Testimony in support of a Health Insurance Assessment in New Jersey

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The New Jersey Senate and Assembly are holding hearings this afternoon on a bill, S2676/A4389, that would replace the national ACA tax on health insurers repealed by Congress late last year with a state tax that would raise some $300 million per year. The bill dedicates the funds to improving health insurance affordability, focusing mainly on low-income New Jerseyans.

The bulk of the money will likely be used to add state subsidies to federal subsidies for health plans sold in the ACA marketplace -- possibly as early as 2021 --  with a portion going to fund the existing reinsurance program that reduces individual market premiums for those who earn too much to qualify for subsidies.

BlueWaveNJ, of which I am a member, submitted the testimony below on behalf of the bill.

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.