Topic Category: Health

Trump's ACA Sabotage: Bad Medicine for New Jersey

Posted on by Raymond Castro

To read a PDF version of this report, click here.
For a “By the Numbers” breakdown, click here.

President Trump and the Republican leadership in Congress have caused great harm to New Jersey with their efforts to undermine the Affordable Care Act (ACA). Their systematic sabotage of the health care marketplace has not only affected thousands of New Jerseyans but the economy as well. For the first time since ACA was implemented, there are decreases in both the individual market and Medicaid, which this year amounted to 62,000 fewer New Jerseyans obtaining this coverage.[1] There is also concern that the uninsurance rate in New Jersey may be increasing again. The most recent preliminary national survey found an uninsurance rate of 10.6 percent in 2016 and 11.8 percent in 2017 for ages 18-65 in New Jersey.[2]

The decrease in enrollment this year in the Marketplace and Medicaid has resulted in up to $150 million in lost federal funds in New Jersey which will affect the economy.[3] In addition­­­, 137,000 middle class New Jerseyans who are not eligible for federal premium subsidies in the individual market paid approximately $125 million more for their insurance this year.[4] It is also estimated that there was a decrease of 22 percent in the number of Hispanics who are obtaining plans in the Marketplace due to Trump’s anti-immigrant policies.[5]

ACA Undermined in Almost Every Way Possible by Trump Administration

Congress may have been unsuccessful in their attempts to repeal and replace the ACA, but that hasn’t stopped the Trump administration from taking steps to undermine the landmark health care legislation. While it is difficult to keep track of all the attempts to undermine the ACA, the Trump administration has taken at least eighteen actions to deny health care to New Jerseyans. This includes slashing funding for navigators and advertising even though 35 percent of uninsured adults did not know about the Marketplace last year.[6] The President successfully persuaded Congress to repeal the individual mandate and eliminated cost sharing reduction payments to insurers which contributed to a spike in premiums for middle class New Jerseyans. His administration is also allowing states to sell association and junk insurance plans that do not include essential benefits that are especially needed for people with preexisting conditions. Through the Attorney General’s office, the administration is also urging a Texas court to allow states to charge higher premiums for Americans with pre-existing conditions, and the President wants to nominate a judge to the Supreme Court who would uphold such a decision.

Unprecedented Drop in Individual Market Enrollment

Enrollment in the individual market (which consists of New Jerseyans purchasing their insurance through the federal Marketplace website and those who purchase their plans directly)decreased to 329,000 from 369,000 in 2017, a drop of 39,858 New Jerseyans. This is the first decrease in enrollment since the Marketplace was established, wiping out the last two years of gains. This is especially disturbing as there are an estimated 149,000 New Jerseyans who are currently uninsured and eligible for premium subsidies.[7]

Insurance Has Become Unaffordable for Many Struggling New Jerseyans 

There was a greater decrease in the enrollment rate (14 percent) this year in the off-Marketplace than there was in the Marketplace (9.6 percent) because those New Jerseyans in the off-Marketplace must pay the full cost for their premiums, whereas 80 percent of New Jerseyans in the Marketplace receive federal subsidies.[8] The income limits for subsidies – $48,240 for an individual and $98,400 for a family of four – are modest given New Jersey’s high cost of living, especially with the recent increases in premiums. The full cost of average premiums for the standard plan in the Marketplace increased 19 percent in 2018, which is seven times the average rate of the previous three years of 2.5 percent. Much of that increase was caused by the expected elimination of the individual mandate and cost sharing reduction payments.

The 137,000 New Jerseyans who did not receive subsidies paid, on average, $900 more this year in premiums for a single individual and $3,600 for a family of four compared to the average premium over the last three years.[9] Given that premiums for a family of that size were typically over $20,000 per year before the Trump administration’s sabotage of the ACA, this year’s premium increase simply made insurance unaffordable for many New Jersey families.[10]

Family Enrollment in Medicaid Decreases for the First Time

For the first time since the start of its expansion in 2014, Medicaid enrollment decreased in fiscal year 2018 for parents and children. The sabotage of the Marketplace appears to be at least one of the causes for this decrease. About one quarter of everyone who enrolls in Medicaid does so through the Marketplace even though they can apply directly.[11] Up to 140,000 of these consumers are children and parents who were already eligible for Medicaid before the ACA but were unaware until they applied for assistance in the Marketplace. This exemplifies how cutbacks in outreach and advertisement for the Marketplace also affect Medicaid enrollment.

Before the Trump administration’s efforts to sabotage the ACA, New Jersey had projected an increase in Medicaid enrollment for 2018. Instead, 14,814 fewer residents enrolled between 2018. and 2017. Taking the state’s projections into account, there were 22,290 fewer parents and kids enrolled in 2018 than was expected. As the number of unemployed New Jerseyans has remained largely flat during this period, this decrease cannot be explained by economic factors.[12]

Trumps Anti-Immigrant Policies Suppress Enrollment in Medicaid and the Marketplace  

President Trump’s anti-immigrant rhetoric, federal policies, and proposals have done serious harm to Medicaid enrollment, especially in New Jersey, which has the fourth highest share of unauthorized immigrants in the nation.[13] The Trump administration’s overly aggressive actions to deport millions of unauthorized immigrants and its proposal to deny citizenship to legal immigrants if they or their child are on Medicaid discourages all legal immigrants from applying for Medicaid. This is especially true for undocumented parents who are afraid to enroll their citizen child because they fear the information will be shared with ICE and the parent will be deported. In New Jersey, one in six children have an unauthorized parent.[14] This problem is also leading to anecdotal reports that unauthorized parents are disenrolling their children in Medicaid. In 2016 there were an estimated 150,000 children covered by Medicaid/CHIP who had unauthorized parents.[15]

New Jerseyin Better Position than Most States, but Much More to Do to Achieve Universal Health Coverage

 Looking into the future, New Jersey is ahead of most states in working toward universal, affordable health coverage. New Jersey already has policies in place that prohibit the sale of junk plans, and the state recently enacted legislation that restores the individual mandate and establishes a reinsurance plan that will largely offset the hike in premiums caused by the Trump administration. Governor Murphy is also formulating an outreach plan that will maximize existing state resources, although it is unclear if funding will be restored for community-based organizations to perform the same functions as navigators.

