While New Jersey's business groups support the idea of a health insurance exchange, they oppose an Assembly committee's attempt to create it, citing measures in the proposed legislation to increase regulatory burdens and limit health plan options for small businesses.
At a committee hearing today on the Health Benefit Exchange Act, A-3186, Christine Stearns, vice president of health and legal affairs for the New Jersey Business & Industry Association, said the health exchange advisory board and board of directors included in the bill would lack representation for small-business health plan purchasers "who have experience with shopping for coverage and making choices," as well as have the power to block insurance plans from entering the market — including those already meeting state and federal standards under the Affordable Care Act.
"Having an array of choices in health plans is what's important to small businesses. If the board is able to limit and block some of those choices, it won't benefit consumers as it's intended to do," Stearns said. "We'd like to bend the cost curve through an exchange … and we want to set up the bureaucracy needed to achieve that goal."
But Dr. Herb Conaway Jr. (D-Delran), chair of the Assembly Health and Senior Services Committee, said the boards wouldn't limit the number of insurers entering the exchange, noting, "I don't believe we're going to be able to provide insurance to those who need it if the exchange goes about keeping (plans) out of the marketplace."
Still, Wardell Sanders, president of the New Jersey Association of Health Plans, said in his testimony the language of the bill "empowers (the boards) to say to insurers, 'We're not going to let you offer your product on our exchange because your rate increase of 'x' amount is too much.' "
"That component would screen otherwise valid plans that are more expensive than others, and we want the consumer to make that choice, not the board," Sanders said. "To have the government step in and say your rates are higher, so it's screening your product — which has more value for the consumer, even though it costs more money — would not help insurers or consumers."
Sanders said another issue with the bill is that insurers would have to foot the bill for the implementation of the exchange, which he said costs roughly $40 million a year in Massachusetts.
"The Affordable Care Act does good things to address and lower costs … but this is one side of it that is going to increase costs," he said.
But Raymond Castro, an analyst for New Jersey Policy Perspective, said if the state legislators succeed in their attempt to establish a health insurance exchange and implement public outreach efforts before the Oct. 1, 2013, deadline for uninsured state residents to apply for health coverage, it will result in "major state savings" from federal subsidies and grants.
Diane Walsh, vice president of government affairs for the Commerce and Industry Association of New Jersey, said at the hearing "with the number of insurers shrinking in the individual insurance market, all willing carriers should be able to participate" in a state-run exchange, echoing Stearns' argument that the bill would limit small employers' health plan options.
Conaway said he "would certainly like to see additional players in the marketplace to offer more choices," but "we're already an open marketplace — so if (insurers) were going to be here, they would be here already."
The measure advanced out of committee to the state Assembly; a companion measure passed in the state Senate last week despite a similar skeptical response from business groups. Gov. Chris Christie vetoed an earlier version of the bill, and previously said he is waiting until early 2013 to decide whether to create a state-run exchange.
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