Active or Passive: The Role of a New Jersey Health Insurance Exchange
Seton Hall Law Center for Health & Pharmaceutical Law & Policy, August 2012
46 Pages Posted: 9 Nov 2012
Date Written: August 8, 2012
Health insurance exchanges are intended to organize the health insurance marketplace for the benefit of individuals and small businesses, a marketplace that many find confusing and increasingly expensive. New Jersey has two decades of experience with efforts to bring efficiency and transparency to this market. The Affordable Care Act (“ACA”) envisions Exchanges with powers and duties that go beyond New Jersey’s existing Individual Health Coverage Program and Small Employer Health Benefits Program. How much further the Exchange’s powers and duties ought to go is politically and practically contested. In particular, there is sharp dispute in New Jersey and elsewhere over the degree to which Exchanges should be active purchasers, directly bargaining with carriers to give consumers the bargaining clout enjoyed by large employers, or open marketplaces, arming consumers and small businesses with information to empower them to choose from among the array of products offered by willing insurers.
This Brief will provide information and analysis to help assess the costs and benefits of New Jersey’s options. It will describe time frames for decision, and the options for New Jersey to build its own Exchange, leave the task to the federal government, or act in partnership with the federal government. It will describe past and pending New Jersey legislation and gubernatorial response, and decisions made in other states grappling with the role of their Exchange. After the Supreme Court’s decision largely upholding the ACA and the reintroduction of the Exchange bill in the New Jersey Legislature, the issue of New Jersey’s Exchange is back on the public agenda.There are four domains of tasks for which the Exchange will be responsible; within each domain are tasks that the ACA requires, and tasks that New Jersey can assign to the Exchange at its option. The four domains are: 1) Information: providing or facilitating the provision of coverage information to consumers through hotlines, on-line calculators, and Navigator services. 2) Eligibility and enrollment: facilitating or accomplishing the enrollment and reenrollment of consumers in public and private insurance plans. 3) Financial management: maintaining a self-sustaining income stream, maintaining accurate accounting of activities, granting exemption from individual responsibility for coverage, and assessing and transferring to the Secretary of the Treasury information on individual exemptions and employers whose employees were eligible for an unaffordability exemption or a tax credit because the employer did not provide minimum essential coverage. 4) Private plan selection and management: screening plans in and out of the Exchange market, and overseeing the activities of Exchange plans.
Keywords: New Jersey Health Insurance Exchange, Center for Health & Pharmaceutical Law & Policy, Health Law, John Jacobi
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