Uncertainty is in generous supply when it comes to the Affordable Care Act, but one expert said today's first look at pricing from the federal government has some good news for New Jersey.
Compared to what they pay now, in the Garden State, residents will pay lower prices for health insurance next year — "in some cases quite a bit lower," said Joel Cantor, director of the Rutgers Center for State Health Policy.
Cantor bases his comments on an analysis he performed of a Health and Human Services report on average prices for the insurance marketplace where individuals and families will shop for coverage.
Cantor said even consumers who earn too much money to get federal subsidies on the marketplace will pay substantially lower premiums than the rates insurers are charging today for standard health insurance policies.
However, it's important to note that the HHS figures are statistical averages — during a conference call with reporters on Tuesday, federal officials said the actual plans and their prices won't be made public until Oct. 1, when insurers start selling policies on the marketplace.
It's still good news, said Jeffrey Brown, chief of staff of the New Jersey Health Care Quality Institute.
The report suggests "competition is, in fact, bringing down prices," he said. "However, in our state, there definitely is clear room for improvement. If you don't qualify for (subsidies), there will be significant costs to buy insurance, even though the rates are lower than what is now available on the individual market."
Right now, there are more than 100,000 New Jerseyans covered in the state's individual market, but only about 30,000 purchase standard plans, because the premiums are so high. Most purchase bare bones plans — called basic and essential — which will no longer be available in 2014, as they don't provide the level of coverage required by the ACA. Cantor said consumers trading up from B&E policies will get a better deal on standard ACA policies.
Cantor said premiums for standard policies "have skyrocketed over the years, because it's become a haven for people with very high health needs — and that has driven up the premiums."
HHS is reporting lower average premiums due to the expectation that healthier people will be paying into it.
Insurance companies, Cantor said, "are clearly anticipating that in these premiums. Which, of course, was one of the aims of the ACA — to broaden the risk pool. So it looks like the insurance companies are agreeing that that is likely to happen."
Insurers said consumers' cost concerns remain top of mind for executives. In an email, Mike Munoz, senior vice president of sales and marketing for AmeriHealth NJ — one of three insurers that will take part in New Jersey's exchange — said New Jersey's reputation is part of that problem.
"Our goal is to provide quality care at the most affordable cost," Munoz said. "The cost of care in our state is known to be one of the highest in the nation. New Jersey is also a heavily mandated state, which leads to increased costs."
Take a single, 27-year-old woman with no dependents. Today, Cantor said, a standard HMO runs her $783 a month, at best, while a B&E plan would cost $318 a month. Without a tax credit, she'd pay $260 a month for an ACA benchmark silver plan.
"For roughly the same price, you are trading in a bare-bones plan for a comprehensive plan, and getting much more for roughly the same price," he said.
John Sarno, president of the Employers Association of New Jersey, said the average premiums reported for New Jersey appear favorable, which is key for small businesses.
"Most of the uninsured in New Jersey work at a low-paying job for a small employer. And so that means they are going to be eligible for subsidies — and as long as that occurs, it looks like pretty good deal," Sarno said. "The pricing is exactly in that sweet spot of working people who make too much money to be eligible for Medicaid."
At Horizon Blue Cross Blue Shield of New Jersey, another participant in the Garden State exchange, there was little surprise from the report.
"New Jersey's premiums are among the highest in the nation already, so this news is not surprising," said spokesman Tom Vincz. "Premiums reflect the underlying costs of health care — costs for physician and hospital services and prescription drugs. In New Jersey, these health care costs continue to rise."
He said the insurer — New Jersey's largest — has a number of products ready to offer once the exchange goes live.
While the full details on pricing, as mentioned earlier, won't be known until New Jersey's marketplace goes live Oct. 1, "the bottom line is that it's looking good, it is a good start to make New Jersey's individual market much healthier than it has been the last few years," Cantor said. "And the subsidies will help low-income people quite a bit."
Brown said he agreed.
"The rates are better than what was expected," he said. "If I was an uninsured New Jerseyan, or had any uninsured family members, I would certainly look at these products come October."