State Faces Nov. 16 Deadline To Notify Feds Of Intent, Readiness To Create Exchange
TRENTON – Legislation sponsored by Senators Nia H. Gill (D-Essex) and Senator Joseph Vitale (D-Middlesex) to implement an essential part of the federal health care reform law by creating a state health insurance exchange, a competitive marketplace where individuals and employers will be able to purchase health care coverage, was approved today by the full Senate.
Required under the federal Patient Protection and Affordable Care Act signed by President Obama in 2010, the health insurance exchange is the key to providing New Jersey’s uninsured and underinsured with affordable, quality health coverage. The exchange is a virtual marketplace – accessible on the Internet or by phone – that will allow individuals and small employers to directly compare health coverage options based on quality, cost and value and to purchase private health insurance. The federal government has set a November 16 deadline for states to declare their intention to create a state-based exchange or to cede control of the process to the federal government.
“This legislation is the key piece of federal health care reform that will provide access to coverage for hundreds of thousands of New Jerseyans who are without it, many of whom are working full-time jobs but still cannot afford insurance,” said Senator Gill. “A state-based exchange will ensure that when these individuals shop for coverage beginning in October of 2013, they will be able to purchase affordable, quality plans that best meet their needs. The state is facing a November deadline to demonstrate that we are prepared to create an exchange. To that end, we must move swiftly to ensure that we have a strong system in place so that our residents can purchase coverage and get the care they deserve.”
“Creating a health exchange, the centerpiece of the health reform law, is essential to ensuring that New Jersey residents have access to affordable, quality health care coverage,” said Senator Vitale, chair of the Senate Health, Human Services & Senior Citizens Committee. “With this legislation, we will create a simple, user-friendly process for obtaining insurance so that people are informed about their options and given seamless access to the type of coverage they need to keep themselves and their families healthy. The exchange will also provide for competition among carriers to create downward pressure on costs.”
The state-based exchange created under the bill (S-2135) would take effect in 2014 when most people will be required to have health insurance; enrollment would open in October of 2013. The exchange would allow an insurer to sell its plans on the exchange if it meets state criteria and federal standards. This exchange model will allow New Jersey to maintain regulatory control over insurance to the greatest extent possible, to respond to market conditions to ensure competition among carriers both inside and outside of the exchange and to define plans that best meet the needs of New Jersey residents.
For individuals seeking coverage, the exchange will allow them to determine eligibility and apply for federal subsidies – available to those with incomes at and up to four times the federal poverty level, $44,680 for a single person or $92,200 for a family of four, according to the Kaiser Family Foundation. It would also allow individuals to determine which insurance plan best suits their needs – comparing coverage, co-pays and premium cost. For small businesses, the Small Businesses Health Options Program (SHOP) created under the bill – to help employers enroll their employees in qualified plans – provides a way for companies to pool their resources to achieve the same bargaining power for insurance that large companies have long enjoyed. This will allow small businesses to purchase quality coverage for their employees at a lower cost.
“The cost of insurance is out of reach for far too many New Jersey residents, but will become accessible under the federal health care reform law. This bill is the key to providing a pathway to health coverage for our most vulnerable residents and for the thousands of people in our state who currently are an emergency room visit away from financial disaster,” said Senator Vitale. “We have addressed a number of areas which we believe will improve the legislation while also ensuring that New Jersey residents will be able to access quality and affordable health coverage.”
Senators Gill and Vitale sponsored a similar bill that was passed both houses of the Legislature earlier this year but was vetoed by the governor in May. The legislation (S-2135) approved today includes several changes from the previous bill to:
• remove the $50,000 annual salary for exchange board members;
• clarify that the compensation for the executive director of the board cannot exceed the compensation of a cabinet-level official in New Jersey, which is currently $141,000 annually;
• add two public members to the board of directors of the exchange to allow for additional input and expertise from stakeholders; these individuals would also be subject to the board’s conflict of interest requirements barring them from employment in the health care and health insurance industries while serving and for a period of two years thereafter; and
• clarify that the exchange may, but is not required to, create and offer a Basic Health Plan.
The exchange would be governed by a board of 10 members to include appointments by the governor, the president of the Senate and the speaker of the Assembly of individuals with knowledge and expertise in specific areas, as well as to include the commissioners of the departments of Banking and Insurance and Human Services, or their designees, as ex-officio non-voting members.
“With 1.3 million uninsured in New Jersey we are facing a health care crisis. Establishing a state-based exchange will give us the ability to leverage high-quality affordable health care coverage for the uninsured and for those who are underinsured in the Garden State,” said Senator Gill. “It is critical that we move forward with this plan and resist efforts to politicize the process. Our collective goal must be to implement public policy that will offer the greatest benefits and protections to the residents of our state.”
To date, the state has received two federal grants designed to assist in the exchange planning and creation, totaling $8.7 million.
The Senate approved the bill by a vote of 21-17. It next goes to the Assembly for consideration.