NJ Spotlight

NJ Health Insurance Exchange Clears Committee

Amended legislation addresses many of the issues lawmakers, advocates, and activists had with original bill

NJ Spotlight — Tuesday, October 2, 2012

By Joe Tyrrell

Renewed legislation establishing a state health insurance exchange to oversee coverage won approval from the Senate's commerce committee on Monday -- after some tinkering to the makeup of the exchange's governing board.

State health exchanges are a key provision of the federal Affordable Care Act. These virtual marketplaces let individuals and small businesses compare their options for private health insurance by cost and coverage.

Most of those testifying agreed that the amendments address previous complaints about S-2135, a bill sponsored by state Sens. Nia Gill (D-Essex) and Joseph Vitale (D-Middlesex) earlier this year but vetoed by Gov. Chris Christie.

Among the principal changes are the addition of two public members to the exchange's planned 10-member governing board and an agreement that they could have backgrounds in the health or insurance industries.

But the bill eliminates salaries for board members, and imposes conflict-of-interest standards to prevent them from being currently active in businesses affected by board decisions. Another modification stipulates that the exchange could not pay its executive director more than the salary of a state cabinet member, currently $141,000 a year.

Special Interest Groups

Many of those testifying called for representation on the board from particular specialties or groups, such as addiction therapy, pharmaceuticals or Hispanics. But there was also praise for the bill and general agreement that the Legislature should wrap up the process and get the exchange up and running.

Under the law, states have until November 16 to notify the federal government whether they will establish their own exchanges to identify options for the uninsured and others who may have trouble finding coverage, including small businesses. Otherwise, they would cede authority for the exchange to the federal government.

Christie, who vetoed the earlier bill but also sent a list of objections that included the lack of industry representation and salaries for board members, has said he is waiting until early next year to decide whether the state should create its own exchange. The governor said New Jersey ignored an earlier deadline to outline the benefits the exchange will provide, because federal regulations have not been fully presented.

The committee action followed another statement from Christie that he is in no hurry to implement the health insurance law; Republicans have made objections to the legislation a centerpiece of the November campaign. Since the Supreme Court upheld its legality earlier this year, the law will continue going into effect unless it is overturned by a new Republican-majority U.S. Senate and a Republican President.

Wait and See

Many healthcare advocates believe Christie is waiting to see the outcome of the November general election. Unless the Republicans win a veto-proof majority in the U.S. Senate or the White House, they believe Christie would be willing to move on a bill shortly afterwards, if it should land on his desk.

"The key issue here is that we want to be able to start the work of the exchange very soon," said Daniel Santo Pietro of the Latino Action Network. While enrollment would not open until October 2013, people will be looking for information much earlier, he said.

Gill called a state exchange "the right way to go," and said it is on schedule to be available at a time when New Jersey consumers will be exploring their options. The exchange will be responsible for providing information to consumers, including on the Internet and by telephone.

Vitale described that as "a simple, user-friendly process for obtaining insurance so that people are informed about their options." One result will be to encourage competition among insurance carriers, creating "downward pressure on costs," he said.

Speaking for an alliance of more than 70 consumer, health, senior, labor and other groups, Jeff Brown of New Jersey Citizen Action called the bill "a step in the right direction for expanding coverage, increasing access to healthcare, and ensuring quality and value."

Allowing board members to be drawn from a wider background alleviated the concerns of the Medical Society of New Jersey, according to Tim Martin. It is important that the exchange include some directors with "front-line clinical experience," he said.

Carolyn Baldacchini of the Unitarian-Universalist Legislative Ministry of New Jersey, said the key criterion should be that board members put the interests of insurance consumers and health-care patients above other considerations.

In addition to information about policies, the exchange would allow consumers to determine whether they qualify for federal help to buy coverage. Some subsidies are available for people with incomes up to four times the federal poverty level, which would currently be $44,680 for a single person or $92,200 for a family of four, according to the Kaiser Family Foundation.

The exchange also would establish an option to allow small businesses to pool their coverage under qualified plans, potentially allowing them to get lower rates.

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