The coronavirus pandemic has ravaged the state in many ways, and with significant downstream effects. Amid the pandemic, historic unemployment has led to more than 100,000 New Jerseyans losing health insurance. As a physician who leads a hospital that serves among the most vulnerable communities in the state, the reality of rising uninsurance and its potential impact on public health is daunting.
Soaring job losses and health coverage are not unique to New Jersey. States across the country are seeing unemployment in record numbers, and studies forecast that more than 10 million people in the United States will lose employer-sponsored health insurance this year because of the ongoing public health crisis.
In New Jersey, policymakers are taking action to stem the rising tide of uninsured and to improve health insurance affordability for residents by building on the success of the Affordable Care Act.
The Legislature is advancing a bill, sponsored by Sen. Joe Vitale (D-Woodbridge) and Assemblyman John McKeon (D-Madison), A4389/S2676, that will provide needed financial help to New Jersey residents to purchase health insurance. It advances a policy that Gov. Phil Murphy called for in the state budget presented earlier this year. The legislation will provide state subsidies to residents — beyond those provided by the federal government — to lower the cost of buying a health insurance plan when the ACA Open Enrollment Period begins this fall.
Passing the bill in July means most residents shopping on the State-Based Marketplace will have access to state subsidies to purchase their health plan beginning Nov. 1. Mirroring the income thresholds for federal tax credits under the ACA, individuals earning $51,040 or less, and a family of four earning $104,800 or less, will get the additional financial help provided by the bill.
This will allow residents without coverage to enroll in a health plan, and to access the services the ACA made possible — with coverage for all of the essential health benefits including preventive care, routine checkups and prescriptions, emergency and mental health care, hospitalizations and more.
In addition to providing access to life-saving health care services, I believe that expanding health insurance coverage will further improve the health of our hospital systems. As a result of increased health care coverage, the ACA steeply reduced the amount of charity care provided by New Jersey hospitals. Increasing insurance coverage in the state means more reliable funding for health care providers to sustain our operation at an uncertain time, especially those who serve vulnerable populations. To see thousands of people drop out of coverage would be putting New Jersey residents’ access to care at a risk at a time when they may need it the most. These subsidies would help prevent that.
In recent years, New Jersey has done significant work to support the gains made by the Affordable Care Act and to safeguard its protections for families, including those with preexisting conditions. Last year, following the passage of a reinsurance program and continuation of a Shared Responsibility Requirement, New Jersey made the decision to create its own ACA Marketplace. When the Marketplace opens this fall, that will mean an expanded Open Enrollment Period from six weeks to three months, and the ability for the state to set other policies that will deliver improved results.
Now, the state has an opportunity to build on those important actions.
An estimated 70% of the uninsured in the state are below 400% of the federal poverty level — some of whom cannot afford coverage with available federal Premium Tax Credits and could purchase a plan with added state help. The savings to a family, based on estimates, could be up to $ 4,500 a year.
As of 2018, 18% of Hispanics (307,100 individuals), 9% of Blacks (87,200 individuals) and 5% of whites (174,000 individuals) were uninsured in New Jersey.
According to the Kaiser Family Foundation, one in five uninsured adults in 2018 went without needed medical care due to cost. People who are without insurance have less access to care and are more likely to forego preventive care, treatment for chronic conditions or needed medical attention.
Conversely, research shows that gaining health insurance improves access to care, leads to identification and earlier treatment of illness, and improves health outcomes.
Lowering uninsured rates will also improve the stability of our health care system. Statistics show that, when the uninsured rate declines, uncompensated care costs as a share of hospital operating expenses are also reduced. From 2013 and 2015, when the country’s uninsured rate fell from 14.5% to 9.4%, uncompensated care costs were reduced by 30%. This better allows institutions who serve the most vulnerable to continue doing so even during the worst of public health and economic crises.
This bill is good policy, but, more than that, it is a compassionate one that recognizes the value of health care access for New Jersey residents.
Current subsidy-eligible residents could benefit from enrolling in their same health plan at a lower cost, or from enrolling in a more generous plan that reduces their out-of-pocket costs (deductibles and coinsurance, for example) for health care services, according to estimates. Importantly, subsidies would make it possible for tens of thousands more residents to access a plan with no monthly premium cost, including many who will continue to have access to cost sharing reductions. Even those purchasing coverage who are not eligible for a subsidy may experience lower rates as a result of a healthier risk pool.
The state will fund the program by keeping in place the Health Insurance Assessment as it sunsets at the federal level, transferring the funding to the state to fund subsidies, reinsurance and other worthy programs designed to lower health insurance costs. In other words, this simply replaces an assessment on health plans that currently exists, but was set to expire by the end of the year.
Ten years after passage of the ACA, there is more to do. New Jersey is leading the way in taking the next steps, and there could not be a more critical time.
Dr. Shereef Elnahal is CEO and president of University Hospital in Newark and a former commissioner of the New Jersey Department of Health.
