New Jersey Health Care Reform

Affordability
Shared Responsibility
Resources

In June 2008 the NJ Legislature passed S-1557/A-2624, a health care reform bill sponsored by State Senator Joseph Vitale (D-Middlesex). The bill was signed into law by Governor Corzine in July 2008. The bill expands the NJ FamilyCare Program, allowing NJ to reinstitute enrolling parents up to 200% of poverty. The bill also contains a KidsFirst mandate requiring that all children (18-years and younger) have health insurance. Additionally, there are a number of market reforms in the bill including the introduction of age as a rating factor in NJ's individual insurance market.

S-1557/A-2624 constitutes Phase 1 of what Senator Vitale has laid out as a two phase health care reform plan. Senator Vitale has indicated that he plans to introduce Phase 2 this fall 2008. Main components of Phase 2 are:

• An individual mandate requiring all New Jersey residents obtain health insurance.
  
• Elimination of NJ's individual health insurance market and creation of a state managed commercial grade insurance product.
• A collaborative care system, expanding community based medical services to care for the remaining uninsured (the undocumented and homeless populations).
• For additional details, see Health Care Coverage for All: A Blueprint for New Jersey, By Joseph F. Vitale & David L. Knowlton (March 17, 2008).

The New Jersey For Health Care Campaign will be evaluating Senator Vitale's Phase 2 proposal through the lens of our 5 Core Health Care Principles:

1. Guaranteed access to affordable, comprehensive health care for all.
   
2. Improve the quality of care for all.
   
3. Shared responsibility among all stakeholders including individuals, employers and government.
   
4. Reduce and contain costs to assure affordable coverage.
   
5. Emphasis on preventive care.

While consumer advocates have not yet seen a draft of Senator Vitale's phase 2 proposal, based on the information we have, there are number of concerns for NJ consumers, particularly around the issues of affordability and shared responsibility.

Affordability

Senator Vitale's Phase 2 includes an individual mandate, requiring all NJ residents obtain health insurance. The NJ For Health Care Coalition is not ideologically opposed to an individual mandate, recognizing the positive outcomes associated with a health care policy that ensures everyone has health care insurance.

If implemented with specific safeguards for affordability and assistance, individual mandates, or policies that require people to purchase health insurance, can be an important tool toward guaranteeing health care coverage for all.

However, Massachusetts is the only state in the country that has implemented a legal mandate that all residents purchase insurance, making this extremely uncharted territory.

Policies that require people to purchase health insurance must be designed to include basic consumer protections in order to ensure fairness:

1. Everyone has the right to purchase health insurance. Insurers should be required to allow all people to purchase insurance, regardless of age, health status or claims history.
   
   
2. A standard set of health care benefits must be guaranteed. Available health care plans should include coverage for a comprehensive set of services, including inpatient and outpatient care, mental health care and prescription drugs.
   
   
3. Coverage must be affordable and offered on a sliding scale. Affordability scales should take into account out-of-pocket costs such as copayments and deductibles, and exemptions or subsidies should be available for people with low incomes.
   
   
4. Policies should be designed to provide flexibility in the face of life events. Consumers should have options that ensure flexibility during difficult times, such as family emergencies, undue financial hardship, or loss of employment.
   
   
5. Premium costs should be administered fairly and equitably. Insurers should not be permitted to vary premium costs based on health status, age, or gender.
   
   
6. Consumers should be guaranteed a good value for their money. Insurers should be encouraged to contain administration, marketing and other non-medical costs and annual premium increases should be subject to an approval process in order to contain costs and promote the health of the program over the long term.
   
   
7. Responsibility must be shared among all stakeholders. Government must design programs that are affordable, insurers must contain costs, and employers must share in the cost of insurance premiums to ensure a system that is sustainable and promotes fairness for all parties.

If New Jersey decides to go down the path of an individual mandate, the NJ For Health Care Campaign will work to ensure there is an open and public process to determine an affordability schedule based on percentage of family income and ability to pay. NJ is poised to be a leader in health security for the nation. Any decisions around an affordability threshold will require broad public and stakeholder engagement to make it a reality.

The current affordability scale used in NJ FamilyCare is not affordable for many families and there is evidence to support that minimally, all premium cost-sharing for people up to 200% of the federal poverty level (FPL) should be eliminated. Even for families above 200% of poverty, health insurance is not necessarily affordable. A family with 3 or more children above 350% FPL pays $411/month under NJ's FamilyCare Advantage Program.

For more information, see A Guide to Protecting Consumers for an Individual Mandate, By Community Catalyst.

Shared Responsibility

A sustainable health care reform plan must include shared responsibility among all stakeholders — including individuals, employers and government. If consumers and taxpayers foot the entire bill, it could create incentives for employers to drop employer-provided health benefits.

Senator Vitale has indicated that Phase 2 will require employers set up Section 125 tax-free accounts for workers to use in purchasing health insurance.

The NJ For Health Care Campaign does not believe that the creation of Section 125 accounts constitutes adequate shared responsibility among employers.

The NJ For Health Care Campaign is exploring a number of options for ensuring shared responsibility and investigating which approach(s) might work best in NJ. One example is the establishment of a play-or-pay provision requiring employers either provide affordable, comprehensive coverage for their employees or contribute (on a sliding scale) to state programs such as Medicaid, the NJ FamilyCare and NJ FamilyCare Advantage programs.

