If you live in New Jersey and buy health insurance benefits out of your own pocket, you are aware of the high price tag. Bottom-of-the-barrel coverage with limited networks and no dental, eye, or prescription medicine coverage (if you’re in good health and not far past age 40) starts at about $250 per month per person. Put your spouse on the plan and the cost doubles.
And while you can write off self-paid benefits at tax time (provided you’re not eligible for benefits coverage elsewhere), it still means that if you are married without children, you are going to pay at least $6,000 (and probably more like $13,000, if you get a good plan) per year, to hedge your bets against going to the hospital or needing long-term treatment for a chronic condition.
At the federal level is the fight to make healthcare coverage more affordable. And while the battle often seems to be one step shy of an actual fistfight between politically polarized camps, the Affordable Care Act has at least opened the door for a more competitive marketplace in which consumers will be able to shop around for better coverage at better rates — and to attain group coverage, even if they are not employed or part of a current group-eligible plan.
This is where the healthcare exchange (a.k.a. a health insurance exchange) comes into play. As part of the Affordable Care Act, states are required, by January 1, 2013, to devise their own methods of operating healthcare exchanges, or the federal government will institute a method for them.
Jeff Brown, healthcare campaign coordinator at Newark-based NJ Citizen Action, says officials, legislators, healthcare experts, and informed citizens do not want federal intervention in New Jersey’s healthcare exchange development. It is the one thing about the national healthcare debate, he says, that has broad, bipartisan support.
NJ Citizen Action, a statewide public policy watchdog group, will be part of a free forum on the state’s healthcare exchange on Sunday, February 26, at 12:30 p.m. at the Unitarian Universalist Congregation of Princeton, 50 Cherry Hill Road. The forum is open to the public and will discuss the options New Jerseyans face in developing a state-run healthcare exchange. Visit www.uuprinceton.org.
Brown, a Lawrenceville native, earned his bachelor’s in English from Rutgers in 2009. The son of a chemist, he went into the public administration field by working on the election campaigns of ex-Governor Jon Corzine and Pennsylvania Congressman Joe Sestak. He joined NJ Citizen Action in September.
At its core, a healthcare exchange is a competitive marketplace through which consumers can search for plans that better fit their budgets, Brown says. But more than being an information outlet, a healthcare exchange is designed so that individuals can get group rates on their benefits.
Right now, the only way to get a group rate is to work for a company that covers a lot of people under its benefits plan. But the Affordable Care Act is built to give almost every American citizen access to affordable coverage. Hence, part of the deal comes with billions in federal subsidies to help those who meet certain low-level income guidelines offset the costs of coverage.
The current threshold for a family of three is $74,000 in annual income, Brown says. Under a healthcare exchange, individuals can get in on group rates without having to be part of an employer healthcare plan beginning in 2014.
Politics. The bill to fix how health insurance is sold in New Jersey cleared a state Assembly committee earlier this month and is now part of the legislative agenda. Brown says the bill, sponsored by Assemblyman Herb Conaway (D, Burlington), is getting enormous bipartisan support within the state legislature.
The Conaway bill favors the “active purchaser” model. Under this model, the state’s insurance exchange negotiates with insurers and allows only certain plans into the exchange.
Not surprisingly, the state’s healthcare industry trade groups prefer the “clearinghouse” or “open market” model, under which any insurer can sell plans to customers as long as their plans meet federally set minimum guidelines.
This approach is related to the healthcare exchange currently in place in Utah, which, though it has managed to cover most residents, is undergoing a revamp, because it has failed to bring costs down or make access to affordable coverage much better. They argue that an open market gives consumers more choices.
NJ Citizen Action strongly prefers the active purchaser model, as do the vast majority of New Jersey legislators, Brown says. Under that model states can vet potential insurers and weed out any plans deemed to be low-quality. Patients would have fewer, but better, choices.
The state, in fact, is looking to Massachusetts, where the active purchaser model established under former Governor Mitt Romney — currently seeking the GOP nomination to run for president — has managed to provide coverage for about 98 percent of the commonwealth’s residents.
Brown also says that legislators and NJ Citizen Action are working to keep trade groups and special interests from dictating what the language of the eventual healthcare exchange bill will say. Their input is wanted, Brown says, but few at the legislative level (at least for the moment) want insurers to decide how the system will work.
The benefit of the bipartisan support, Brown says, is that obstructive politics is not getting in the way. NJ Citizen Action is a nonpartisan organization, and Brown says the group is pushing to keep political rancor and posturing out of the bill. Something has to get done, he says, because if nothing is accomplished at the state level, the federal government will gladly step in. “There’s no indication that anybody wants that,” he says. “But this is new territory and there are different theories on how to do it.”
Governance. Along similar lines, Brown says the oversight of the healthcare exchange should be in the hands of those who have no direct stake in the matter.
Independent experts, such as retired healthcare executives familiar with benefits plans, are the ideal, and Brown says the language of the Conaway bill is specific in its attempts to avoid conflicts of interest and special interest intervention. If you serve on the board that governs the healthcare exchange, for example, you will not be allowed to work in any industry related to benefits coverage for at least two years.
“There will be billions of dollars in subsidies,” Brown says. “We don’t want insurers saying where it should go.” A small board, able to make quick decisions, is also a priority. The ultimate board will be part of — but not actually beholden to — the state Division of Banking and Insurance.
Small business. The self-employed will be able to get in on the individual-pool group rates under a healthcare exchange, Brown says. For businesses with 2 to 50 employees, there will be separate group rates for small employers.
What effect this will have on the state’s small businesses that already offer benefits coverage is to be determined. Brown says the question of whether small businesses will shed benefits plans is a common one, but he doubts anything will come of it.
“Currently there is nothing requiring these companies to cover their employees, so I don’t think merely improving access in the individual market will change anything,” he says. “Also, if you look at the evidence in Massachusetts, since their exchange became active, there has actually been a slight increase in the number of businesses providing insurance for their employees.”
Whatever happens, Brown says the state is working hard to avoid trouble brought on by the rampant coziness between governing bodies and special interest groups, which often act for their own benefit, and not that of the people. “It’s recognized that there’s a revolving door between special interests and government,” Brown says. “We don’t want that with this.”