N.J. insurance chief quizzed on Obamacare options

Posted: December 07, 2013

TRENTON New Jersey's insurance commissioner testified Thursday before a state Senate committee that no insurers in the state have yet opted to continue selling plans that are slated to end because they do not comply with the Affordable Care Act.

About 800,000 New Jerseyans - including 650,000 in the small-employer market - have the plans, which won't be renewable next year under the new health care law.

Facing pressure after promising that consumers could keep plans they liked, President Obama announced Nov. 14 that insurance companies could sell the plans for another year, if states allowed it.

New Jersey's banking and insurance commissioner, Ken Kobylowski, announced last week that the state would let insurers choose whether to keep offering the plans.

"We were offering consumers greater choice in the marketplace," Kobylowski said Thursday, addressing the Senate Commerce Committee during a hearing on his decision.

While insurers have not decided what step to take, even if they do continue the plans the options won't be the same, Kobylowski said. "If you have an apple today, you're not going to be able to buy an apple tomorrow," he said.

Not discussed during Thursday's hearing was an option one policy analyst said would allow consumers to extend their plans through 2014, if they renew by Dec. 31.

The option is "not widely known," said Raymond Castro, senior policy analyst with New Jersey Policy Perspective, a left-leaning think tank. Horizon Blue Cross has said some of its members are exercising the early-renewal option, allowed by state law.

During the hearing, committee Chairwoman Nia Gill (D., Essex) repeatedly asked Kobylowski what his department was doing to educate consumers about their options.

New Jersey has 1.1 million uninsured residents. Excluding undocumented immigrants, 900,000 of them are eligible to buy insurance through the federal "exchange," or marketplace, or may qualify for Medicaid.

Gill also pressed Kobylowski on whether he intends to spend $7.6 million in federal money that, according to federal officials, was awarded to New Jersey to plan for an insurance exchange. Gov. Christie last year rejected a state-run exchange.

"We are in active discussions with the federal government on the use of those funds," Kobylowski said. He said the department - which fields questions through a "very robust consumer call center" - needs permission from the federal government to use the money for "anything other than planning and implementation."

Several groups have argued that the money could - and should - be used for educational purposes.

Consumers with plans that don't comply with the Affordable Care Act may not realize they can get more comprehensive and "in many cases, more cost-effective" coverage with a plan from the federal marketplace, said Maura Collinsgru of New Jersey Citizen Action, a consumer watchdog group.

Of the 800,000 New Jerseyans with plans due to be canceled next year, 150,000 are in the individual market, including 109,000 with "basic and essential" plans that have annual caps on office visits, out-of-hospital testing, and wellness services, and don't provide comprehensive coverage.

Those plans cannot be renewed in their current form by insurers due to the expiration of a federal waiver. The Affordable Care Act banned dollar-based caps on certain services, but the government issued New Jersey a waiver through the end of 2013.

Horizon Blue Cross, which offers 90,000 of the state's basic and essential plans, said last week it "had every intention to renew the plans" after Obama's announcement, but the federal government had refused to extend the waiver.

While consumers with basic plans will not find as limited a coverage option through the marketplace, many are low-income and would qualify for subsidies for comprehensive plans, Joel Cantor, director of the Center for State Health Policy at Rutgers University, testified.

Small businesses, Cantor said, may see costs rise if their plans are not renewed, depending on their demographics.

"Many of them want to keep their plans," said Christine Stearns, vice president of health and legal affairs for the New Jersey Business and Industry Association. She said employers "are needing to make decisions quickly. . . . There is a significant amount of confusion."

Insurers are "working very hard with attorneys and actuaries" to determine whether to continue plans, said Wardell Sanders, president of the New Jersey Association of Health Plans.

"I think there is a dearth of information around what folks' options are," he said. "Part of it is, carriers are still trying to make up their minds."


mhanna@phillynews.com

609-989-8990

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