Efforts by the Trump Administration and the GOP majority in Washington to undermine the Affordable Care Act (ACA), aka “Obamacare,” are, unfortunately, having an impact that is driving down the number of people with individual health insurance policies in New Jersey.

According to a June 20 press release from the NJ Department of Banking & Insurance, health insurance enrollment was down more than 10 per cent for the first quarter of 2018, compared to a year earlier. The total number of state residents signed up for individual (non-employer, non-government) health plans was 328,761, down from 368,619 for the first quarter of 2017.

In other words, almost 40,000 fewer people have health coverage.

Since the implementation of the ACA in 2014, enrollments had been rising every year in New Jersey, as elsewhere throughout the U.S. To illustrate: the 147,567 first quarter figure for 2013 in New Jersey jumped to 186,402 for 2014, a more than 26% increase. It was 326,528 in 2015, up 75%, and 359,173 in 2016, another 10% rise, before peaking in 2017, at 368,619.

The drop over the most recent year is a dramatic reversal of that trend and the result of deliberate efforts to sabotage the ACA in a variety of ways.

Continuing threats and attempts to repeal the ACA have destabilized the market and driven premiums upward. That uncertainty, along with the elimination of the Cost Sharing Reduction payments last October, has driven up insurance premiums, making the policies too expensive for many people. Even those who can still afford them have less incentive to buy them, given the repeal of the individual mandate as part of last years’ big tax bill. The repeal will take effect at the start of 2019.

Cutting last fall’s enrollment period for 2018, from 90 days, as in prior years, to 45 days, also played a role, especially in combination with a 90% reduction in the federal budget for advertising the shortened enrollment period.

Fortunately, steps have been taken in New Jersey to counteract these efforts to destroy the ACA.

On May 30, Governor Phil Murphy signed into law two pieces of legislation intended to stabilize the individual health insurance market in New Jersey and keep premiums affordable.

S-1878, the Health Insurance Premium Security Act, now P.L. 2018, c.24, is meant to reduce or at least stabilize premiums by creating a backstop on carriers’ exposure under the policies, essentially providing insurance for health insurers. It creates a reinsurance program to help them cover claims that exceed an annual threshold or “attachment point,” up to that year’s “reinsurance cap,” subject to a “coinsurance rate.” Those three amounts will be decided each year by the board of the New Jersey Individual Health Coverage Program, established pursuant to a 1991 law to ensure that people without access to employer or government sponsored health care programs could buy it from private carriers.

The money to pay for the reinsurance, which will come from assessments on carriers, appropriations from the general fund and grants, will go into the New Jersey Health Insurance Premium Security Fund. Implementation is contingent on securing a waiver of certain ACA provisions from the U.S. Secretary of Health and Human Services.

The other bill, A-3380, the Health Market Preservation Act, now P.L. 2018, c.31, restores the mandate, replacing the repealed federal one with a state law mandate. It similarly requires every resident taxpayer to obtain health insurance coverage that meets the same minimum essential coverage standards required by the ACA.

The penalty for failure to purchase adequate insurance will be imposed by way of a tax equal to that under the federal law prior to repeal. The monies collected are to go to the reinsurance program.

New Jersey Policy Perspective, which urged passage of the state mandate, estimated that without one, the number of uninsureds in the state would increase by about 300,000 over the next decade. Other dire consequences it predicted were that premiums would rise about 10 percent, the state would lose billions in federal Medicaid funds and premium subsidies, and taxpayers would be hit with a much bigger bill for charity care payments to hospitals.

UPDATE (July 5, 2018):

On July 2, the federal government released a report indicating that New Jersey is not alone in seeing a large drop in the number of people with individual health insurance plans since Trump took office. In fact, it seems to be doing better than most other states.

The report found that, nationwide, average monthly enrollment in individual market plans decreased by 10 percent in 2017, at the same time that premiums increased by 21 percent, versus a mere 7% premium jump in 2016 and 2% in 2015.

Most of that decreased enrollment occurred among those who were not receiving APTC (advanced premium tax credit) subsidies, a federal subsidy available under the ACA to individuals and families who earn less than 400% of the Federal Poverty Level. It is meant to make health insurance more affordable by defraying part of the cost of premiums. As mentioned above, the other type of federal subsidy available under the ACA, the Cost Sharing Reduction, geared toward out-of-pocket costs—deductibles, coinsurance and copays, was discontinued last fall.

Among the unsubsidized, enrollment fell by 20%, as compared with only 3% for subsidized insureds.

Trends in Subsidized and Unsubsidized Individual Health Insurance Market Enrollment” was issued by the Centers for Medicare and Medicaid Services, which is part of the U.S. Department of Health and Human Services.

The drop in enrollment from 2016 to 2017 took place in 44 states. The year before, from 2015 to 2016, only 10 states saw declines, while enrollment rose on a national basis.

Despite the decline measured in New Jersey from first quarter 2017 to first quarter 2018, enrollment rose here overall for 2017. For those without APTC subsidies, it went up 5%.

Only four other states also posted an increase in such enrollments last year: Arkansas (3%), New Hampshire (also 5%), Maine (6%) and Rhode Island (9%).  In addition, the District of Columbia saw 6% growth.

