA proposal not applying to Medicaid, Medicare Advantage and prescription plans, federal employee and retiree coverage, dental plans, Multiple Employer WelfareArrangements (MEWAs) established before the enactment of the bill, or small-group plans which were included in the federal fee.[4]

Who would benefit from a state-level HIA?

With funds directed toward health care, New Jersey’s children, working families, and low- to moderate-income households would benefit from a state-level HIA. Unlike the federal fee, which was not directed toward specific health care costs, a state-level HIA can help provide the funding needed to expand coverage and address existing inequities in access to quality care.[5] This can be accomplished by using the funds to: provide health coverage for all kids; provide subsidies to low-income residents; create a public plan on the ACA market for families with income of less than 400% of the federal poverty level (FPL), which, in 2020, is $68,960 for a family of two or $104,800 for a family of four.[6] The state could also offset high claims through the reinsurance program, which partially reimburses insurance providers for high-cost claims, helping to stabilize the market and decrease plan prices.

As we have learned during the COVID-19 pandemic, improving access to health care helps to improve public health for all New Jerseyans. By getting more people covered and giving them greater access to quality care, we can reduce the spread and fatalities from infectious diseases like COVID-19 that occur when residents are unable or reluctant to seek health care when needed.

How would a state-level HIA improve public health and increase affordability?

In New Jersey, the state-level HIA would generate revenue to improve health care access and affordability through a variety of mechanisms, including subsidies, reinsurance, tax policies, outreach and enrollment efforts, and other efforts to extend coverage to and improve affordability of health insurance for low- and moderate-income families and the uninsured. The funds can only be used for these purposes, as outlined in S2676/A4389.

The revenue collected could fund initiatives like enrollment efforts for children, so that more affordable coverage options are available to the approximately 80,000 uninsured kids in New Jersey.[7] Revenues could also be used to improve affordability and coverage options for working families, particularly low- and moderate-income families. With revenue from a state-level HIA, New Jersey could provide subsidies to individuals so they can better afford their insurance, create a public plan on the ACA market that will benefit families with income of less than 400% of the federal poverty level (FPL), and/or offset high claims through the reinsurance program. New Jersey should determine how to most effectively use this revenue based on forthcoming affordability studies by the state Department of Banking and Insurance, as mandated by legislation passed in 2019.[8]

How would a state-level HIA impact insurance providers, and what types of insurance plans would be included?

For insurance providers, a state-level HIA would not be a new fee. The federal HIA came into effect in 2014.[9] While it was suspended temporarily in 2017 and 2019, the federal HIA is in place for 2020 and was included in the calculations for the 2020 premium rates. By taking action in 2020, New Jersey would be preserving the current assessment, rather than allowing it to lapse.

The state would redirect the assessment funds currently paid to the federal government by individual insurance and large-group coverage plans back to the state. Medicaid Managed Care Organizations (MCOs) — which contract with the state to provide Medicaid benefits in exchange for payments from the state — small-group plans, MEWAs, and dental plans are currently subject to the expiring federal fee. However, under the proposed state-level assessment, these plans would not be included.

The state also cannot legally collect this assessment from Medicare plans or federal employee or retiree coverage, which are included in the federal HIA. Finally, the fee will not be collected from self-funded plans, which were exempted from the federal HIA.

Would a state-level HIA lead to increases in premiums?

Based on the experiences of other states with their own HIA, New Jersey should not see an overall increase in premiums due to the assessment. This is because it continues the structure of fees that is already in place. Further, increasing affordability and coverage would strengthen and improve New Jersey’s State-Based Health Exchange, which is set to launch in November 2020.[10] An increase in enrollment would help to lower premiums by improving the risk pool; it would also bring more federal money into the state through premium tax credits, a tax credit that the federal government provides to help lower the cost of monthly premiums on the Marketplace for low- and moderate-income individuals.

Have other states introduced state-level HIAs?

Other states have shown that a state-level HIA can generate funds to help improve affordability of health insurance for state residents. Maryland and Delaware both enacted state-level HIAs when the federal fee was temporarily suspended in 2019 to provide funds for market stabilization efforts.[11] Delaware’s and Maryland’s programs partially reimburse insurance providers for high-cost claims, which helps to keep plan costs down.[12] New Jersey currently has a reinsurance program in place that could similarly benefit from a portion of the funding through a state-level HIA.

At least two more states have sought to take advantage of this opportunity for funding affordability measures this year. In June 2020, Colorado became the latest state to enact its own Health Insurance Assessment, which will fund critical measures to make health coverage more affordable. Specifically, the Colorado HIA will provide additional funding for state-subsidized plans for those who are not eligible for premium tax credits or public assistance health care programs, payments to carriers to help lower premiums for those who already receive a premium tax credit, and their reinsurance program. The legislation will particularly help those families who receive assistance but still find health insurance unaffordable, as well as those who are ineligible for premium tax credits under federal law, including those without sufficient documentation.[13] New Mexico introduced a similar bill in February. This legislation proposed creating a Health Care Affordability Fund and using the revenue to decrease premiums for residents across the state.[14]

Over the last several years, New Jersey has emerged as a national leader in expanding health coverage and keeping insurance affordable amidst ongoing attacks on the Affordable Care Act by the federal government. Establishing a state-level HIA is the natural next step for New Jersey to improve public health and ensure all residents can lead healthy lives.


