As further demonstration that healthcare is a priority for the citizens of New Jersey, Governor Murphy announced on Friday, March 22 that New Jersey will join 12 other states, including neighboring state New York, in hosting a healthcare exchange for its citizens rather than direct those citizens and New Jersey dollars to the Federal Exchange. As of 2021, the state-based exchange would facilitate achievement of goals established ten years ago under the Affordable Care Act prior to amendments to that law adopted by President Trump. Critical elements to the New Jersey state-based exchange would include the following:

  •  coverage of pre-existing condition;
  •  allowing dependent coverage until age 26;
  •  coverage of 10 essential benefits, including out-patient care, emergency services, hospitalization, maternity and newborn care, mental health and substance abuse disorders, prescription drugs, rehabilitative services, lab services, preventative and wellness, and pediatric services;
  •  prohibiting lifetime and annual limits on health coverage;
  •  requiring coverage of preventative services at no cost to policyholders.

Murphy and his supporters, including Commissioner, New Jersey Department of Banking and Insurance, Marlene Caride, predicts that a state-based exchange would reduce premium for New Jersey policyholders, depending upon the details of the state-based exchange system. In other jurisdictions where a state has hosted an exchange, reduced premiums for individuals not eligible for federal subsidies have been realized. Moreover, it is anticipated that a state-based exchange will reduce premium in the individual health benefits marketplace by encouraging healthier New Jersey policyholders to participate in the exchange.

Commissioner Caride, who also spoke during Friday’s announcement by Governor Murphy, said that the state needs to protect the stability achieved by legislation last year to maintain an individual mandate and to establish a reinsurance program, both of which have been undercut by President Trump’s ACA amendments. Interestingly, Caride further states that the over $50M being contributed by the state of New Jersey to the federal government from use exchange fees for New Jersey residents who participate on the federally facilitated marketplace, would be put to better use to establish state-based exchange and to finance robust outreach and education to New Jersey residents in need of healthcare.

Creation of a state-based exchange is just the next step in a long list of healthcare reforms implemented by Governor Murphy and Commissioner Caride since taking office in 2018. Each of these steps have been designed to stabilize the health insurance marketplace in New Jersey and to enhance availability and affordability of care for New Jersey residents. Murphy’s goal is to establish an exchange effective in 2021 which is somewhat ambitious in light of the federal regulatory requirements which much be satisfied in order for the state exchange to be available to New Jersey residents by the fall 2020 enrollment period for coverage effective in 2021. In part, Murphy’s decision to host a state-based exchange was to enhance more control over enrollment period, design plans and the exchange website for individuals and small businesses purchasing plans on the state exchange.

In addition to creation of a state-based exchange, in his executive order, the Governor has also proposed codifying in state law the protections afforded by the ACA addressed above. These mandates will further assure the viability of the New Jersey insurance marketplace which is critical to the success of the ACA. In addition to establishment of a reinsurance program, and state-based implementation of a requirement for individuals to have coverage and control over plan management of the exchange in New Jersey, Governor Murphy also provided substantial protection to New Jersey consumers by eliminating so-called “hidden providers” who charge out-of-network fees to insureds at in-network facilities. See the Out-of-Network Consumer Protection, Transparency, Cost Containment and Arbitration Law, effective August 30, 2018. See N.J.S.A. 26:2SS-1 et seq. Further, the law created a negotiation and “baseball style” arbitration system to limit the charges of out-of-network health care facilities and provides for services rendered to members on an emergency basis.

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