As ACA changes begin, N.J. eyes local mandate

In light of the federal repeal of the individual mandate for health insurance coverage, the state Legislature is eyeing implementation of state-level mandates.

The hope is that, by mandating coverage, and mandating certain benefits, to allay  the threat of increased premiums.

The latter mandate could encompass basic and essential coverage, a return to existing laws from 2003 in the state, prior to the creation of the Affordable Care Act.

Ward Sanders, president of the New Jersey Association of Health Plans, testified on the topic at the Assembly Financial Institutions and Insurance committee hearing Monday.

“We all do this delicate dance of trying to address comprehensiveness and affordability,” Sanders said.

While the mandate itself isn’t a bad idea, coverage wouldn’t solve the affordability problem, he said.

Even though there is greater utilization overall, based on trends uncovered by the ACA, which should translate into lower costs, insurers would also have to consider pricing based on what is mandated in the coverage, Sanders said.

Ray Castro, with New Jersey Policy Perspective, said that, even before the mandate repeal, insurance premiums were slated to increase by just under 10 percent.

“Even before the federal provision was repealed, premiums for most plans this year in New Jersey went up by 8.5 percent (as part of an overall increase of 22 percent) because the (President Donald) Trump administration threatened to weaken the enforcement of this requirement,” Castro said. “This affected nearly half of everyone in the individual market, because these consumers exceeded the income guidelines for subsidies. We estimate they will pay up to a stunning $65 million more in premiums this year.”

Castro predicts that, with the loss of the mandate, premiums will continue to increase, as more and more individuals lose coverage. This will especially hit Medicaid coverage hard, and result in a loss of matching federal funding for the state. To compound the problem, the loss of coverage will turn back the clock by translating into greater use of charity care — which also gets federal matching dollars — which was halved in the state as the result of the Affordable Care Act.

Sanders aired on the side of caution, encouraging legislators to truly weigh the effects of the mandates.

“Not all mandate bills are created equally,” he said.

It remains to be seen what steps the Legislature will take.