Governor Murphy announced that the state will seek to run its own ACA marketplace in 2021 to allow greater control over its health insurance market. New Jersey took this step to “protect New Jersey from actions taken by the Trump Administration to roll back the hard-fought protections afforded by the ACA,” according to Governor Murphy.
Running a state-based exchange will give the state more control over different aspects of the market. These aspects include having control over the open enrollment period, having more access to data, the ability to conduct targeted outreach, and allowing user fees to fund exchange operations, consumer assistance, outreach and advertising.
New Jersey has already passed a few laws that have decreased average rates by 9.3% in 2019. The laws include an individual mandate, a reinsurance program, and legislation that protects consumers from surprise balance billing. The individual mandate’s penalty is related to the average cost of a bronze plan in New Jersey, and will be assessed on state tax returns. The revenue collected from this penalty will go into state funding for the reinsurance program. The reinsurance program was approved by CMS in August 2018. The reinsurance program reimburses insurers for 60 percent of the cost of claims over $40,000, up until claims reach $215,000.
New Jersey is also proposing codifying major ACA provisions into state law. The protections the Murphy Administration is looking into codifying include:
NJ’s announcement that they will run a state-based exchange comes at a time when President Trump’s Administration has declared that it backs a full invalidation of the ACA. This position furthers the earlier decision by the administration when the Justice Department argued that there were only grounds to strike down the ACA’s consumer protections.
If you would like to know more about MMS Corp and pre-tax benefits for your company, contact us today.
NYS 2018 Final Rates Approved
NYS has approved 2018 Final Rates last week. Small group rates will increase 9.3% while the individual rate average increase will be 13.9%.
As per NY State Law carriers are required to send out early notices of rate request filings to groups and subscribers see original –NYS 2018 Rate Requests. With only 3 months of mature claims, experience for 2017 health insurers’ requests are historically above average. Ultimately the State reduces this request substantially. This year, however, NYS acknowledged that medical costs increased, citing a 7-percent average increase on the individual market and an 8.5-percent increase on the small group market. The administration also acknowledged drug prices have impacted insurers, pointing specifically to blockbuster drugs for Hepatitis C.
The national rate trend, however, has been much higher than in past years due to higher health care costs Like other states throughout the nation, the 2017 rate of increase for individuals in New York is higher than in past years partly due to the termination of the federal reinsurance program. The loss of the program’s a.k.a. federal risk reinsurance corridor funds account for 5.5 percent of the rate increase.
How are neighboring States doing? In NJ, not that bad. According to a review of filings made public last week the expected rate increase will likely be half. Example: Horizon Blue Cross Blue Shield requested a 4.8% increase on their OMINA Plans. For CT market, on the other hand, things are much worse at least for the individual marketplace with average 25% rate increases.
While the individual mandate is still the law, Washington has made it clear that they aren’t going to enforce the mandate. That means fewer people will buy health insurance raising the prices for those who do.
A bipartisan group of congressional representatives has discussed an agreement to extend and guarantee the payments, but it’s unclear whether they could do so by the new filing deadline of Sept. 5. A lawsuit filed by Congress against the Obama administration to challenge the payments is still pending. In addition, Trump has repeatedly threatened to withhold payments to insurers that reduce cost-sharing – deductibles, copays and coinsurance – paid by low-income customers. More than half of New Jersey’s marketplace customers receive that assistance, and without it, most would be unable to afford coverage.
Finally, a tax on health insurance premiums is due to be reinstated in 2018 after a one-year “tax holiday” approved by Congress for 2017. That contributed 2.3 percent to the rate hikes that insurers requested last year.
SMALL GROUP MARKET VS. INDIVIDUAL MARKET
The new premium hikes ranged from as little as .8% percent for Hudson Valley’s Crystal Run Health Insurance Company to a whopping 20.4% percent increase for Albany region’s CDHP. Importantly, small group market is still more advantageous than individual markets unless one gets a sizable low-income tax credit.
