New Jersey: *Approved* avg. 2020 #ACA premiums: 8.7% (vs. +30% w/out mandate penalty & reinsurance)

This Just In, via the New Jersey Dept. of Banking & Insurance...

NJ Department of Banking and Insurance Releases Health Plan Rates
On Average, NJ Individual Market Rates for 2020 Remain 1.4% Lower Than 2018

The New Jersey Department of Banking and Insurance today released rates for health insurance plans in the individual market effective January 1, 2020. On average, rates for 2020 will remain 1.4 percent lower than they were in 2018, due to policy actions taken by the Murphy Administration to stabilize the insurance market. 

OK, hold up, read that again: 1.4% lower than 2018 premiums, not 1.4% lower than 2019. That's kind of an important distinction. Don't get me wrong, this isn't a bad thing to note, but it's not that impressive considering some other states are seeing rate reductions from 2018. Of course, there's a lot of factors at play which vary from state to state as well.

For plan year 2020, premium rates on average in the individual market, for plans sold by carriers on and off the exchange (the marketplace), will increase 8.7 percent over last year primarily due to increases in medical costs, a trend that states are experiencing nationally. An additional factor contributing to the rate changes is the federal reinstatement of the Health Insurance Tax (HIT) for 2020 that accounted for 2.7 percent of the increase in premiums on average, which is affecting states across the country.    

8.7% is pretty much identical to the preliminary 2020 rate filings I posted about back in August. Technically, it's slightly higher (8.7% vs. 8.64%), although that's a quibble...due to rounding errors and such it's essentially the same.      

Pet peeve: The HIT reinstatement is responsible for 2.7 percentage points of the increase, not 2.7 percent. 2.7% of 8.7 would be just 0.23%. Moving on...

“New Jersey has worked proactively to push back against the federal government’s attacks on the Affordable Care Act and to stabilize the insurance market. Because of the progress made in our state, rates on average in 2020 will remain lower than they were in 2018,” said Commissioner Marlene Caride. “We are continuing the work to improve access to quality affordable coverage and establishing our own health insurance exchange is a major part of that effort. Transitioning to a State-Based Exchange will give the state greater control over our health insurance market and the ability to take additional actions to ensure New Jersey families get the care that is critical to their health and wellbeing.”    

The Murphy Administration has taken significant action to stabilize the market and improve access to coverage. Rates in the individual market are 22 percent lower than they would have been absent laws signed last year to continue a requirement to have health coverage in New Jersey (-6.8%) following the federal government’s repeal of the mandate, and to implement a reinsurance program (-15.1%). Because of the impact of these laws, 2020 rates in New Jersey on average remain lower than 2018.

THIS is the key point: The reinstatement of the mandate penalty, combined with the reinsurance waiver program (which is partly funded by the mandate penalty revenue) mean that the upcoming 8.7% rate hike would have been closer to 30% if the state hadn't taken action.

Many consumers will not see costs increase due to federal tax subsidies available to those earning up to 400% of the federal poverty level – an annual income of $49,960 for an individual and annual income of $103,000 for a family of four. Nearly eight in 10 residents purchasing coverage on the exchange qualify for financial assistance. In many cases, residents who receive financial assistance and who purchase the most popular silver plan, will pay less out of pocket after subsidies are applied. For example, a 32-year-old resident earning an annual income of $30,000 and living in Bergen County would pay $261 a month for the most popular silver coverage in 2020, $9 a month less than the amount paid in 2019. The same person in Bergen County purchasing a popular bronze plan would pay $164 a month, which is $30 a month less than the amount for the same plan in 2019.          

Last year, nearly 200,000 residents received tax assistance to purchase coverage on the exchange. As part of the state’s transition to a State-Based Exchange on the Federal Platform, New Jersey will operate the Navigator and the Certified Application Counselor programs for 2020, and all assisters will be required to obtain certification from the state. To help consumers enroll or re-enroll in coverage for 2020, New Jersey is investing $2 million in funding for Navigators and for organizations to conduct outreach in the community during the Open Enrollment Period that begins Nov. 1.   

“As a result of our transition to a State-Based Exchange on the Federal Platform for 2020, we are able to invest more funding in assistance for our residents for open enrollment this year, which we know is vital to making sure people understand their options and choose a plan that is best for them and for their individual circumstances,” added Caride. “We are also committed to ensuring that the plans permitted to be sold in New Jersey offer quality coverage, and access to the health care services that residents expect of their health insurance. As the federal government cuts back on the resources that are critical to connecting residents to coverage, and attempts to strip away vital consumer protections, New Jersey will continue to take every action it can to make sure residents can get the care they need.”         

For plan year 2020, as in plan year 2019, the Department encouraged health insurance carriers selling plans in the individual market to offer a lower cost silver plan off the marketplace, to provide lower cost options for those who do not qualify for federal tax subsidies. Two carriers selling plans on the marketplace will offer the off-marketplace only silver plan. 

Rate filings submitted by carriers are reviewed by the Department to ensure compliance with state law. By law, rate filings in the individual and small employer markets are informational and not subject to prior approval; however, the Department may disapprove any informational filing if the Department finds that the filing is incomplete and not in compliance with relevant laws or that the rates are inadequate or unfairly discriminatory.

About 315,000 consumers purchase health coverage in the individual market. Rates for 2020 in the Individual Health Coverage program will increase on average by 8.7 percent over 2019. Rates in the Small Employer Market will increase on average by 1.1 percent over last year.        

Rates for plans in the individual market may be found here

Rates for plans in the small employer market may be found here