While New Jersey has taken admirable steps to defend against attacks on the ACA, the state and its congressional representatives should not lose sight of the ultimate goal to provide universal health coverage. New Jersey’s uninsured decreased by about a third due to the ACA, but there are still approximately 700,000 New Jerseyans who are uninsured, and this number may be increasing again. It will be critical that the New Jersey’s congressional delegation reverse the Trump administration’s anti-ACA actions and improve the ACA to assist more people with more affordable coverage at all income levels.

New Jersey is limited in its ability to meet this challenge by itself, but there are realistic steps it can take to reduce the uninsured in New Jersey and reversethe Trump sabotage. It can start by passing legislation to fulfill the governor’s promise to cover all the remaining uninsured kids in New Jersey. This is achievable as approximately 95 percent of all children already have health insurance. The state should also consider a state takeover of the Marketplace, so it can extend the open enrollment period and make other improvements as other state Marketplaces have done. In addition, the state will need to vigorously advertise that New Jersey has replaced the federal individual mandate with a state mandate. New Jersey will also need to tackle the biggest challenge of all: how to reduce health costs while maintaining quality and access. Recent state enactment of surprise billing legislation that also eliminates inappropriate out-of-network costs and pending bills to limit prescription drugs are good first steps Over the last six months, New Jersey has been a model for stabilizing the health insurance market, but further bold action will be necessary to combat the Trump administration’s attempts to unravel the ACA.

 

Endnotes

[1] Decrease in enrollment in the individual market is from New Jersey Department of Banking and Insurance website and Medicaid enrollment is calculated from the SFY 2018 governor’s budget.

[2] Robin A. Cohen, Ph.D., Emily P. Zammitti, M.P.H., and Michael E. Martinez, M.P.H., M.H.S.A, National Health Interview Survey Early Release Program, Health Insurance Coverage: Early Release of Estimates From the National Health Interview Survey, 2017, https://www.cdc.gov/nchs/data/nhis/earlyrelease/insur201805.pdf

[3] The calculations for the lost Medicaid funding are explained in the table in the report. The lost funding in the Marketplace was calculated by multiplying the average premium subsidy in 2018 by the difference in the marketplace enrolment with subsidies in 2018 and 2017.  See average premiums at Kaiser Family Foundation website at https://www.kff.org/health-reform/state-indicator/marketplace-average-premiums-and-average-advanced-premium-tax-credit-aptc/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D

[4] Calculated by inflating the premium in 2017 in the marketplace by the average increase over the previous three years and comparing that to what was the actual increase in 2018 multiplied by everyone who did not receive a subsidy.

[5] Karina Wagnerman, New Study Finds Evidence of a “Chilling Effect” in 2016 Marketplace Enrollment,July 19, 2018, https://ccf.georgetown.edu/2018/07/19/new-study-finds-evidence-of-a-chilling-effect-in-2016-marketplace-enrollment/

[6] Halley Cloud, In Latest Sabotage Administration Nearly Eliminates Marketplace Enrollment Assistance Funds, July 13, 2018, https://www.cbpp.org/blog/in-latest-aca-sabotage-administration-nearly-eliminates-marketplace-enrollment-assistance-funds

[7] Kaiser Family Foundation, Distribution of Non-Elderly Uninsured Individuals,https://www.kff.org/health-reform/state-indicator/distribution-of-nonelderly-uninsured-individuals-who-are-ineligible-for-financial-assistance-due-to-income-offer-of-employer-coverage-or-citizenship-status/?dataView=1&currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D

[8] Kaiser Family Foundation, Effectuated Marketplace Enrollment and Financial Assistance, https://www.kff.org/other/state-indicator/effectuated-marketplace-enrollment-and-financial-assistance/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D

[9] See note 5. Divided total increase in premiums by everyone who did not receive a subsidy.

[10] NJPP analysis of plans in Healthcare.gov for 2018.

[11] DMAHS email responding to OPRA request by NJPP, December 12, 2017. The period is December 2006 to November 2017. Through marketplace: 134,761; Direct: 277,679.

[12] NJ Department of Labor, Major Indicators of Labor Market Activity for New Jersey Seasonally Adjusted 2017 Benchmark, https://www.nj.gov/labor/forms_pdfs/lwdhome/press/2018/20180719UITABLES.pdf

[13] Pew Research Center, U.S. Unauthorized Immigration Population Estimates, November 3, 2016, http://www.pewhispanic.org/interactives/unauthorized-immigrants/ https://www.njpp.org/wp-content/uploads/2018/02/NJPPCoverAllKidsJan2018.pdf

[14] Samantha Artiga, Kaiser Family Foundation, Potential Effects of Public Charge Changes On Health Coverage For Citizen Children, March 2018, https://www.kff.org/disparities-policy/issue-brief/potential-effects-of-public-charge-changes-on-health-coverage-for-citizen-children/

[15] Ibid.

 

Trump’s ACA Sabotage: Bad Medicine for New Jersey

Posted on by Raymond Castro

To read a PDF version of this report, click here.
For a “By the Numbers” breakdown, click here.

President Trump and the Republican leadership in Congress have caused great harm to New Jersey with their efforts to undermine the Affordable Care Act (ACA). Their systematic sabotage of the health care marketplace has not only affected thousands of New Jerseyans but the economy as well. For the first time since ACA was implemented, there are decreases in both the individual market and Medicaid, which this year amounted to 62,000 fewer New Jerseyans obtaining this coverage.[1] There is also concern that the uninsurance rate in New Jersey may be increasing again. The most recent preliminary national survey found an uninsurance rate of 10.6 percent in 2016 and 11.8 percent in 2017 for ages 18-65 in New Jersey.[2]

The decrease in enrollment this year in the Marketplace and Medicaid has resulted in up to $150 million in lost federal funds in New Jersey which will affect the economy.[3] In addition­­­, 137,000 middle class New Jerseyans who are not eligible for federal premium subsidies in the individual market paid approximately $125 million more for their insurance this year.[4] It is also estimated that there was a decrease of 22 percent in the number of Hispanics who are obtaining plans in the Marketplace due to Trump’s anti-immigrant policies.[5]

ACA Undermined in Almost Every Way Possible by Trump Administration

Congress may have been unsuccessful in their attempts to repeal and replace the ACA, but that hasn’t stopped the Trump administration from taking steps to undermine the landmark health care legislation. While it is difficult to keep track of all the attempts to undermine the ACA, the Trump administration has taken at least eighteen actions to deny health care to New Jerseyans. This includes slashing funding for navigators and advertising even though 35 percent of uninsured adults did not know about the Marketplace last year.[6] The President successfully persuaded Congress to repeal the individual mandate and eliminated cost sharing reduction payments to insurers which contributed to a spike in premiums for middle class New Jerseyans. His administration is also allowing states to sell association and junk insurance plans that do not include essential benefits that are especially needed for people with preexisting conditions. Through the Attorney General’s office, the administration is also urging a Texas court to allow states to charge higher premiums for Americans with pre-existing conditions, and the President wants to nominate a judge to the Supreme Court who would uphold such a decision.