Overall, about 350,000 individual plan consumers will be affected by the price hike, while more than a million users will be hit by higher small group fees. Last year, Blue Cross Blue Shield released a study showing Obamacare user costs were 22 percent higher than people with employer-sponsored health plans, while UnitedHealth plans to exit most Exchanges see – Breaking: Oxford Exits Metro Indiv & Oxford Liberty HMO 2017.
The correct approach for a small business in keeping with simplicity is a Private Exchange and with our large buying group PEO partnerships. This is a true defined contribution empowering employees with a choice of leading insurers offering paperless technologies integrating HRIS/Benefits/Payroll. Both employee and employers still gain tax advantage benefits under the business. Also, the benefits, rates and network size are superior under a group plan as the risk are lower for small group plans than individual markets.
* All amounts are rounded to the nearest 1/10.
**Indicates that the company makes products available on the “New York State of Health” marketplace.
Learn how a Private Exchange and our PEO Partnership can help your group please contact us at [email protected] or (855)667-4621.
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Trump’s First Legislative Effort Fails as G.O.P. Pulls Bill to Repeal Obamacare
THE NEW YORK TIMES
By ROBERT PEAR, JULIE HIRSCHFELD DAVIS, JENNIFER STEINHAUER and THOMAS KAPLAN
MARCH 24, 2017
WASHINGTON — House Republican leaders, facing a revolt among conservatives and moderates in their ranks, pulled legislation to repeal the Affordable Care Act from consideration on the House floor Friday afternoon in a humiliating defeat for President Trump on the first legislative showdown of his presidency.
Paul D. Ryan, the House speaker, rushed to the White House shortly after noon to tell Mr. Trump he did not have the votes for a repeal bill that had been promised for seven years — since the day President Barack Obama signed his landmark health care act into law.
Mr. Trump, in a telephone interview moments after the bill was pulled, blamed Democrats and predicted that they would seek a deal within a year after, he asserted, “Obamacare explodes” because of higher premiums. The president said he did not fault Mr. Ryan and said that he was pleased to move past his first legislative fight. He maintained that he was merely going along with the House bill.
But the effort to win passage was hardly kept secret. Vice President Mike Pence and Tom Price, the health secretary, rushed to Capitol Hill for a late appeal to House conservatives, but their pleas fell on deaf ears.
“You can’t pretend and say this is a win for us,” said Representative Mark Walker, Republican of North Carolina, who conceded it was a “good moment” for Democrats.
“Probably that champagne that wasn’t popped back in November may be utilized this evening,” he said.
At 3:30 p.m., Mr. Ryan called Republicans into a closed-door meeting to deliver the news that the bill would be pulled, with no plans to try again. The meeting lasted five minutes.
“We’re going to go home and spend time with our families and time with our constituents, and one day I hope we can eventually repeal,” said Representative Chuck Fleischmann, Republican of Tennessee.
The Republican bill would have replaced the Affordable Care Act, known informally as Obamacare, which mandated that almost everyone have health insurance, with a system of age-based tax credits to purchase health insurance plans.
But it never won over conservatives who wanted a far more thorough eradication of the Affordable Care Act. Nor did it have the backing of more moderate Republicans who were anxiously aware of the Congressional Budget Office’s assessment that the bill would leave 24 million more Americans without insurance.
With the House’s most hard-line conservatives holding fast against it, the bill’s support collapsed Friday after more rank-and-file Republicans came out in opposition, including Representatives Rodney Frelinghuysen of New Jersey, the soft-spoken chairman of the House Appropriations Committee, and Barbara Comstock of Virginia, whose suburban Washington district went handily for the Democrat nominee, Hillary Clinton, in November.
“Seven years after enactment of Obamacare, I wanted to support legislation that made positive changes to rescue health care in America,” Mr. Frelinghuysen wrote in a statement. “Unfortunately, the legislation before the House today is currently unacceptable as it would place significant new costs and barriers to care on my constituents in New Jersey.”
In the end, Republican leaders doomed the bill by agreeing to eliminate federal standards for the minimum benefits that must be provided by certain health insurance policies.
“This provision is so cartoonishly malicious that I can picture someone twirling their mustache as they drafted it in their secret capitol lair last night,” said Representative Jim McGovern, Democrat of Massachusetts. “This backroom deal will kill the requirement for insurance companies to offer essential health benefits such as emergency services, maternity care, mental health care, substance addiction treatment, pediatric services, prescription drugs and many other basic essential services.”