The rest of the states saw decreases in non-APTC policies. Those decreases ran as high as 73% in Arizona, 60% in Oklahoma and 53% in Minnesota  and ss low as 1% in Wyoming and 4% each in California and North Dakota.

A press release accompanying the report recognized the problem of rising prices and falling enrollments without acknowledging the role of Trump’s policies. It also promoted the idea of more affordable options, even though that could involve loosening ACA standards for what policies must cover. For example, a rule change made in June expands access to association health plans, enabling junk policies that lack coverage for “essential health benefits” such as hospital care, maternity care, prescription drugs and mental health treatment. NJ Appleseed submitted a comment on behalf of the NJ for Healthcare Coalition opposing the rule change on the grounds of its “potential to erode consumer protections, destabilize the individual and small group insurance markets in our State, promote adverse selection, and raise prices for New Jersey consumers.”

Update (July 10, 2018)

As if the Trump Administration had not done enough already to disrupt the health insurance market and undermine the ACA, on July 7, it announced that it was suspending yet another aspect of the law, known as the Risk Adjustment Program.

The Program transfers funds from insurers with a relatively low-risk enrollee population to those with a relatively high risk population. It was deemed essential to stabilize the insurance market in light of the ACA’s prohibition on denying coverage to people with preexisting conditions or charging them higher premiums.  The concern was that, without it, insurers would try to make their policies unattractive to people with chronic illnesses and expensive health problems by not covering certain treatments or drugs or through higher deductibles or reduced reimbursements. By spreading risk more evenly, the Program makes them less likely to do that.

The Center for Medicare and Medicaid Services (CMS) justified the move based on a Feb. 28, 2018 federal court decision in New Mexico that invalidated the methodology it uses for the Program. It said the ruling “prevents CMS from making further collections or payments under the risk adjustment program, including amounts for the 2017 benefit year, until the litigation is resolved.”

The CMS press release indicated that, as a result, billions of dollars of risk adjustment payments and collections are now on hold and that CMS has asked the court to reconsider its decision, with the motion heard by the court on June 21.

It also noted that another federal court, in Massachusetts, had reached a contrary conclusion on the same question.

A New York Times article warned that the freeze of the Program could “increase uncertainty in the markets and drive up premiums this fall.”

American Health Insurance Plans, a trade group, blasted the “new market disruption brought about by the decision to freeze risk adjustment payments” saying “it comes at a critical time when insurance providers are developing premiums for 2019 and states are reviewing rates.”

The group foresaw “serious consequences for millions of consumers who get their coverage through small businesses or buy coverage on their own” due to increased market uncertainty and higher premiums for many health plans, “putting a heavier burden on small businesses and consumers, and reducing coverage options. And costs for taxpayers will rise as the federal government spends more on premium subsidies.”

Update (July 11, 2018)

Another day and yet another attack on the Affordable Care Act, the second one within the past week.

It surely is death by a thousand cuts.

This time, the CMS announced on July 10 that it was slashing yet further the so-called navigator funds that are available for grass roots groups to assist people seeking to enroll in insurance plans through the federal exchanges in the 34 states that do not have a state exchange. New Jersey, where former Governor Chris Christie refused to set up a state exchange, is one of the 34.

The funding is being cut to $10 million. That is an 84% decrease from two years ago when $62.5 million was made available for that purpose.

It follows on last year’s major decrease, to $36 million, and like a number of other actions taken by the Trump Administration, appears calculated to destroy the ACA by starving it of money, following the repeated failure of attempts to repeal it outright.

(At the same time, the Administration is pursuing that same goal through the courts, where it has argued, in a pending case in Texas, that with the repeal of the federal mandate, the rest of the ACA is unconstitutional–including the ban on charging more for pre-existing conditions and provisions that prevent charging exorbitant rates to people over 50.)

The navigator funds are called that because they help health care consumers navigate what can be a very complex process of selecting and enrolling in insurance through the insurance exchanges. They also provide outreach and education to raise awareness about the marketplace, and refer consumers to health insurance ombudsmen and consumer assistance programs when necessary.

The reduction in funding will affect this fall’s enrollment period for coverage in 2019.

In addition to making less money available, the CMS is encouraging fund recipients to steer consumers toward alternative plans such as association health plans, short-term plans and health reimbursement arrangements, which tend to be cheaper but fall below ACA standards and provide less coverage.

It announced that funding will now be tied to efforts during prior years to make people shopping for insurance aware of those other options, even if they are junk plans that might be insufficient for their needs.

Update (July 27, 2018)

At last, a bit of good news. The Trump Administration on July 24 announced that it would resume risk adjustment payments, reversing a decision just three weeks earlier to suspend them.

A CMS press release stated that the agency had issued a final rule that restored the previously utilized risk adjustment methodology vacated by a federal district court in New Mexico last February.  The judge had questioned the methodology and the CMS claims that it has addressed the court’s concerns by providing a fuller explanation of it.

CMS said it did not want to await the decision on a motion to reconsider the ruling that was heard on June 21,  because a decision might not be forthcoming until after Labor Day and thus too late for the agency to make scheduled risk adjustment payments and collections in August.

It used that same rationale for dispensing with the usual rule-making  procedure which requires the publication of proposed rules and opportunity for public comment, a lapse that could expose the new rule to a fresh challenge on that basis.

Stay tuned.

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