New Jersey enacts an easy enrollment program for the uninsured

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New Jersey Governor Phil Murphy today signed a bill  (A674/S1646) establishing an "easy enrollment" program for health insurance, the New Jersey Department of Banking and Insurance announced this afternoon (a press release just arrived by email; I can't find it online yet). Update! - here it is.

Maryland pioneered "check the box" programs like this, in which the state prompts uninsured residents to indicate an interest in getting insured and provides help (to the extent creaky state bureaucracies can manage it) with getting an application started. Here is the guts of the initiative in New Jersey:

Through this program, uninsured and underinsured residents can indicate their interest in coverage for themselves or a household member on their tax return or through unemployment insurance benefit claims, which will be shared with the New Jersey Department of Banking and Insurance.    

As required by the legislation, the department will create a system to analyze the data collected through tax returns and unemployment benefit claims to determine a resident’s eligibility for health insurance coverage and ability to receive financial help through Get Covered New Jersey and proactively connect with qualifying residents to help them enroll. The law also permits the department to work with the Department of Human Services to determine an individual’s eligibility for NJ FamilyCare and share data with the agency for that assessment.       

Several things to note here. First, the prompt to seek health insurance will appear not only on the tax return but on an unemployment benefit claim. The latter is very important, as it comes at a moment when the applicant's income has dropped dramatically, qualifying many for Medicaid. In states that have enacted the ACA Medicaid expansion (e.g., New Jersey), eligibility is based on monthly income (currently $1563 for an individual, $3,191 for a family of four). During the pandemic, Kentucky had the Dept. of uninsurance pass applicant data to the state Medicaid agency, helping to drive a 14% increase in Medicaid enrollment from February to July 2020.

Second, the department collecting the data will share the data with the Dept. of Banking and Insurance, which runs the state ACA exchange (GetCoveredNJ), and with the Dept. of Human Services, which runs NJ FamilyCare, the state Medicaid program. The departments can determine eligibility for NJ FamilyCare or for subsidized marketplace coverage, if the enrollee gives permission for the various departments to share information. The bill statement emphasizes interagency coordination:

The bill requires the Commissioner of Banking and Insurance, in coordination with the Commissioner of Human Services, the Commissioner of Labor and Workforce Development, and the State Treasurer to develop and implement systems, policies, and practices that encourage, facilitate, and streamline determination of eligibility for insurance affordability assistance and enrollment in minimum essential coverage to achieve the purposes of the program.

Finally, because New Jersey (unlike Maryland) is one of a handful of states that implemented a state individual mandate to obtain insurance after the federal mandate penalty was zeroed out, the uninsured tax filer has a strong incentive to check the box, as obtaining insurance will get the penalty for going uninsured waived. For most respondents, obtaining coverage should be either free or very low-cost. In New Jersey's ACA marketplace, supplemental state subsidies, in concert with the major federal boosts to marketplace subsidies provided by the American Rescue Plan Act (which will expire at the end of this year unless Democrats manage to extend them, benchmark silver coverage with strong Cost Sharing Reduction is effectively free, or very close to it, at incomes up to 200% of the Federal Poverty Level ($25,760 for an individual, $53,000 for a family of four). 

This is a good strong bill that should reduce the uninsured population in New Jersey, currently just shy of 700,000. Its impact will be blunted somewhat if Democrats fail to extend the ARPA marketplace subsidies. But its chief impact will probably be in Medicaid in any case, which is unaffected by the level of marketplace subsidization.

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New Jersey takes strong action against ACA sabotage: A look-back

As Republican repeal of the ACA's individual mandate loomed last fall, potential remedies for states became self-evident, notwithstanding many political roadblocks. No one had ever challenged a state's authority to impose an individual mandate. And state reinsurance programs had already proved their worth and obtained federal funding.

New Jersey, with strong Democratic majorities in both houses of the legislature and a newly elected progressive governor, was one likely proving ground -- notwithstanding the mandate's unpopularity and the state's fiscal woes. Progressives committed to a working individual market and resumed progress expanding healthcare access were eager to see these remedies tried -- under the tight schedule imposed by insurers' June 20 deadline to file rate requests. The legislature came through, passing mandate and reinsurance bills on April 12. After a long and rather conspicuous silence, Governor Murphy signed them yesterday.