Defeat of the bill could be a catalyst if it forces Republicans and Democrats to work together to improve the Affordable Care Act, which virtually every member of Congress believes needs repair. Democrats have been saying for weeks that they want to work with Republicans on such changes, but first, they said, Republicans had to abandon their drive to repeal the law.
President Trump, through his budget director, Mick Mulvaney, told House Republicans on Thursday night that he was giving them this one chance to repeal the Affordable Care Act. If they failed, Mr. Mulvaney told them, the president would live with his predecessor’s law.
Rejection of the repeal bill may also prompt Republicans to reconsider the political strategy they were planning to use for the next few years.
“We have to do some soul-searching internally to determine whether or not we are even capable of functioning as a governing body,” said Representative Kevin Cramer, Republican of North Dakota. “If ‘no’ is your goal, it’s the easiest goal in the world to reach.”
Representative Robert Pittenger, Republican of North Carolina, offered this advice to hardline conservatives who helped sink the bill: “Follow the example of Ronald Reagan. He was a master, he built consensus. He would say, ‘I’ll take 80 percent and come back for the other 20 percent later.’”
Failure of the House effort leaves the Affordable Care Act in place, with all the features Republicans detest.
The Republican bill would have repealed tax penalties for people who go without health insurance, rolled back federal insurance standards, reduced subsidies for the purchase of private insurance and set new limits on spending for Medicaid, the federal-state program for more than 70 million low-income people. The bill would also have repealed taxes imposed by the Affordable Care Act on health insurance providers, manufacturers of prescription drugs and medical devices, and many high-income people.
The bill would also have cut off federal funds to Planned Parenthood for one year.
Mr. Ryan said the bill included “huge conservative wins.” But those provisions were ultimately not enough.
Leading article on the direction of TRUMPCARE we’ve read thus far. Former president Barack Obama’s budget director, Peter Orszak thinks Obamacare will be replaced through the waiver process.
Here’s How Trump Will Change Obamacare
By Peter R. Orszag FEB 14, 2017 6:00 AM EST
Promises made by Donald Trump and Republicans in Congress to repeal and replace the Affordable Care Act are proving to be more complicated than they sounded on the campaign trail. With reality now setting in, what’s most likely to happen?
I expect to see Republicans stage a dramatic early vote to repeal, with legislation that includes only very modest steps toward replacement — and leave most of the work for later. Next, the new administration will aggressively issue waivers allowing states to experiment with different approaches, including changes to Medicaid and private insurance rules. At some point, then, the administration will declare that these state experiments have been so successful, Obamacare no longer exists.
In other words, the repeal vote will be just for show; the waivers will do most of the heavy lifting.
I predict something like this will happen because of two core challenges that stand in the way of Republicans’ replacing the ACA through legislation: the need for so-called community rating and the need to have 60 votes in the Senate to pass a comprehensive new health-care law.
First, community rating. It is one of the basic building blocks needed to create a workable private insurance market — whether Democrats or Republicans are doing the building. If your insurance covers a pre-existing condition but at a cost of, say, $100,000, that doesn’t really help. Community rating requires that your premium be the same as that of other people in your area, no matter how unhealthy you are.
With community rating in place, the next step is to recognize how easy it is to game the system: People can just wait until they get sick, then buy insurance at the community rate. To discourage that practice, the system needs to give people some strong incentive to purchase insurance before they get sick. The Affordable Care Act used an individual mandate; most Republican plans instead propose a requirement for continuous coverage. That is, people enjoy access to community-rated premiums in the future only if they have kept themselves insured over some period of time in the past.
Given the costs involved, subsidies are also needed to ensure that low- and moderate-income households can afford the coverage. This overall structure means that younger, healthier people implicitly subsidize older, sicker people.