End Notes

[1] Internal Revenue Service, Treasury. 2020. “Affordable Care Act Provision 9010 – Health Insurance Providers Fee.” Online: https://www.irs.gov/businesses/corporations/affordable-care-act-provision-9010. The fee is repealed for all calendar years after December 31, 2020.

[2] Office of Governor Philip Murphy. 2020. 2021 Budget in Brief. Pg. 26. Can be read online here: http://d31hzlhk6di2h5.cloudfront.net/20200225/ce/30/5e/26/39c12d44bf1af2b6bd2ab34a/BIB_FY2021.pdf

[3] State of New Jersey, 219th Legislature. 2020. “An Act concerning an assessment on entities authorized to issue health benefits plans and supplementing Title 17B of the New Jersey Statutes.” Online: https://www.njleg.state.nj.us/2020/Bills/S3000/2676_R2.PDF. Note that this estimate was provided by the Department of Banking and Insurance (DOBI). The Office of Legislative Services wrote a fiscal impact note on the bill that estimates $390 million in revenue. This appears to be a possible error, as it is significantly higher than previous estimates that had included the now exempted small-group plans, MEWAS, and dental plans.

[4] Dorn, Stan. 2020. “A Golden Opportunity for States to Make Health Insurance More Affordable: Rapid Action Required.” The National Center for Coverage Innovation. Families USA. Online: https://familiesusa.org/resources/a-golden-opportunity-for-states-to-make-health-insurance-more-affordable-rapid-action-required/

[5] The revenues from the federal fee were used to help cover costs of the establishment and expansion of the ACA, but their specific use for affordability purposes is not legally required.

[6] Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services. 2020. “HHS Poverty Guidelines for 2020.” 8 January 2020. Online: https://aspe.hhs.gov/poverty-guidelines. See “A chart with percentages (e.g., 125 percent) of the guidelines (PDF)” on the right of the page.

[7] Castro, Raymond. 2019. “It’s Time for All Kids Health Coverage.” New Jersey Policy Perspective. Online: https://www.njpp.org/wp-content/uploads/2019/04/NJPP-All-Kids-Coverage-Report-Final-Draft-1.pdf

[8] The data could come from a study on methods of improving affordability of coverage that was commissioned through New Jersey’s Department of Banking and Insurance (DOBI), which regulates the insurance market in the state. This study was commissioned in the FY 2020 Appropriations Act, which can be found here: https://www.njleg.state.nj.us/2018/Bills/AL19/150_.PDF Please see pg. 28, beginning at line 20: “[T]he Commissioner of Banking and Insurance shall commission an actuarial and/or microsimulation analysis of options for the State to provide more affordable health coverage in the individual market for both consumers who are currently eligible for federal financial assistance and those who are not, while reducing disruptions in coverage affordability for consumers who become ineligible for Medicaid due to an increase in the minimum wage or who will lose federal subsidies in the Marketplace or exceed the income limits for federal subsidies in the Marketplace for other reasons.”

[9] Internal Revenue Service, Treasury. 2013. “Health Insurance Providers Fee.” Federal Register 78 (230): 71476. Document number 2013-28412, Available online: https://www.federalregister.gov/documents/2013/11/29/2013-28412/health-insurance-providers-fee

[10] Office of Governor Philip Murphy. 2019. “Governor Murphy Announces New Jersey to Transition to State-Based Exchange.” Online: https://www.nj.gov/governor/news/news/562019/20190628a.shtml

[11] Levitis, Jason, John-Pierre Cardenas, Steven Costantino. 2020. “Considerations for a State Health Insurer Fee Following Repeal of the Federal 9010 Fee.” State Health & Value Strategies. Available online: https://www.shvs.org/wp-content/uploads/2020/01/FINAL-State-Health-Insurer-Fee-Slide-Deck.pdf

[12] Delaware’s “The Delaware Health Insurance Individual Market Stabilization Reinsurance Program” (Delaware Code, Title 18, Chapter 87, § 8703) can be found here: https://delcode.delaware.gov/title18/c087/index.shtml. Maryland’s (Insurance Article, §6-. 102.1 Annotated Code of Maryland) can be found here: http://mgaleg.maryland.gov/mgawebsite/laws/StatuteText?article=gin&section=6-102.1&enactments=False&archived=False

[13] Colorado’s SB20-215 can be found here: https://leg.colorado.gov/bills/sb20-215

[14] New Mexico’s House Bill 278 can be found here: https://www.nmlegis.gov/Legislation/Legislation?Chamber=H&LegType=B&LegNo=278&year=20