Unprecedented Drop in Individual Market Enrollment

Enrollment in the individual market (which consists of New Jerseyans purchasing their insurance through the federal Marketplace website and those who purchase their plans directly)decreased to 329,000 from 369,000 in 2017, a drop of 39,858 New Jerseyans. This is the first decrease in enrollment since the Marketplace was established, wiping out the last two years of gains. This is especially disturbing as there are an estimated 149,000 New Jerseyans who are currently uninsured and eligible for premium subsidies.[7]

Insurance Has Become Unaffordable for Many Struggling New Jerseyans 

There was a greater decrease in the enrollment rate (14 percent) this year in the off-Marketplace than there was in the Marketplace (9.6 percent) because those New Jerseyans in the off-Marketplace must pay the full cost for their premiums, whereas 80 percent of New Jerseyans in the Marketplace receive federal subsidies.[8] The income limits for subsidies – $48,240 for an individual and $98,400 for a family of four – are modest given New Jersey’s high cost of living, especially with the recent increases in premiums. The full cost of average premiums for the standard plan in the Marketplace increased 19 percent in 2018, which is seven times the average rate of the previous three years of 2.5 percent. Much of that increase was caused by the expected elimination of the individual mandate and cost sharing reduction payments.

The 137,000 New Jerseyans who did not receive subsidies paid, on average, $900 more this year in premiums for a single individual and $3,600 for a family of four compared to the average premium over the last three years.[9] Given that premiums for a family of that size were typically over $20,000 per year before the Trump administration’s sabotage of the ACA, this year’s premium increase simply made insurance unaffordable for many New Jersey families.[10]

Family Enrollment in Medicaid Decreases for the First Time

For the first time since the start of its expansion in 2014, Medicaid enrollment decreased in fiscal year 2018 for parents and children. The sabotage of the Marketplace appears to be at least one of the causes for this decrease. About one quarter of everyone who enrolls in Medicaid does so through the Marketplace even though they can apply directly.[11] Up to 140,000 of these consumers are children and parents who were already eligible for Medicaid before the ACA but were unaware until they applied for assistance in the Marketplace. This exemplifies how cutbacks in outreach and advertisement for the Marketplace also affect Medicaid enrollment.

Before the Trump administration’s efforts to sabotage the ACA, New Jersey had projected an increase in Medicaid enrollment for 2018. Instead, 14,814 fewer residents enrolled between 2018. and 2017. Taking the state’s projections into account, there were 22,290 fewer parents and kids enrolled in 2018 than was expected. As the number of unemployed New Jerseyans has remained largely flat during this period, this decrease cannot be explained by economic factors.[12]

Trumps Anti-Immigrant Policies Suppress Enrollment in Medicaid and the Marketplace  

President Trump’s anti-immigrant rhetoric, federal policies, and proposals have done serious harm to Medicaid enrollment, especially in New Jersey, which has the fourth highest share of unauthorized immigrants in the nation.[13] The Trump administration’s overly aggressive actions to deport millions of unauthorized immigrants and its proposal to deny citizenship to legal immigrants if they or their child are on Medicaid discourages all legal immigrants from applying for Medicaid. This is especially true for undocumented parents who are afraid to enroll their citizen child because they fear the information will be shared with ICE and the parent will be deported. In New Jersey, one in six children have an unauthorized parent.[14] This problem is also leading to anecdotal reports that unauthorized parents are disenrolling their children in Medicaid. In 2016 there were an estimated 150,000 children covered by Medicaid/CHIP who had unauthorized parents.[15]

New Jerseyin Better Position than Most States, but Much More to Do to Achieve Universal Health Coverage

 Looking into the future, New Jersey is ahead of most states in working toward universal, affordable health coverage. New Jersey already has policies in place that prohibit the sale of junk plans, and the state recently enacted legislation that restores the individual mandate and establishes a reinsurance plan that will largely offset the hike in premiums caused by the Trump administration. Governor Murphy is also formulating an outreach plan that will maximize existing state resources, although it is unclear if funding will be restored for community-based organizations to perform the same functions as navigators.

While New Jersey has taken admirable steps to defend against attacks on the ACA, the state and its congressional representatives should not lose sight of the ultimate goal to provide universal health coverage. New Jersey’s uninsured decreased by about a third due to the ACA, but there are still approximately 700,000 New Jerseyans who are uninsured, and this number may be increasing again. It will be critical that the New Jersey’s congressional delegation reverse the Trump administration’s anti-ACA actions and improve the ACA to assist more people with more affordable coverage at all income levels.

New Jersey is limited in its ability to meet this challenge by itself, but there are realistic steps it can take to reduce the uninsured in New Jersey and reversethe Trump sabotage. It can start by passing legislation to fulfill the governor’s promise to cover all the remaining uninsured kids in New Jersey. This is achievable as approximately 95 percent of all children already have health insurance. The state should also consider a state takeover of the Marketplace, so it can extend the open enrollment period and make other improvements as other state Marketplaces have done. In addition, the state will need to vigorously advertise that New Jersey has replaced the federal individual mandate with a state mandate. New Jersey will also need to tackle the biggest challenge of all: how to reduce health costs while maintaining quality and access. Recent state enactment of surprise billing legislation that also eliminates inappropriate out-of-network costs and pending bills to limit prescription drugs are good first steps Over the last six months, New Jersey has been a model for stabilizing the health insurance market, but further bold action will be necessary to combat the Trump administration’s attempts to unravel the ACA.

