Three policies in The Garden State aim to shore up the individual insurance market.
There's currently only one state in the country that has enacted three key policies to stabilize its Affordable Care Act markets.
The third prong in New Jersey's triad strategy fell into place Thursday, when the Trump administration approved the state's waiver request to establish a reinsurance program that's projected to make premiums 15% cheaper next year than they would be otherwise.
Although other states had already established their own reinsurance programs under ACA waivers, New Jersey is the first to combine such an initiative with two other prongs: an individual mandate and restrictions on short-term health plans.
In this sense, The Garden State has responded to the Trump administration's loosening of restrictions on health insurance policies by imposing stricter standards on the state level—an agenda that could serve as a blueprint, at least for fellow blue states.
"In spite of the President's attempt to destroy access to health care, New Jersey now leads the nation in preserving the ACA while reducing premiums," said state Sen. Joseph Vitale, a Democrat, as NJ Advance Media reported.
👏 to New Jerseyans, who will see their premiums in the individual market ↓ by about 15% from the expected premiums because @NJGov took action to address the failures of Obamacare. Today, @CMSgov approved NJ’s 1332 State Innovation Waiver. https://t.co/xvX4kcVZLW— Administrator Seema Verma (@SeemaCMS) August 16, 2018
Here's a brief overview of New Jersey's three-pronged approach:
- Reinsurance waiver: The waiver granted Thursday allows New Jersey to establish a reinsurance program partially funded by pass-through dollars from the federal government. It resembles similar waivers granted to Wisconsin and Maine earlier this year and to Alaska, Minnesota, and Oregon last year. Maryland has an application pending. The details differ from state to state, but New Jersey's reinsurance program will reimburse insurers of high-risk enrollees for 60% of coinsurance on claims of $40,000-215,000, according to a Centers for Medicare & Medicaid Services fact sheet.
- Individual mandate: Congress zeroed out the financial penalty associated with the ACA's individual mandate on the federal level, effective next year. But state lawmakers in New Jersey responded by passing a state-level individual mandate, which Gov. Phil Murphy, a Democrat, signed in May.
- Short-term plans: Trump administration officials have touted short-term limited-duration health plans—which will soon be renewable for up to three years, rather than being capped at three months—as an affordable alternative to ACA-compliant options. In an op-ed for The Washington Post this week, Health and Human Services Secretary Alex Azar wrote that such plans "can be a good option for many Americans priced out of Obamacare's regulations." But policymakers in New Jersey (as well as New York and Massachusetts) have imposed restrictions that effectively ban such plans over concerns that they're too skimpy, as Bloomberg reported.
More details on the ACA waivers in New Jersey and other states are available on the CMS website.
Steven Porter is editor at HealthLeaders.