New Jersey's five health insurers already are bracing for sweeping changes under the Affordable Care Act. Now, there's another wrinkle on the horizon — a new competitor, the Freelancers Co-Op of New Jersey, a nonprofit health plan being funded by federal loans via the ACA.
Freelancers, which hopes to get its license to sell insurance early next year, will be owned and run by its members, said CEO Tom Dwyer.
"We have a mandate from the federal government to innovate," Dwyer said, and to that end, Freelancers will align itself with primary-care providers who embrace electronic records and patient-centered medical home models to elevate quality and rein in costs. A PCMH is health care model that aims to provide structured, coordinated care for patients, rather than episodic treatments for illnesses.
The startup insurer has five employees, and "over the next year, we will be hiring staff at every level — IT, marketing, underwriting," said William Megna, its attorney. "We are fortunate that New Jersey has a good population of skilled insurance professionals."
Freelancers will partner with QualCare, whose network of hospital and health care providers serves self-insured employers. Freelance workers and the self employed are the target market, and Dwyer said he hopes to enroll 50,000 to 60,000 members over the next few years.
QualCare CEO Annette Catino said Freelancers will enable its members to join accountable-care organizations being launched by Medicare under the ACA. Those ACOs represent a new approach to health care delivery that seeks to coordinate medical care, engage patients in their own wellness, and improve health and control costs.
"The members will be picking their primary care physicians right out of the gate," instead of being told which doctors are in their network, Catino said, and members of the same family will be able to choose different ACOs. Catino said Medicare has approved three ACOs so far in New Jersey, with five others are under review. "We are going to build the Freelancers Co-Op product around those ACOs," she said.
Elsewhere in New Jersey, insurers are counting the days to Dec. 14, when Gov. Chris Christie must decide whether New Jersey will run its own exchange, create a hybrid with the federal government or toss the whole job into Washington's hands.
Last week, Christie vetoed a bill to create a state-run exchange, saying he needs more information from the federal government on how much a state-run exchange would cost. Christie could bypass the Legislature and create an exchange via executive order.
Horizon Blue Cross Blue Shield of New Jersey, the state's largest insurer, has about 100 people working to build an exchange platform "to serve more customers, provide more choice and hopefully provide a consumer-friendly way to shop for insurance," said Larry Altman, vice president and head of the office of health care reform. Horizon's technical experts are creating a system to manage the huge data feeds that will flow into the company, so it can determine eligibility for the federal subsidy dollars that will make New Jersey's high-cost insurance affordable for moderate-income residents.
Those subsidy dollars are huge: In 2011, the Urban Institute estimated New Jersey would get about $700 million a year in premium subsidies for those with incomes above Medicaid guidelines and up to 400 percent of the federal poverty level. For example, according to an online calculator offered by the Kaiser Family Foundation, a family of four earning $35,000 a year with an annual health insurance premium of $14,556 would receive a $13,168 federal subsidy, with the family paying the rest. The Rutgers Center for State Health Policy has estimated more than 300,000 New Jerseyans could be eligible for subsidies on the exchange.
Horizon expects to hire more employees to serve exchange customers: "We will have more claims coming in and more customer service calls," Altman said. And since many will previously have been uninsured, "they will have more needs, in terms of understanding the products and navigating the health care system — and we will be prepared with the processes and the technology and the people."
Ryan Petrizzi, director of sale operations and small markets for AmeriHealth New Jersey, called the exchange "a very big opportunity. There are going to be a huge number of new consumers in New Jersey who don't currently have insurance, and being able to work with those folks and help them get insurance is very important."
Several insurers said they hope that Trenton creates an exchange that encourages competition. Charlie Catalano, president and general manager for Cigna in New Jersey, said the exchanges "should not limit competition or impose additional regulations that conflict with the existing marketplace." An Aetna spokeswoman, Susan Millerick, said the insurer is "committed to providing affordable, high-quality health care options" for consumers, many of whom will visit this exchange as part of "their first time shopping for health insurance."
UnitedHealthcare has not yet decided which state exchanges it will join, owing to "the regulatory variation from state to state — and many states have not yet formalized their exchange models," said Michael McGuire, CEO of UnitedHealthcare New Jersey.
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