 

Endnotes

[1] Decrease in enrollment in the individual market is from New Jersey Department of Banking and Insurance website and Medicaid enrollment is calculated from the SFY 2018 governor’s budget.

[2] Robin A. Cohen, Ph.D., Emily P. Zammitti, M.P.H., and Michael E. Martinez, M.P.H., M.H.S.A, National Health Interview Survey Early Release Program, Health Insurance Coverage: Early Release of Estimates From the National Health Interview Survey, 2017, https://www.cdc.gov/nchs/data/nhis/earlyrelease/insur201805.pdf

[3] The calculations for the lost Medicaid funding are explained in the table in the report. The lost funding in the Marketplace was calculated by multiplying the average premium subsidy in 2018 by the difference in the marketplace enrolment with subsidies in 2018 and 2017.  See average premiums at Kaiser Family Foundation website at https://www.kff.org/health-reform/state-indicator/marketplace-average-premiums-and-average-advanced-premium-tax-credit-aptc/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D

[4] Calculated by inflating the premium in 2017 in the marketplace by the average increase over the previous three years and comparing that to what was the actual increase in 2018 multiplied by everyone who did not receive a subsidy.

[5] Karina Wagnerman, New Study Finds Evidence of a “Chilling Effect” in 2016 Marketplace Enrollment,July 19, 2018, https://ccf.georgetown.edu/2018/07/19/new-study-finds-evidence-of-a-chilling-effect-in-2016-marketplace-enrollment/

[6] Halley Cloud, In Latest Sabotage Administration Nearly Eliminates Marketplace Enrollment Assistance Funds, July 13, 2018, https://www.cbpp.org/blog/in-latest-aca-sabotage-administration-nearly-eliminates-marketplace-enrollment-assistance-funds

[7] Kaiser Family Foundation, Distribution of Non-Elderly Uninsured Individuals,https://www.kff.org/health-reform/state-indicator/distribution-of-nonelderly-uninsured-individuals-who-are-ineligible-for-financial-assistance-due-to-income-offer-of-employer-coverage-or-citizenship-status/?dataView=1&currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D

[8] Kaiser Family Foundation, Effectuated Marketplace Enrollment and Financial Assistance, https://www.kff.org/other/state-indicator/effectuated-marketplace-enrollment-and-financial-assistance/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D

[9] See note 5. Divided total increase in premiums by everyone who did not receive a subsidy.

[10] NJPP analysis of plans in Healthcare.gov for 2018.

[11] DMAHS email responding to OPRA request by NJPP, December 12, 2017. The period is December 2006 to November 2017. Through marketplace: 134,761; Direct: 277,679.

[12] NJ Department of Labor, Major Indicators of Labor Market Activity for New Jersey Seasonally Adjusted 2017 Benchmark, https://www.nj.gov/labor/forms_pdfs/lwdhome/press/2018/20180719UITABLES.pdf

[13] Pew Research Center, U.S. Unauthorized Immigration Population Estimates, November 3, 2016, http://www.pewhispanic.org/interactives/unauthorized-immigrants/ http://www.njpp.org/wp-content/uploads/2018/02/NJPPCoverAllKidsJan2018.pdf

[14] Samantha Artiga, Kaiser Family Foundation, Potential Effects of Public Charge Changes On Health Coverage For Citizen Children, March 2018, https://www.kff.org/disparities-policy/issue-brief/potential-effects-of-public-charge-changes-on-health-coverage-for-citizen-children/

[15] Ibid.

 

Newest Trump Sabotage of Obamacare Could Make Health Insurance Unaffordable for Many New Jerseyans

Posted on by Raymond Castro

To read a PDF version of this report, click here. 

Despite recent progress made by New Jersey to keep health care coverage more affordable, the Trump administration continues to come up with new and harmful ways to do just the opposite. In New Jersey, premiums have already increased by about 20 percent in 2018 and enrollment in the individual market dropped by an unprecedented 40,000 residents. These newest actions would further undermine the health care marketplace, make insurance unaffordable for many more New Jerseyans, and could even increase the uninsured rate, which has dropped by about a third due to the Affordable Care Act (ACA).

There is a long list of actions the Trump administration has already taken to sabotage the ACA, but the most recent include the following:

1. Payments for New Jerseyans with the most serious health conditions in the individual and small employer market are halted

The Trump administration indefinitely suspended $64 million in payments to insurers in New Jersey to defray the cost of covering consumers with high health costs in 2017 in the individual and small (employer) group markets. The decision by the Centers of Medicare and Medicaid Services (CMS) not to redistribute funds to insurers for high need consumers, who often have preexisting conditions, is based on their refusal to challenge or remedy a court decision in New Mexico that invalidated their methodology for distributing “risk adjustment” payments. Those payments were to be made to insurers to compensate them for consumers who are, on average, unhealthier and therefore have higher medical costs. The federal government does not save any money for halting these payments because they are paid by other insurers that have healthier consumers.

Risk adjustment payments are necessary as the ACA requires that insurers accept anyone with pre-existing conditions. Because some insurers end up assisting more of these and other, sicker consumers than other insurers, they need additional compensation for those higher costs. These payments are crucial as they are the only remaining mechanism to compensate insurers for higher than usual consumer costs. Reinsurance ended in 2016 and Republicans in Congress defunded the risk corridor program in 2013.

While a system without risk adjustment payments creates winners and losers in the short term, all insurers lose in the long run because those insurers that have relatively healthy consumers in one year may have more unhealthy consumers in subsequent years. Because of the uncertainly of these payments, there will be pressure on all insurers to increase premiums next year. Ironically, in the CMS announcement about halting the payments, it praised the effectiveness of risk adjustment which has been in operation for three years. By suspending the payments indefinitely, CMS has caused more uncertainty in the individual and small group (employer) market which will lead to higher premiums unless this matter is resolved.

2. Federal funds for outreach slashed to near nothing

A few days after announcing the suspension of the risk adjustment payments, CMS announced that they were also slashing funding for navigators who help New Jerseyans with signing up for insurance and outreach. New Jersey’s funding was already cut 61 percent last year, decreasing the state’s allotment from $1.9 million to $720,000, one of the steepest declines in the nation. CMS’s decision to lower national funding next year by another 70 percent would result in New Jersey only receiving about $400,000. In effect, this would result in no meaningful outreach and assistance statewide.