Such are the inescapable constraints imposed by community rating. Community rating could be discarded, as Mark Pauly of the University of Pennsylvania has argued. Pauly instead proposes that insurance companies be allowed to vary people’s premiums according to their health status, and that general revenue be used to pay sicker people’s higher premiums. This would require substantial new taxes, however, which is presumably a nonstarter in a Republican plan. In any case, it would only make the transfers to older, sicker people more explicit.
The second challenge is more nakedly political: Without a substantial change in Senate procedure, a bill to fully replace the Affordable Care Act, including changes to insurance rules, will require 60 votes. Republicans have only 52, so at least eight Democratic senators would need to be persuaded to go along. This is a much tougher assignment, especially since the administration will already be calling in legislative favors on ongoing confirmations, the debt limit, tax reform and other issues.
The Republicans’ desire to hold an early partisan vote repealing the ACA (through the reconciliation process that requires only a simple majority in the Senate) seems too strong to resist. The repeal will probably be set to become effective in the future, perhaps 2019 or 2020.
This vote will probably be closer than many people think, given the concerns that some moderate Republican senators have expressed about repealing the ACA with no replacement ready. Some far-right Republicans may also balk at anything less than a full immediate repeal. For the White House, however, the closeness of the vote will be a feature rather than a bug, because it will create the impression that the vote is significant.
The repeal legislation will probably include some modest steps toward replacing the ACA, but these will be mostly symbolic measures such as allowing insurance companies to sell across state lines (which by itself would do little to lower people’s premiums). The hard work of a creating comprehensive replacement is then likely to get bogged down in legislative muck.
But the administration can use its expansive waiver authority to allow states to experiment with both Medicaid and the individual insurance markets. As these 50 flowers bloom, President Trump could at some point declare victory and assert that the ACA has been sufficiently reformed.
This approach, whatever its potential substantive shortcomings, provides a major political benefit: The administration would not necessarily own the many problems that inevitably would remain. In response to any particular complaint in a specific state, the administration could simply shrug its shoulders and direct the inquiry to the relevant governor.
This outlook assumes that the Republican leadership in Congress isn’t willing, or lacks the votes, to change the Senate’s traditional rules, and that a comprehensive replacement for the ACA will indeed require 60 votes. If that changes, all bets are off.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
To contact the author of this story:
Peter R. Orszag at [email protected]
To contact the editor responsible for this story:
Mary Duenwald at [email protected]
2017 Individual Open Enrollment
Everything you need to know ahead of tomorrow’s 2017 Individual Open Enrollment. This Open Enrollment marks the 4th anniversary of Obamacare a.ka. The Affordable Care Act. As a helpful resource, the new NY and NJ rates with important deadlines are listed below. 33 States such as NJ use the healthcare.gov website or at https://medicalsolutionscorp.demo.hcinternal.net/individual/individual/homePage. States such as NY and CT use their own Marketplace – NYS of Health and AccessHealth CT. Importantly, individuals not expecting a subsidy may also apply Off-Exchange which in many case has more options and Insurers.
2017 NY Individual Health Plans
These rates are for New York City unless otherwise indicated, and for a single person. For a family premium, multiply by 2.85, Husband/Wife
multiply by 2.0 and Parent/Children multiply by 1.70. The non single deductibles are out of pocket maximums are doubled. These are for standard plans, which two-thirds of customers enrolled in during 2016.
While deductibles for platinum, gold and silver plans have stayed the same, many bronze plan deductibles have increased 33 percent. That means consumers who purchase a bronze plan — presumably for its lower monthly premium — are paying more out of pocket for their medical costs before their insurance company kicks in a dime. A family of four that purchased a bronze plan will have an $8,000 deductible in 2017, up from $6,000 in 2015. For someone young and relatively healthy, that might be OK, but that person is vulnerable to a very large bill if he or she needs expensive medical care. It’s the platinum plans where New York State really shows itself to be a national outlier. Roughly 18 percent of New Yorkers chose a platinum plan in 2016, compared to 2 percent across the nation, according to the Kaiser Family Foundation.
Here are the 2017 rates:
2017 NJ Individual Health Plans
NJ Dept of Banking and Insurance posted the 2017 NJ individual health plans Monday. Only two carriers will offer plans on the state’s Obamacare marketplace next year: Horizon Blue Cross Blue Shield of New Jersey and AmeriHealth.
