NJ Spotlight

NJ's Dramatic Gains In Health Coverage Come Into Focus As Sign-Ups Under ACA Continue

Medicaid adds nearly 400,000, while more than 210,000 state residents have chosen marketplace insurance plans

NJ Spotlight — Wednesday, February 4, 2015

By Andrew Kitchenman

With still one month to go in the 2014-2015 open enrollment period for health coverage under the Affordable Care Act, New Jersey's gains are dramatic. More than 600,000 residents have gained insurance through either Medicaid or the federally operated individual marketplace.

The Medicaid gains have far surpassed projections, and analysts said that gains in the individual market are still on track to reach projections.

It's still uncertain how the ACA has affected the number of residents who are insured through their employers.

A total of 211,788 New Jerseyans selected federal marketplace plans through January 15, according to recent federal statistics. This includes roughly 80,000 who are newly enrolled in the second open-enrollment period that began on November 15, as well as more than 130,000 who renewed their coverage from 2014. The open-enrollment period will last until February 15, leaving open the possibility that there were will be a significant increase before the deadline.

New Jersey FamilyCare — the name for the state's Medicaid program — increased its enrollment from 1.28 million in December 2013 (before the ACA's expansion in eligibility) to 1.67 million in January 2015. While not all of this increase is directly due to eligibility expansion, publicity surrounding the ACA and the marketplace likely contributed to an increase in those who were previously eligible but hadn't signed up.

The 390,000-person increase in FamilyCare far exceeded the 234,000 increase projected by the Rutgers Center for State Health Policy in 2011. Center Director Joel Cantor said the difference was potentially due to the unprecedented publicity surrounding the ACA.

Cantor noted that many residents applied for insurance through the marketplace due to the availability of tax credits to subsidize the purchase, but later found out that they were eligible for FamilyCare.

Another factor in the increase could be that a significant number of people who previously had insurance that required high out-of-pocket costs have switched to FamilyCare, according to Raymond J. Castro, senior policy analyst for New Jersey Policy Perspective.

"It's clear that in Medicaid we are reaching full enrollment — that's really kind of amazing considering this is only one year," Castro said, noting that the Congressional Budget Office estimated it would take three years to maximize the number of new enrollees. "No one thought we could do that in a year."

The Medicaid gains may be leveling off, however, with the state seeing a 6,000-person drop in January after 12 straight months of gains. State Department of Human Services officials said the monthly "churn" of FamilyCare enrollees is unpredictable.

Cantor also said that the full effect on the healthcare system from the newly insured residents is still unfolding.

"It's a system that really needs to gear up," Cantor said of treating the newly covered.

He added that both doctors and hospitals should benefit from receiving reimbursements for the newly insured, although some patients may struggle to cover the out-of-pocket costs required by some marketplace plans.

"It's an improvement, not a panacea," Cantor said of the ACA.

State officials noted that FamilyCare members that have difficulty finding doctors can work with the managed-care organization that provides their coverage.

The plans are required to maintain an adequate network of providers, which is monitored and enforced by the state. Members can change managed-care organizations within 90 days of enrolling if they're not satisfied with the quality of their care or their doctor leaves the plan's network.

Cantor said he was encouraged by the marketplace reenrollments, which indicate that a large majority of enrollees maintained their coverage throughout 2014.

He also noted that 107,000 residents completed marketplace applications but didn't choose to enroll in a plan by January 15. If these residents choose plans by February 15, they would more than double the number of people who newly signed up in the first two months of this open enrollment.

In 2011, the Rutgers center projected that along with the 234,000 increase in Medicaid, the ACA would increase by 362,000 the number of residents insured through the individual and family market, driven by the new marketplace. These gains would be offset by 151,000 decrease in the number of residents insured through employers. This decrease was projected to occur because some people with employer-sponsored coverage were expected to switch to Medicaid or marketplace plans.

Cantor said the individual and family market increase is on track to reach the projection, although it may take another year or two to reach the mark (the 2011 report didn't include a timeline for reaching the projections). The ACA's impact on the employer-sponsored market won't be clear until the fall, when the U.S. Census Bureau releases its 2014 estimates on health insurance.

Advocates who have been working to reach residents during the open enrollment period said they were encouraged by the progress, but hope that there is a last-minute flourish of enrollments.

"It's good but it needs to be a whole lot higher," said Maura Collinsgru, healthcare policy advocate for New Jersey Citizen Action. Collinsgru also noted that while FamilyCare enrollment has been high, county welfare offices still are working through backlogs of applications.

State Human Services officials said there has been steady progress on reducing the backlog. The latest available backlog figure was 11,000 applications in late 2014, down 80 percent from a high of 55,000 in May 2014.

Collinsgru said there's been an increase in the number of enrollment events, as well as targeted outreach to Latino communities.

National data shows that there has been progress in reaching Hispanic people, with the share of Hispanics enrolling through the federal marketplace rising from 7 percent in the first open-enrollment period to 10 percent in the second period.

Castro said that figure is an underestimate, since the ethnicity of many enrollees is unknown.

"They have the highest uninsurance rate in the state, so we have to do much, much better there than we have been," Castro said, adding that outreach efforts have been hampered by Gov. Chris Christie's decision against having a state-based exchange instead of the federal marketplace. State exchanges have been eligible for tends of millions of dollars in additional federal funding to do outreach.

"Unfortunately, I think reaching Latinos does require disproportionately more outreach — research has shown that they respond best to personal contacts," particularly from organizations that residents trust, Castro said. "In New Jersey, we'll never nearly reach full enrollment unless we reach most of the (uninsured) Latinos."

Marketplace enrollment gains could be reversed if the U.S. Supreme Court issues a ruling invalidating the subsidies that most residents have used to buy marketplace insurance, Castro added. The court is weighing a case, King v. Burwell, that challenges these subsidies.

"This would be a major disaster for these people if those subsidies would be eliminated and there's no question that most of them would drop their health coverage," Castro said.

But he noted that the state could always choose to launch an exchange, especially since some residents' healthcare will depend on their new insurance.

"People are going to be in the middle of treatment" for serious conditions like diabetes and cancer, Castro said of the timing of the Supreme Court decision, which is expected in June. "I would hope that would never occur in our state and that the governor would not allow that."

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