3. Trump’s Nominee for the Supreme Court could end protections for pre-existing conditions for most New Jerseyans

Because of the ACA, there are 3.8 million New Jerseyans with pre-existing conditions who cannot be charged more if they lose their employer-based coverage and need to purchase insurance in the individual or small group market. However, the Trump administration has argued in a case filed in Texas that because Congress eliminated the individual mandate, the court should allow insurers to charge consumers based on their pre-existing conditions as they did in the past. This would price many consumers out of the market. This threat has become even more serious given that President Trump will appoint a conservative justice to the Supreme Court where this case could ultimately be decided if it is upheld in lower courts. Should the administration get its way on eliminating protections for pre-existing conditions, it could finally unravel the ACA.

New Jersey has taken major actions to protect consumers, but more help will be needed

Thanks to Gov. Murphy and the Legislature, New Jersey was the first state to restore the individual mandate after Republicans in Congress repealed it. This was needed to avoid individuals gaming the system by waiting until they were very ill before purchasing insurance, which would drive up the premiums for everyone else to defray their additional cost. It also discourages individuals from not obtaining insurance and instead going to an emergency room, which would be paid for by taxpayers in the form of charity care payments to hospitals. Most low-income individuals who seek insurance in the marketplace find that their premiums are greatly reduced by federal subsidies and, if they are eligible for Medicaid, there is no cost at all.

New Jersey is also the only state to use the revenues from the individual mandate to help fund a reinsurance program to reduce premiums for middle class families who receive no federal premium subsidies. It has also submitted a waiver to the federal government that would secure $244 million in federal savings starting in the first year and increase thereafter over five years. The combination of these two initiatives would reduce premiums by an impressive 15 percent from what they would be otherwise.

In addition, one of the first acts of Governor Murphy was to sign an executive order requiring all state entities that interact with the public “to provide information to the public regarding the Affordable Care Act and ways to enroll,” subject to budgetary constraints and law. Such a plan to achieve this objective is being prepared by the governor’s office.

These laudatory pursuits will significantly reduce the impact of Republican efforts to undermine the marketplace, but they will not totally eliminate all the harm that will occur. This sabotage would still result in an increase in premiums from what they would otherwise be and possibly more uninsured people. The most effective strategy is for the state and New Jersey’s Congressional delegation to continue to strongly oppose these federal efforts to disrupt the marketplace. However, if that opposition is not successful, the state will need to come up with even more new and creative ways to protect New Jerseyans.

 

“American Health Care Act” Would Have Been a Disaster for New Jersey

Posted on by Raymond Castro

To read a PDF version of this report, click here. 

May 4th marks a day of infamy in New Jersey and nationally, for it was on that day that Congress passed the American Health Care Act of 2017 in an attempt to “repeal and replace” the Affordable Care Act.

The stakes were particularly high for New Jersey because about 800,000 New Jerseyans – nearly 10 percent of the state’s population – obtained their health coverage through the ACA, either in the private individual marketplace or though the Medicaid expansion. Enactment of this bill would have caused irreparable harm to the state’s health, budget and economy.

To the credit of the New Jersey Congressional Delegation, 10 of the 12 members voted against it, including three of the five Republican members. While that was not enough to prevent passage in the House, the bill fortunately failed in the Senate. Here is what would have happened in New Jersey if this regressive bill had become law:1

Over Half a Million New Jerseyans Would Have Lost Health Coverage

  • 540,000 New Jersey residents would have become uninsured.
  • The uninsurance rate would have spiked by 50 percent (from 9.8% in 2016 to 14.7% by 2026).
  • The newly uninsured would have consisted of an equal number of New Jerseyans who had insurance in Medicaid or the Marketplace.

The Uninsured Would Have Spiked in All Congressional Districts

  • Tens of thousands of residents would have lost health coverage in all Congressional districts (see table).
  • Districts represented by Republicans would have seen a larger average percentage increase in the number of uninsured than districts represented by Democrats.

One in 10 New Jersey Adults Would Have Lost Coverage Due to the Effective End of the Medicaid Expansion

  • Enrollment would have likely fallen from 562,000 adults to 6,000 by 2027.
  • Eliminating the federal matching rate of 90 percent would have meant that New Jersey could not afford to maintain the Medicaid expansion.
  • New Jersey would have lost about $21 billion in federal funds for the Medicaid expansion over 7 years.
  • State costs for charity care would have increased by the hundreds of millions.

A Permanent Cap on Federal Medicaid Funds Would Have Threatened the Health of 1.6 Million Vulnerable New Jerseyans

  • The cap would have harmed everyone on Medicaid but especially seniors and people with disabilities because they represent about three quarters of Medicaid funding.
  • The already very low reimbursement rates to providers would have been reduced even lower which would have sharply limited access to critical medical care.

Premiums for New Jerseyans With Preexisting Conditions Could Have BecomeUnaffordable

  • Premium tax credits would be reduced by $7 billion in New Jersey over 10 years.
  • Instead of a share of a person’s income, premium credits would have been based on age.
  • Older New Jerseyans would have been hit with up to an 800% increase in the cost for their insurance, making it unaffordable for most of them.
  • Due to New Jersey’s own Congressman Tom MacArthur’s amendment, states would have been allowed to greatly increase premiums based on pre-existing conditions and eliminate essential benefits like hospitalization, maternity care and mental health or substance abuse treatment.

New Jersey’s Economy Would Have Been Disrupted and Thousands of Jobs Lost

  • New Jersey would have lost about $4.8 billion annually in federal funds which would have led to a $6.6 billion loss in economic activity and 54,000 jobs.

 

Endnotes

[1] For sources to all data, see Raymond Castro, House-Passed Health Bill Would End Coverage for More Than Half a Million New Jerseyans, New Jersey Policy Perspective, June 2017, https://www.njpp.org/healthcare/house-passed-health-bill-would-end-coverage-for-more-than-half-a-million-new-jerseyans

New Jersey Takes A Step Toward Restoring Health Care Mandate

Posted on by Raymond Castro

Today’s passage of legislation restoring the individual mandate is essential to keep insurance affordable and sends a powerful message to Washington that New Jersey will not allow the Affordable Care Act to be sabotaged. Despite New Jersey’s progress in reducing the number of uninsured residents, this measure is needed because there are still about 700,000 New Jerseyans without coverage.