Additional insurers are participating off-exchange or outside the Marketplace. Examples: Aetna, CIGNA and Oxford. There are additional 20 plan options available off exchange. A notable new entrant, Health Republic of NJ, will no longer be available for 2017. See – Health Republic NJ Shutting Down.
Here are the 2017 rates:
Health Republic NJ Shutting Down
Health Republic NJ Shutting Down
In yesterday’s surprise announcement, NJ regulators will be shutting down Health republic NJ for 2017 “because of its hazardous financial condition”. This marks the demise of the second Metro area healthcare co-op with the same name-sake Health Republic but different managed healthcare co-op, see Health Republic NY Shutting Down Nov 30.
Since Obamacare’s rollout in the fall of 2013, 16 co-ops that launched with money from the federal government have collapsed. Now, just six co-ops—Wisconsin’s Common Ground Healthcare Cooperative; Maryland’s Evergreen Health Cooperative; Maine Community Health Options; Massachusetts’ Minuteman Health; Montana Health Cooperative; and New Mexico Health Connections—remain.
In a bizarre twist of fate or unintended Affordable Care Act design flaw small affordable startups not only have to gain new client footholds but also support large
established companies “with sicker patients”. Start-ups, by contrast, with much lower rate of diagnosed sick patients essentially pay into this tax. This tax is part of the risk adjustment program intended to stabilize Insurers who took on sicker patients and spread this risk. While some correctly blame too low pricing and some miscalculated business decision-making the inherent extra tax doomed the majority of the original 16 co-ops.
Health Republic in fact grew steadily and made money the first 9 months of 2015. However, HRNJ lost 17.6 million end of 2015 and is choking off at this $46.3 million payment to the government through the risk adjustment program. This is considered one of the 3 R’s of the reinsurance program – risk corridor, reinsurance and risk adjustment that were intended to level the playing field. The first “R”—“reinsurance”—subsidizes insurers that attract individual customers who rack up particularly high medical bills. The second—“risk adjustment”—requires insurers with low-cost patients to make payments to plans that share the benefits with those who insured higher-cost ones. And the third, called “risk corridors,” is a program to subsidize health plans whose total medical expenses for all their Obamacare customers overshoot a target amount.
The co-ops received less money than they initially anticipated last year under Obamacare’s risk corridor program, which resulted in the collapse of at least five co-ops and a $5 billion class action lawsuit filed
by 6 state’s co-ops – ” Oregon-based insurer Moda Health Plan Inc., Blue Cross Blue Shield of North Carolina, Pittsburgh-based Highmark Inc., and the failed CoOportunity Health, which was based in West Des Moines, Iowa, and Health Republic Insurance Co. of Oregon, which was based in Lake Oswego.”
From Politico’s “Obamacare’s sinking safety net”:
“The risk corridor program, however, has been an unmitigated debacle. In December 2014, the Republican Congress voted to prohibit the Obama administration from spending any money on the program, decrying it as a bailout for the insurance companies. Sen. Marco Rubio, then thought to be a leading GOP presidential contender for 2016, was particularly vocal in pillorying the program.
Unlike all those symbolic “repeal Obamacare” votes, Congress actually succeeded in blocking those risk corridor payments, and it hit Obamacare hard. Insurers filed claims seeking $2.9 billion, but under the limits imposed by the GOP there was less than $400 million available to make good on those payments. The end result: insurers initially received only 12.6 cents for each dollar they had counted on. Many of the new Obamacare co-op plans that went out of business blamed their collapse in part on the fact that they’d been counting on the full payments to keep them solvent.”
Regrettably, in a Presidential year no one wants to touch this burning hot potato. Perhaps NJ’s handling of this pressure cooker and taking 2017 off may be the best course of action after all.
As of Monday, September 19, 2016, the portal for Health Republic Insurance will be shut down, as they are no longer accepting new business for the year.
The New Jersey State Department of Banking and Insurance has also provided a list of FAQs related to the shutdown and how it affects individuals, small employers, brokers and providers. For more information, click here.
As always, our team is here to assist you and to help you grow your business.