Stay tuned — more information about Senator Vitale's health care reform proposal soon to come!

Resources

Senator Vitale's Health Care Proposal

• NEW! Senator Vitale, Chair NJ Senate Health Committee Stands with Advocates to Oppose Cut Backs to NJ FamilyCare, Medicaid and the Aids Drug Distribution Program — May 12, 2009
• NEW! Statement of Ev Liebman, NJCA Director of Organizing & Advocacy — May 12, 2009 Press Conference Opposing Proposed State Cutbacks to the NJ FamilyCare Health Insurance Program and the Imposition of Co-pays for the Medicaid and AIDS Drug Distribution Program (ADDP) — May 12, 2009
• NEW! Senator Vitale, Chair NJ Senate Health Committee, to Join NJ Health Care Advocates, Calling for Restoration of Funding to Critical Health Care Programs in NJ's FY10 State Budget — May 12, 2009
• A New Proposal in New Jersey, An Analysis of Senate Bill 1557, By Community Catalyst
• Health Care Coverage for All: A Blueprint for New Jersey, By Joseph F. Vitale & David L. Knowlton (March 17, 2008)
• New Jersey Health Care Reform Act: Helpful Facts & Figures
• NJ Citizen Action Testimony on S-1557 Before the Senate Health, Human Services and Senior Citizens Committee, Submitted by Ev Liebman, NJCA Director of Organizing and Advocacy
• Hispanic Directors Association of NJ Testimony on S1557, Before the Senate Health, Human Services and Senior Citizens Committee, Submitted by Daniel Santo Pietro, HDANJ Executive Director
• Press Release: New Coalition of Consumer Advocates from Across the State Working Toward Guaranteed Quality Affordable Health Care for All

Individual Mandates and Affordability

• A Guide to Protecting Consumers for an Individual Mandate, By Community Catalyst
• Affordable Health Care for All: What Does Affordable Really Mean?, By Community Catalyst

Lessons from Other States

• Revisiting Massachusetts Health Reform: 18 Months Later, By Community Catalyst
  

In the News

• "Untouchables On Tax Rebate?" (Gloucester County Times — May 14, 2009)
• "N.J. Senators Set To Fight For Budget Priorities" (Philadelphia Inquirer — May 18, 2009)
• "NJ Lawmakers Wants To Cut Rebate For Some Seniors" (NJBIZ — May 13, 2009)
• "Plan Would Cut Seniors' Rebates, Sparing Programs" (Star-Ledger — May 13, 2009)
• "Statehouse Press Conf. Sen Vitale & Advocates Oppose State Budget" (NewsBlaze — May 12, 2009)
• "Vitale Statement On Health Care Cuts In FY 2010 Budget" (PolitickerNJ — May 12, 2009)
• "Sen. Vitale Joins Chorus Protesting Budget Cuts To Health Care" (NJBIZ — May 12, 2009)
• "Sen. Menendez Meets With N.J. Health Officials Over Upcoming Reform Debate" (Star-Ledger – April 7, 2009)
• "Bill Would Help Ensure NJ's Hospitals Are Safe" (MyCentralJersey.com — February 19, 2009)
• "Sen. Vitale Discusses Health-Care Plan" (Home News Tribune / MyCentralJersey.com — July 16, 2008)
• Health Care Coverage For All, But At What Cost?" (NJBIZ — July 14, 2008)
• "Advocates Vow $40M To Push For Health Care" (Daily Record — July 9, 2008)
• "Health Care Advocates Unite" (CourierPostOnline — July 9, 2008 )
• New Group Demands Health Care Reform" (New York Times — July 8, 2008)
• Coalition To Lobby For US Health-Care Reform" (Reuters — July 8, 2008)
• "Alliance Launches $40M Campaign For Universal Health Care" (Asbury Park Press — July 8, 2008)
• "Corzine Signs Bill To Widen N.J. Health Care As National Effort Kicks Off" (Press of Atlantic City — July 9, 2008)
• "Alliance Launches $40M Campaign For Universal Health Care" (Daily Record — July 8, 2008)
• "Organization Calls For Quality Affordable Healthcare For All Americans" (NBC News Channel 40 — July 8, 2008)
• "Health Coverage For All Kids Makes Fiscal Sense" (Asbury Park Press — June 8, 2008)
• "Plan To Mandate Health Insurance For NJ Kids Advances" (Asbury Park Press — May 16, 2008)
• "Employers Pay More For Health Insurance" (CourierPostOnline — April 30, 2008)
• "Health Care Tops Agenda Of Reform Lobbying Day" (New Jersey Jewish News — April 3, 2008)
• "New Jersey To Consider Health Plan To Cover All" (New York Times — March 18, 2008)
• "Senator Crafting Plan To Provide Health Insurance To All New Jersey Residents" (Insurance & Financial Adivsor — March 13, 2008)
• "Senator To Unveil N.J. Health Care Plan" (Daily Journal — February 25, 2008)
• "No Health Insurance — Universal Coverage Law Proposed" (Asbury Park Press — February 24, 2008 )
• "New Jersey Lawmakers Hold Conference To Discuss State Health Care Reform" (Kaiser Network — November 15, 2007)
• "Losing Vitale-ity?" (NJ.com — November 14, 2007)
• "Seeking N.J. Health Care Relief" (Bergen Record — November 14, 2007)
  
  
• NEW! All Health Care news articles from both NJ For Health Care and New Jersey Citizen Action.