This bill is critically important to stabilizing the health insurance market and will help make sure that insurance coverage remains affordable for as many New Jerseyans as possible. The state still has hundreds of thousands of uninsured residents and it is vital that we do all we can to make sure everyone can secure affordable health insurance and improve public health.

If New Jersey does not act the consequences will be dire. NJPP estimates that the number of uninsured in New Jersey will increase by about 300,000 over the next decade; premiums will rise about 10 percent; the state will lose billions in federal Medicaid funds and premium subsidies; and taxpayers will be hit with a much bigger bill for charity care payments to hospitals.

Importantly, the revenues collected from the penalties can be used for a reinsurance plan that will decrease the cost of providing health coverage for very sick individuals, thereby further reducing premiums for these families as well as generating federal funds( if a waiver is approved). This bill (S-1878) also passed today.

The penalty should encourage younger, healthier people to obtain insurance, spreading the risk in the health insurance pool. Without robust participation of these individuals, insurance premiums will climb and the market could destabilize.

This bill will mainly help 150,000 middle-class New Jerseyans who purchase their insurance directly since they are not eligible for federal subsidies under the Affordable Care Act and therefore must pay for the full cost themselves. Since premiums already increased this year in anticipation of the repeal of the mandate, these families would save up to $76 million next year by its restoration.

Currently a four-person family must pay about $23,000 a year; when the maximum out of-pocket costs are added, the total cost increases to $37,700, which guarantees that insurance is unaffordable.

Lower-income families will also benefit because the proposed legislation will encourage many uninsured to seek out more-affordable insurance. National research shows most of these individuals are eligible for federal subsidies and that about half are eligible for a plan that costs less than the penalty they may otherwise have to pay. Due to the mandate, over 100,000 New Jerseyans found out they were eligible for Medicaid – which has no cost sharing – when they searched the Marketplace for insurance.

The bill also applies the penalty to anyone who purchased a plan that does not meet the essential benefits requirements in the ACA or New Jersey law. This measure was added to prevent short term and association plans – sometimes called “junk plans” which are being pushed by the Trump administration to circumvent the ACA – from being sold in New Jersey.

Passage of 'Out-of-Network' Bill a Historic Step Forward

Posted on by Raymond Castro

The legislature made history today by finally passing legislation (S-485) that will help to address surprise billing and the high cost of health insurance. This is critical as polls show that a primary concern of New Jerseyans is the high cost of health care. While this legislation is extremely important and welcomed, more legislation will be needed in the future to bring down these costs.

Simply put, insurance is becoming unaffordable in New Jersey, especially for middle class families who are not eligible for public coverage or subsidies. While it took many years to finalize this bill, it demonstrates that the legislature can take on powerful interest groups and establish policies that will benefit consumers.

The average cost for a family with employer-based coverage is about $18,000, the 13th highest amount in the nation. This affects the family, but also the employer which shares in the cost and is one of the main reasons why the number of New Jerseyans covered by small employers has dropped by half since 2010 (from 740,000 to 371,000). This problem is even worse for families who do not have employer- based coverage and must pay the entire cost for coverage in the individual market; a four-person family typically pays about $23,000 in premiums, plus cost sharing, which often represent between a quarter to a third of their gross income.

This bill addresses this problem in two major ways. First, it provides new protections and transparency for New Jerseyans to avoid surprise billing, including a prohibition on balanced billing. In a 2016 report on this issue, NJPP estimated that 168,000 New Jerseyans receive surprise bills from their health providers annually. These bills amount to $420 million and average about $2,500 per person. Under this legislation, many of these individuals would no longer receive a bill or, if they did, they would know about it before they agreed to medical treatment. New Jerseyans who obtain their insurance in the individual or small group market, Medicare or Medicaid, and the health system for public employees already have some – but not all – of these protections, however many of the 3.8 million New Jerseyans in self-insured employer-based plans do not.

The second way in which this bill will reduce costs is that it addresses the problem of health providers that submit claims to insurers for exorbitant, inappropriate costs by requiring a fair and expedited method to arbitrate bills when there is no agreement on what should be paid. In effect a small number of health providers can charge significantly higher bills by going out of network.  NJPP estimated that the total claims submitted to insurers for out of network costs amounted to about one billion dollars in New Jersey, much of which are passed along in higher premiums and cost sharing to five million New Jerseyans with commercial insurance. The new arbitration system also benefits many health providers because it provides a quick and fair method to resolve billing disputes.

New Jersey Should Replicate ACA Penalty to Keep Coverage Affordable

Posted on by Raymond Castro

Below are prepared remarks delivered to the Senate Commerce Committee today on S-1877.

Thank you for the opportunity to testify on the need to preserve the individual health insurance market in New Jersey. While New Jersey has made major progress in reducing the uninsured, there are still about 700,000 New Jerseyans without coverage. Congress’ recent repeal of the shared responsibility penalty in the Affordable Care Act will undoubtedly cause that number to rise unless something is done.

This penalty provided an important incentive to ensure that younger, healthier people obtain insurance and spread the risk in the health insurance pool. Without robust participation of these individuals in our health insurance marketplace, premiums will climb and the market will become destabilized.

NJPP supports restoration of this requirement at the state level in New Jersey if steps are taken to also ensure that insurance is affordable. To achieve that goal we urge that S-1877 be amended to require that all revenues generated by the penalty be used only in ways that will make insurance more affordable, such as for state premium subsidies or to help fund reinsurance.

We also recommend that S-1878, which would establish a reinsurance plan and is also being considered by the committee today, be passed at the same time. We believe that the combination of these bills would create a synergy that would substantially reduce premiums for New Jerseyans. It would also be smart to allocate at least $2 million for outreach to make insurance more accessible, attract healthier people, and maximize federal funds.[1]

Because insurers need time to adjust their rates for next year, this has become an urgent matter. Unless legislation is enacted within the next four months to address this problem, next year about 150,000 middle class New Jerseyans will have to spend much more in premiums, thousands more will become uninsured, state charity care payments will increase and New Jersey will lose federal Medicaid funds.

