TRENTON – With the Senate scheduled to vote Thursday on an affordable health insurance bill that would benefit lower-income residents and the uninsured, supporters and opponents pressed their cases today.
The legislation, S1319/A2171, known as the Health Benefit Exchange Act, is designed to improve health insurance quality, increase access to coverage, and reduce costs, according to a consumer coalition of about 70 organizations.
However, the plan – which as of today was not listed for a vote in the Assembly’s session Thursday – does not cut costs enough or provide enough choice for consumers, according to business groups.
Under this legislation, a seven-member board composed of state officials and public members would operate an exchange designed to allow participants to purchase affordable coverage.
Among other things:
Those with incomes between 133 and 200 percent of the federal poverty level could purchase essential coverage;
Small businesses could pool buying power to get better rates;
Hundreds of millions of dollars in matching federal funds could be leveraged;
The uninsured – many of whom essentially use emergency rooms for basic health care – would have access to coverage, hopefully reducing health care costs overall.
Supporters today said the program would spread out the risk and reduce the rate of premium growth. They said approximately 400,000 New Jerseyans would be covered in the first year, 2014, and eventually as many as 800,000 would be covered.
According to the coalition, there are 1.3 million uninsured in New Jersey, roughly one in every seven residents. Only three percent of the uninsured directly purchase insurance, they said. About half of the small businesses in the state offer health insurance.
On top of all that, they said, workers’ share of premiums has risen about 150 percent since 2000, and in the individual market more people are buying only bare-bones policies.
“About half of all foreclosures were caused by medical costs, and most of the families had health insurance,’’ said Ray Castro of N.J. Policy Perspective.
And Evelyn Liebman of AARP told a story of one woman whose policy “will wipe out her life savings in a year.’’
Yet, opponents see a different side to the story.
“New Jersey’s exchange must be set up to encourage competition and make a wide array of insurance plans available for small businesses and individuals,” said Christine Stearns, vice president of the N.J. Business and Industry Association. “The exchange created by this bill does not do that.”
She said in a prepared release today that New Jersey’s small employers understand the need for health insurance, but find the process of shopping for coverage confusing and time-consuming.
Although she said that NJBIA initially supported the legislation, the proposal became more bureaucratic and expensive.
To correct that, her group offered three ideas:
Have an open marketplace allowing all insurers to participate; limit the bureaucracy; and employers must be given more of a voice on the governing body and an advisory committee.
“Currently, none of the board seats are dedicated, and the bill only gives small employers one seat, out of fifteen, on an advisory committee,” Stearns said.
“Under this bill, there is no incentive for the exchange to operate efficiently because it can tax insurance plans sold inside and outside of the exchange. This broad authority could adversely affect employers and individuals purchasing coverage outside of the exchange,” she said.
Stearns said in an interview that initially her group liked the idea of a state-run exchange as opposed to one run by the federal government. However, as the bill wound its way through committees it became one that her group could not support.
“Affordability is a big issue for small employers,’’ she said, and her group believes the current bill is not focused enough on ensuring small businesses have access to more affordable plans.
Also, after the first year the program has to be self-sufficient, and NJBIA is not convinced that will be possible the way the exchange is structured.
Supporters, however, said some of those very concerns – reducing the confusion, streamlining processes – will be achieved over time.
And the other concern they raised as well is intervention by the federal government.
Jeff Brown of N.J. Citizen Action said that on Jan. 1, 2013, Washington, D.C., will assess New Jersey’s progress toward beginning the exchange by Jan. 1, 2014. He said if the federal officials are dissatisfied with New Jersey’s progress, they could conceivably step in and run the program.
It would be better, he said, “to control our own destiny.’’