Health Plan Legislation Meets With Resistance

NJBIZ — Thursday, July 10, 2014

By Beth Fitzgerald

Jersey City Mayor Steven Fulop spoke Thursday against the proposed legislation that would significantly loosen state regulation of multiple employer, self-insured health plans — something Fulop warned could undermine the Affordable Care Act.

Current law prohibits multiple employer welfare associations, or MEWAs, from charging premiums to the older employees that are more than twice those charged to younger employees.

A bill making major changes to the state law governing MEWAs passed the state Assembly unanimously in June, but the Senate tabled its version, S2220, last week.

The proposed legislation would eliminate the premiums rule, meaning there would be no cap on the ratio of the highest to the lowest premiums.

New Jersey Citizen Action argued this would encourage employers with younger, healthier workers to join MEWAs, thus potentially reducing the number of young, healthier groups getting covered in the existing state insurance market and in the new HealthCare.gov marketplace created by the ACA.

And if the younger, healthier enrollment is low, insurance experts fear premiums will rise significantly in the ACA marketplace.

Citizen Action held a news conference voicing its concerns that the bill may come up for a Senate vote Thursday; however, the bill had not been posted for a vote in the Senate session starting at 3 p.m.

Fulop said he was pleased the bill won't come up for the vote, and he urged lawmakers "to take a fresh look at it and speak to the importance of protecting the ACA."

He said: "Over the next several months and years, as the ACA takes its final form, you are going to have a lot of special interests looking to undermine it. It's really important that our state senators and assemblypeople recognize the fragile nature of the significant change that is happening and they do everything to protect it. We are concerned that this is a piece of legislation that undermines the ACA."

Linda Schwimmer, vice president of the New Jersey Health Care Quality Institute, said, "We are happy that the Legislature is now slowing down and taking a closer look at the bill."

She said the key issue is, "Do we want to create multiple avenues to obtain health insurance where there is a different structure in terms of taxes, and how things are priced and whether they are priced based on age and medical claims history."

She said the upshot could be a negative impact on insurance markets serving older populations and populations with the highest medical claims, "so we really need to consider all those issues."

Fulop said that since the bill will potentially weaken the ACA, he can't support it: "This is important to us because this is something that Jersey City did very well over the last year in recognizing the importance of the ACA."

He said the city was very proactive "in going out with our navigators in different languages and signing people up to make sure people were educated about the ACA. It was a very tedious and onerous task and I think it was something the Jersey City we did well."

The bill also allows third-party investors to set up MEWAs and then share in their financial returns, leading critics to charge the bill is being pushed by certain insurance brokers seeking to expand into the MEWA market.

Maura Collinsgru, health care project director for New Jersey Citizen Action, said the bill would "make it easier for insurers to cherry pick young, healthy consumers from whom they profit, while dumping older, sick consumers into the (ACA) Marketplace."

Dudley Burdge, staff representative for Communications Workers Local 1032, called on Democrats in the Legislature to kill the MEWA bill.

"The Democrats championed health reform nationally and have fought here in New Jersey to defend the Affordable Care Act, criticizing the governor for his failure to promote the ACA," Burdge said. "Now Democrats are advancing the single biggest threat to date with this bill. They can't have it both ways, criticizing the governor for not working to promote it while they pass bills to dismantle its protections. They need to stop advancing this bill."

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