Unfortunately, some of this is already happening. Even before the federal penalty was repealed, premiums for most plans this year in New Jersey went up by 8.5 percent[2] (as part of an overall increase of 22 percent[3]) because the Trump administration threatened to weaken the enforcement of this requirement. This affected nearly half of everyone in the individual market because these consumers exceeded the income guidelines for subsidies.[4] We estimate they will pay up to a stunning $65 million more in premiums this year.

That means the average person in the marketplace paid $400 and a four-person family paid $1600 more this year just due to the weakening of the federal provision. Those costs could double next year without a shared responsibility penalty.

The long-range implications of not replacing this provision are staggering. Based on our analysis of national data from the Congressional Budget Office,[5] premiums in New Jersey will increase 10 percent a year in most of the next 10 years, and about 340,000[6] residents will become uninsured. Because the largest decrease in coverage would be in Medicaid, the state would also lose billions in federal matching funds. At the same time, we can expect a major increase in state charity care payments, which have been reduced by more than half due to the ACA.

Restoring this penalty is one of the most cost-effective ways that the state can reduce premiums since it costs the state nothing other than administrative costs and avoids a major loss in federal funds.[7] Another advantage is that very few New Jerseyans would be affected by the penalty. About 189,000 New Jerseyans paid the penalty in 2015 which meant that about three-fourth of all the uninsured were exempt from the federal penalty. These households represent only about five percent of all tax filers.

Under a state penalty even fewer people might be affected, depending on the state policies that are established. For example, the bill understandably exempts individuals who earn less than the income threshold income for state taxes ($10,000), which is twice as low as the federal threshold ($20,000). That exemption alone could reduce the number of persons who would have to pay the penalty by over 40,000.

The mandate also would encourage many of the uninsured to seek insurance that is affordable which they may not know about. National research shows that about half (54 percent) of everyone uninsured and eligible for a plan in the marketplace would be better off financially if they bought a bronze plan rather than paid the penalty.[8]

Endnotes

[1] State Medicaid outreach funds would receive a federal match of 50 percent.

[2] New Jersey Business, Majority of Horizon Individual Premium Increases Due To Federal Changes, October 17, 2017, based on Horizon charges, https://njbmagazine.com/njb-news-now/majority-horizon-individual-premium-increases-due-federal-changes/

[3] Raymond Castro, Sabotage of the Affordable Care Act Puts Middle-Class New Jerseyans in the Crosshairs, November 21, 2017, https://www.njpp.org/healthcare/sabotage-of-the-affordable-care-act-puts-middle-class-new-jerseyans-in-the-crosshairs

[4] 400 percent of the federal poverty level which is $82,000 for a family of three, well below the state’s median family income of $95,000 in 2016.

[5] CBO, Repealing the Individual Health Insurance Mandate: An Updated Estimate, November 8, 2017, https://www.cbo.gov/publication/53300

[6] Raymond Castro, Ibid.

[7] The current payments are $695 per adult and $347 per child or 2.5 percent of family income, whichever is greater.

[8] Matthew Rae, et al, How Many of the Uninsured Can Purchase a Marketplace Plan for Less Than Their Shared Responsibility Penalty? November 2017.

Health Care for All New Jersey Kids

Posted on by Raymond Castro

The following is a summary of this report. For the full report in PDF format, click here.

As a new administration and legislature take the reins in Trenton, New Jersey has a historic opportunity to guarantee that all children in the state have health coverage.

New Jersey has already made progress toward this goal, but more can – and must – be done.

The state has reduced the uninsurance rate for children to 3.5 percent – a major accomplishment. But there are still 70,000 children who remain uninsured, and 20 states – including every Northeastern state but Maine – have even lower rates. What’s more, New Jersey has one of the largest disparities in health coverage between white and Hispanic children in the nation, with Hispanic kids more than 3 times more likely than their white neighbors to be uninsured.

Of these 70,000 uninsured New Jersey kids, half (35,000) are undocumented immigrant children who are not eligible for NJ FamilyCare coverage and an additional 12,000 are kids in middle-class families who can no longer buy into NJ FamilyCare, since New Jersey ended the buy-in program in 2014. The remaining 23,000 uninsured children are eligible for NJ FamilyCare but are not participating due to administrative barriers and a lack of intensive outreach.

NJPP’s report identifies 10 actions the state should take to make healthcare coverage through NJ FamilyCare accessible to all children, including:

  • Stop excluding children because of their immigration status
  • Reinstate the buy-in program for middle-class families
  • Remove administrative barriers that prevent eligible children from enrolling, like locking kids out of coverage for 90 days if a payment is missed

Insuring these uncovered children is not only a moral imperative for New Jersey, it is cost-effective, incremental, realistic and affordable – important considerations given the state’s bleak financial situation. In fact, investing in the wellbeing of these kids now will likely save the state money in the long run.

NJPP estimates it would eventually cost $66.5 million a year – or less than one half of one percent of all Medicaid expenditures – to cover the state’s undocumented immigrant children. That is a third-year cost; the first year cost to the state is much less, at $10 million. What’s more, these estimates do not include state savings that would be achieved in charity care, other federal funds the state can claim for emergency care, and long-range health and social savings resulting from better health for kids. NJPP recommends an additional $2 million in state funding for outreach – an excellent investment because the $2 million would be immediately matched, and then the state would obtain even more federal Medicaid funds to help cover the additional children who are enrolled. And there is zero state cost to reinstate the buy-in program for middle-class families (they pay the full cost of coverage).

Read the full report here.

ImpacTalk: NJPP’s Jon Whiten on Defending Health Care

Posted on by Jon Whiten

Attendees at Impact 2017 – the Center on Budget and Policy Priorities’ State Policy Conference – drew inspiration from ImpacTalks by State Priorities Partnership staff members about what drives their commitment to advancing equity and shared prosperity.

In this ImpacTalk, NJPP Vice President Jon Whiten shares the story of his organization’s pivotal role in the fight to defend the Affordable Care Act – and what that fight meant to millions of Americans, including someone close to Jon’s heart.

Sabotage of the Affordable Care Act Puts Middle-Class New Jerseyans in the Crosshairs

Posted on by Raymond Castro

To read a PDF version of this report, click here.

The Trump administration and Congressional Republicans’ sabotage of the Affordable Care Act’s health insurance Marketplace is driving up premiums and making insurance unaffordable for millions of Americans. In New Jersey, about 150,000 of the 341,000 people who buy insurance through the individual market will see an average 22 percent[1] – or $1,245 – increase in their premiums in 2018.

