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New Jerseyans paying more than national average for Affordable Care Act plans

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New Jerseyans are paying more than the national average for ACA plans.
New Jerseyans are paying more than the national average for ACA plans. - ()

New Jerseyans are paying an average of $148 a month, after government subsidies, for health plans purchased on the new Affordable Care Act Marketplace that launched Oct. 1 on HealthCare.gov.

While that’s far higher than the national average of $69 a month, according to figures released today by the federal Department of Health and Human Services, New Jerseyans on average saw a 68 percent reduction in premiums as a result of the federal subsidies under the ACA.  The subsidies are on a sliding scale, up to four times the poverty level, which is about $93,000 for a family of four.

Before the tax credit, the average premium for New Jerseyans was $465 a month. The tax credits knocked $317 off that premium, on average, according to HHS, which reported that 84 percent of New Jerseyans who bought a plan on HealthCare.gov received a government subsidy.

While nationally, consumers on average could choose from five health insurance companies, in New Jersey three companies are competing in the Marketplace: Horizon Blue Cross Blue Shield of New Jersey, AmeriHealth New Jersey and Health Republic Insurance of New Jersey, a new, nonprofit co-op insurer created with loans from the ACA.

HHS released information today on prices at HealthCare.gov, the marketplace the government is running in nearly half the states, including New Jersey, that decided not to create their own state-run marketplace.

Health insurance premiums in New Jersey have long been among the highest in the nation, a trend that is reflected in the new HHS figures.

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Joel Cantor, director of the Rutgers Center for State Health Policy, noted that premiums for New Jersey are high compared with other states. Under the ACA rules: "The amount of administrative costs and premiums that insurers may charge is capped, so our high premiums are driven by the high cost of health care services. Because our premiums are high, New Jersey received among the highest level of federal subsidy per enrollee compared to those in other federal marketplace states."

Cantor said that while  New Jersey insurance buyers are getting more subsidy help than in other states, "These data show that affordability of coverage remains a challenge for many consumers."

Among the individuals who have been purchasing health insurance at HealthCare.gov are many small business owners. Under the ACA, a husband-and-wife-owned business, or a small business with only two partners, is no longer eligible to buy a group insurance policy. Many of these business owners have been able to purchase government-subsidized policies at HealthCare.gov, according to health insurance brokers.

The federal government reported in May that 161,775 Jerseyans bought insurance policies on the Marketplace since HealthCare.gov launched. The health insurers, however, are reporting enrollment numbers that exceed the government’s numbers. And experts predict those numbers will rise, since individuals whose health insurance policies don’t comply with ACA rules will be able to buy new policies on HealthCare.gov through 2014 as their old policies expire.

In May, Horizon reported signing up about 100,000 individual customers on HealthCare.gov for plans effective through May 1. AmeriHealth NJ reported that 80 percent of the 118,766 new members it signed up for plans taking effect through May 1, or about 95,000, came on board through HealthCare.gov. Health Republic Insurance of New Jersey enrolled between 4,000 and 5,000 customers in its first year as a new company, according to spokeswoman Cynthia Jay. She said in its inaugural year, HRINJ “focused on getting out the door as a new carrier and the first and only co-op in the state of New Jersey.”

She said HRINJ is “working on a long term plan to grow our membership each year. We are happy we provided health care options to thousands of New Jerseyans through a co-op structure.”

Between the government subsidies through HealthCare.gov, and the expansion of Medicaid, New Jersey has been able to get about 400,000 people covered, according to Joel Cantor, director of the Rutgers Center for State Health Policy.

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Beth Fitzgerald

Beth Fitzgerald

Beth Fitzgerald reports on health care, small business and higher education. She joined NJBIZ in 2008 after a 34-year career at the Star-Ledger and has been reporting on business in New Jersey since 1978. Her email is beth@njbiz.com and she is @bethfitzgerald8 on Twitter.

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