Below is a compendium of my posts and articles on this front, as well as outside efforts with BlueWaveNJ and the NJ for Health Care Coalition that I've been involved in. They address the fiscal challenges as well as the case for the bills.

Sabotage judo: States can turn individual mandate repeal to their advantage (12/14/18)
Impose a mandate and use the revenue to help fund reinsurance

How Gov. Murphy can protect NJ from Obamacare sabotage (NJ Spotlight, 1/17/18)
Specifics for New Jersey -- e.g. death spirals past

NJ for Health Care Coalition urges Gov. Murphy: Protect our care. Sign these bills

Update: Murphy signed both bills today!  The Star-Ledger' Susan Livio cites the Coalition letter linked to below.
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New Jersey Governor Phil Murphy has been notably quiet about two ACA-defense bills awaiting his signature -- one creating a state individual mandate, the other directing the Dept. of Banking and Insurance to seek federal funding for a reinsurance program for the individual market.

The bills passed both houses of the legislature on April 12; the Governor has until June 7 to act. His hesitation, if there's more to it than due diligence, may stem from fiscal worries about the reinsurance program, as I've noted before.

Today the NJ Coalition for Health Care, an umbrella group of advocacy groups, trade groups, and unions led by New Jersey Citizen Action, sent a letter to Governor Murphy urging him to sign the bills. 17 organizations signed, including BlueWaveNJ, a group I volunteer for. The text is available here.

In New Jersey, ACA reinsurance or....?

Here in Jersey, progressives are urging Governor Murphy to sign two bills designed to fend off Republican sabotage of the ACA. The first would establish a state individual mandate to replace the effectively repealed federal mandate. The second would seek federal funding for a reinsurance program for the individual market for health insurance, designed to reduce premiums by 10-20%.

If the two bills are enacted and the ensuing waiver application seeking federal funding for reinsurance is approved, the two measures should reduce premiums by 20-30%, compared to where they'd be if no action is taken. For more detail, see this writeup.

Governor Murphy is likely to sign the mandate bill, but there are indications that he may seek changes to the reinsurance bill. The problem is cost.

Rough projections are that revenue from the mandate would cover a third to half of the reinsurance program's costs, while the federal government picks up half or a bit more than half. The state could be on the hook for an additional $30-40 million per year. New Jersey is in dire financial shape;  Murphy has a lot of spending priorities, and a looming fight on his hand to raise new revenue.

State Senator Joseph Vitale is confident that if the program proves to need more funding by FY 2021, when the first bill to insurers comes due, a revenue source can be developed -- probably via an assessment on insurers. Murphy might seek to get that in writing, in the bill -- as it was in an early version.  He would do so by issuing a conditional veto, after which the legislature would have to vote on an amended bill by June 7.

I found myself mulling this evening: If the bid to stand up a reinsurance program fails, how else might the mandate revenue, projected at about $90-100 million per year, be deployed to boost healthcare access in the state? One answer might be simply to return the mandate revenue to those hurt most directly by rising premiums: enrollees in the individual market who don't qualify for federal subsidies (subsidized enrollees pay a fixed percentage of income for a benchmark plan and so are not directly affected by premium hikes). These are mostly people above the income eligibility threshold, 400% of the Federal Poverty Level (FPL). They also include people who are ineligible for subsidies because of an offer of insurance from an employer.

Two NJ healthcare bills awaiting Gov. Murphy's signature should reduce premiums by 20-30% in the individual market

On April 12, both houses of the New Jersey legislature passed bills to establish a state individual mandate (A3380) and a reinsurance program (S1878). The bills are designed to work in tandem to stabilize and reduce premiums in the individual market for health insurance.

It is not certain that Governor Phil Murphy will sign the bills. A mandate is a tax, and taxes are hard. The reinsurance program will cost the state some money, though not much -- probably an amount in the low tens of millions each year. But the payoff would be dramatic. Taken together, as outlined below, the bills can be expected reduce premiums in the individual market 20-30% compared to what they would be if neither bill is enacted.