A typical four-person middle-class family will see their annual premium increase to about $23,000 for a mid-level plan next year – in addition to their deductible, copay and co-insurance – making it unaffordable for many families.[2] In all, these already-struggling New Jerseyans will face a total of $187 million in increased health care costs next year.[3]

One of the principal actions that President Trump and the Republicans in Congress took to undermine the Marketplace is defunding Cost Sharing Reduction payments, which will result in a loss of $166 million in federal funds to New Jersey insurers even though the insurers will still have to provide those subsidies to eligible consumers. Those subsidies are limited to a Marketplace customer who has an income below 250 percent of the federal poverty level ($51,000 for a family of three). In addition, Republicans in Congress have been unable or unwilling to pass legislation funding such payments.

The Trump administration has also issued conflicting statements on whether, or how well, the individual mandate will be enforced, and Republicans in the Senate propose to eliminate it entirely in the tax overhaul bill. The mandate is important because it results in healthier Americans obtaining insurance, which holds down the cost for everyone else insured in the Marketplace. Lastly, the Republicans in Congress have not extended the deadline for the Health Insurance Tax on insurers; without this tax revenue, $186 million in costs will be passed on to New Jersey Marketplace consumers.

New Jersey’s Middle Class Will See More Harm Than Peers in Other States

While most New Jerseyans in the individual market will be protected from these increases because they will still receive premium subsidies, almost half (44 percent) of the state’s residents in the individual market receive no subsidy, and therefore will have to subsidize their eligible neighbors plus bear the costs of their own increase.[4] This will be a much bigger problem in New Jersey than most states because it has one of the highest costs-of-living and average earnings in the nation. The resulting increase will likely leave many unsubsidized New Jerseyans uninsured.

These New Jerseyans do not receive subsidies because their incomes exceed four times the federal poverty level – or $81,700 for a family of three. While that income level may be a lot in lower-cost states, in New Jersey it is clearly middle-class and well below the median family income of $96,126.[5] This illustrates a deeper problem with using the federal poverty level to determine benefits, because this measurement does not consider dramatically different costs of living in states across the country.

Many of these New Jerseyans will have to drop their coverage entirely because it will be unaffordable, or they will pay their premium and not be able to afford other essentials like food and transportation. Another danger is that they will purchase plans that have a lower premium but higher cost sharing that they may not be able to afford when they need medical care.

New Jerseyans across the state will face higher premiums, but people residing in Congressional Districts represented by Republicans are more at risk than people in Democratic districts. The share of all non-elderly adults who face these premium increases is about a third higher in districts represented by Republicans (3.2 percent) than in districts represented by Democrats (2.4 percent). The total number of New Jerseyans harmed by these premium increases is higher in Congressional Districts represented by Democrats because they represent more districts (7-5).

New Jerseyans With Employer-Based Insurance Could Also Be Harmed

While middle-class New Jerseyans in the individual market will see the most direct harm, the pain could very well spread to many other New Jerseyans who currently have coverage through their employer. While these residents once had the peace of mind knowing that if they lost their employer coverage they could always purchase affordable insurance on the individual market, the dramatic premium increases that are resulting from this sabotage change that equation. In fact, about 2.6 million New Jerseyans have incomes above four times the federal poverty level. If these residents were to lose insurance through their employer, they may not be able to afford the new higher premiums in the individual market.

Older New Jerseyans Will Be Hit the Hardest

All age groups are affected by these premium increases, but older New Jerseyans will be harmed the most. Half (50 percent) of New Jersey residents in the Marketplace are over age 45 and over a quarter (27 percent) are over 55.[6] While the percentage increase for older New Jerseyans is about the same as their younger peers, on average they pay much more for insurance – so this is actually a much higher dollar increase. For example, a 62-year-old New Jerseyan making $49,000 will have to pay the full cost of insurance that, on average, will increase by $12,400 to $14,500 a year. That dollar increase is almost twice the state average in the individual market.

In addition, the out-of-pocket limit rises to $7,350 next year, increasing the total potential costs for this older New Jerseyan to $21,850 – almost half (44 percent) of his or her income. To make matters worse, the House Republican tax bill eliminates the medical deduction, which would further reduce coverage for these New Jerseyans.

Many Low-Income New Jerseyans Are Also At Risk

Over 27,000 low- and moderate-income New Jerseyans could also be harmed by other actions – particularly cuts to outreach, enrollment assistance and education. This will likely have the greatest impact on the approximately 338,000 New Jerseyans who are uninsured and, in most cases, eligible for Medicaid or premium subsidies.[7]

For example, federal funding for outreach workers in states like New Jersey that chose not to establish a state exchange was reduced by an average of 41 percent.[8] New Jersey’s cut was the biggest in the Northeast, 61 percent. In addition, advertising was cut by 90 percent nationally.

An estimated 27,000 New Jerseyans will not obtain coverage in the Marketplace next year unless other resources are identified to replace the outreach efforts that have been lost.[9]

These cuts come at the worst possible time because there is much more confusion this year than in the past, thanks to the Trump administration and Congressional Republicans’ repeated efforts to repeal and replace the ACA this year and the shortest-ever open enrollment window (it runs for just 6 weeks this year from November 1 to December 15).

Endnotes

[1] Weighted average premium increases as reported by Horizon and AmeriHealth for 2018

[2] Assumes the children are ages 6 and 8 and the parents are 35 and 36. Plans were reviewed in healthcare.gov. The highest and lowest plans were selected and the mid-point was calculated.

[3] Percent premium increase was applied to average premium in the marketplace in 2017, as reported by The Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services.

[4] New Jersey Department of Banking and Insurance enrollment report, Q22017

[5] U.S. Census Bureau, American Community Survey, 2016

[6] Kaiser Family Foundation, 2017 Marketplace Selections by Age, November 2016- January 2017.

[7] Kaiser Family Foundation, Distribution of Eligibility for ACA Health Coverage Among the Remaining Uninsured as of 2016.

[8] Preliminary Navigator Grant Awards, 2017.

[9] New Jersey’s share of marketplace enrollment was applied towards national estimate by Get America Covered, Trump’s Ad Cuts Will Cost A Minimum Of 1.1 Million Obamacare Enrollments, October 2017.

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