New Jersey is among four other states who are making the move to give the state full control over its individual health insurance market. Back in June, Governor Murphy signed legislation that would set up state-based healthcare in New Jersey for 2021. Murphy said this shift will make healthcare more accessible, accountable, and responsive to consumers. It will also provide protection against any repeal or replacement of the Affordable Care Act from the federal government.
By definition, state-based healthcare (often referred to as state-based marketplace) means the state is responsible for performing all marketplace functions for both the individual marketing and the Small Business Health Options Program (SHOP). Consumers, small employers, and their employees apply for and enroll in coverage through their state’s marketplace website.
Currently, New Jersey uses the federal marketplace. By transitioning to a state-based exchange, the state will be able to set enrollment periods, access data that can be used to better regulate the market, and New Jersey will be able to operate an exchange that is tailored and efficient for New Jersey residents. A plan like this would benefit the hundreds of thousands of New Jerseyans who earn too much to qualify for Medicaid but don’t have coverage through their jobs.
The new law will transfer the current federal exchange user fee (3.5 percent of premiums) to a 3.5 percent state-based exchange user fee. This added revenue for New Jersey will allow the state to dedicate funding toward outreach and enrollment efforts. Increased funding could improve healthcare accessibility and stability for New Jersey families.
Nevada, New Mexico, Oregon, and Pennsylvania have all been seeking to run their own systems, and they see it as an opportunity to save money. For example, Nevada, which began this process two years ago, expects to save upwards of $8 million in the first year of the program and nearly $19 million by 2023.
New Jersey may face challenges when getting this new system up and running, including from. the technology it takes to do so and the New Jersey law that requires the state to integrate Medicaid enrollment into the system. But the larger challenge that consumers care most about is the cost. Major changes must be made in the exchange to reduce the cost for insurance. It’s crucial that the system run smoothly right off the bat when enrollment opens to avoid glitches and conflict.
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