Individual Mandate & Reinsurance Fund Would Provide Stability To Marketplace
TRENTON – Acting to protect New Jersey from President Trump’s attempts to dismantle the Affordable Care Act and to preserve the health care benefits the law is providing to the state’s residents, Senator Joe Vitale and Senator Troy Singleton are advancing two bills that would maintain the viability of the individual mandate and establish a reinsurance fund to help stabilize the insurance market. The measures were approved by the Senate Budget & Appropriations Committee today.
“Through the Affordable Care Act, and the accompanying expansion of Medicaid and the federal subsidies, New Jersey’s uninsured rate dropped from 13.2 percent to 8.7 percent over six years, the lowest rate in three decades,” said Senator Vitale. “The assault on the ACA by President Trump puts the newly insured at risk of losing their health care coverage. These bills will help stabilize the insurance market and preserve the viability of the individual mandate. Having as many people as possible in the insurance program makes it more affordable for everyone.”
The ACA, has expanded health insurance coverage to more than 800,000 New Jersey residents, including some 340,000 who purchased policies through the individual market.
The bill maintain the mandate, S-1877, entitled the “New Jersey Health Insurance Market Preservation Act,” would reestablish the recently repealed “shared responsibility tax” that is at the core of the mandate. The legislation would require every New Jersey resident to obtain health insurance coverage or pay a fee, essentially adopting the rules of the ACA.
Under the individual mandate, most Americans were required to purchase health coverage. But starting January 1, 2019, there is no fee associated with the individual mandate, a “naked attempt to undermine the integrity and viability” of the law, Senator Singleton said.
“The federal tax law recently adopted by President Trump included the repeal of the individual mandate,” said Senator Singleton. “The magnitude of the consequences of that decision will usher in an era of higher health insurance costs for everyone and lower health coverage rates.”
The fee imposed by the bill would be assessed and collected in the same manner as the income tax, with the Commissioner of Banking and Insurance establishing a program for determining whether to grant exemptions for “ religious conscience or hardship.”
The other measure, S-1878, would allow for a reinsurance program to bring more stability to an insurance market that has been destabilized by the actions and inactions of the Trump Administration. The legislation, entitled the “New Jersey Health Insurance Premium Security Act,” would direct the Commissioner of Banking and Insurance to apply for a federal waiver of provisions of the ACA to support a reinsurance program to control premiums in the New Jersey.
It would establish a board that would work with the state insurance commissioner to design the plan. The board would also come up with a fee structure to assess insurance carriers to fund the program and the money would be held in a newly created fund under the Treasury Department
“The ACA’s ‘Section 1332 waivers’ offer a promising avenue for states to create reinsurance funds to bring more stability and certainty to a marketplace that has been undermined by the Trump Administration, driving up consumer costs,” said Senator Vitale. “We seize the opportunity to take the actions available to hold down expenses for services that improve health care middle class families and others.”
States can obtain a state Innovation Waiver from the federal government – also called a 1332 waiver – to establish a reinsurance program to lower premiums, offsetting increases due to the mandate repeal and other federal actions.
Senator Vitale and Senator Singleton said it is important to move on these bills in a timely way in order to comply with federal requirements.