New Jersey Herald

Affordable Care Act NJ: Will New Subsidies Offset Premium Increase?

New Jersey Herald — August 15, 2020

By Michael L. Diamond

New Jerseyans who buy their health insurance on the Obamacare market can expect on average a 3.3% increase in their premiums for 2021, but the price hike could be offset by subsidies, the Murphy administration said Monday.

Among the notable carriers: Horizon Blue Cross Blue Shield of New Jersey said its rates would increase by a modest 1.1%.

"I think what you're seeing is the benefit of the work that's being done collaboratively," Gary St. Hilaire, Horizon's president and chief executive officer, said in an interview.

The premiums affect some 316,000 New Jerseyans who aren't covered by Medicare, Medicaid or their employer. They represent only a fraction of the state's population, but they have historically made up a big segment of the uninsured.

The increases announced by the New Jersey Department of Banking and Insurance came as the state prepares to operate its own insurance exchange, Get Covered New Jersey, for the first time. Until now, it has used the federal government's site,

The state-operated exchange is part of Gov. Phil Murphy's strategy to solidify the Patient Protection and Affordable Care Act — the Obama-era law that has been picked apart by President Donald Trump and Congressional lawmakers.

For example, the state extended the open enrollment period this year. It begins Nov. 1 and ends Jan. 31, giving New Jerseyans six more weeks to sign up than if they were still using the federal exchange.

Not all of Murphy's moves have been applauded. He recently signed a bill that reinstates a 2.5% assessment on health insurance premiums that Congress had allowed to lapse, angering business groups that said it would lead to more expensive rates for their members.

The Murphy administration said Monday that money collected from the assessment would be used to increase premium subsidies for consumers with income of four times the poverty rate — about $51,040 for an individual and $104,800 for a family of four.

It expected to reduce the average monthly premium for those consumers from about $164 a month to about $117 a month, the Department of Banking and Insurance said.

"We wanted to make sure any subsidies would in fact go to people in need," said Maura Collinsgru, health care program director for New Jersey Citizen Action, a consumer group that advocated for the assessment.

State officials said the premium increases reflected the overall rise in health care costs.

In addition to Horizon, AmeriHealth New Jersey, the biggest health insurer on the individual exchange, was approved for a 6.5% premium increase, and Oscar was approved for a 6.1% increase, the state Department of Banking and Insurance said.

Horizon's modest increase was a sign that its Omnia plan launched five years ago was paying off, executives said.

The insurance company's plan works closely with health providers such as Hackensack Meridian Health and RWJBarnabas Health to share data. And it has helped reduce unnecessary visits to the hospital, Horizon officials said.

"We're seeing the benefit of that work over these years come to pass," St. Hilaire said.

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