Christie’s Decision on Health-Benefits Exchange Probably Won’t Change Insurance Choices

After years of debate over whether the state would play an active role operating a health-benefit exchange under the Affordable Care Act, Gov. Chris Christie’s decision last Friday to completely hand over responsibility to the federal government will probably make little difference in determining what insurance plans will be available in New Jersey starting Jan. 1.

Some expressed concern that New Jersey insurers will now have to deal with two different layers of government bureaucracy -- which might eventually lead state officials to consider taking a more active role in the exchanges. The decision by Christie applies only to 2014 and could be revisited.

Still, much work remains to be done by insurers and government agencies between now and October 1, when the exchanges are scheduled to start enrolling individuals and small businesses. And state healthcare advocates say they will continue to be involved, working with federal officials on behalf of New Jersey to make sure eligible residents sign up for coverage.

Once Christie decided in December to veto the second of two bills that would have established a state-run exchange there was little difference between having a state exchange and a federal-state partnership, said Raymond J. Castro, senior policy analyst for New Jersey Policy Perspective, a think tank focused on low-and middle-income residents.

In making the announcement, Christie emphasized several areas where the state is cooperating with federal officials, including the state decision in December to pick a benchmark for the essential health benefits to be provided through the exchange.

Both options allow any plan that meets the essential health benefits benchmark to be offered on the exchange, Castro said.

The exchange will be a marketplace to buy insurance for those who aren’t covered by their employers or don’t receive government-provided insurance like Medicare and Medicaid. The primary way to access the exchange will be a website where consumers and small business owners will be able to compare plans and determine whether they are eligible for subsidies.

The exchange is expected to clearly list differences between what each health plan offers and how much it will cost. Some people will also be able to turn to “navigators,” organizations that will provide information about what options are available.

Castro expects that the benefits offered by the plans will be similar, but said costs will differ. For instance, plans with lower monthly premiums may cost more, once higher deductibles – the out-of-pocket costs before insurance payments start -- are taken into account.

The federal government will now be in charge of all aspects of New Jersey’s exchange, including determining which plans are offered and what will be done to reach out to consumers; operating the exchange website; designing the insurance application; picking and funding the “navigators” that will guide residents through the process; determining eligibility for subsidies; and enforcing the mandate that everyone eligible for the benefits through the exchange must purchase coverage or pay a penalty.

The exchange is scheduled to start enrolling residents on October 1, so that they can receive health coverage starting on January 1, 2014.

Joel Cantor, director of Rutgers University’s Center for State Health Policy, said the state role in a federal exchange will still be important. He co-wrote a 2011 report estimating that 362,000 additional state residents will buy insurance through the exchange and through the individual insurance market.

“There’s still a huge role for the states, even in the entirely federally facilitated model,” Cantor said. “The state will still have a role in reviewing premium rates” to ensure that they comply with state law.

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