Federal officials gave New Jersey the green light to roll out its reinsurance program, aimed at lowering health care premiums for the state’s insurance carriers by as much as 15 percent, the New Jersey Department of Banking and Insurance said.
The reinsurance program was an Obama-era tool, part of the Affordable Care Act, which was aimed at keeping health care premiums low across the board.
With the U.S. Department of Health and Human Services having approved New Jersey’s Section 1332 State Innovation Waiver, required to implement the statewide reinsurance program, DOBI officials predict health care premiums would be 15 percent lower than they would have been without the reinsurance program in place.
“Under the waiver, New Jersey will receive federal funds to cover a substantial portion of state costs for the reinsurance program. The state has requested $218 million in federal pass-through funds to support the program for 2019,” according to DOBI.
Gov. Phil Murphy signed a law in May which would create a similar program, funded by penalties from residents who didn’t meet the state’s individual health care mandate.
“The reinsurance program is an innovative way to increase stability in the insurance market and reduce costs to consumers,” said DOBI Commissioner Marlene Caride. “Ultimately, this is about creating greater access for residents in the state to the coverage and care they deserve.”
Murphy, in a statement, said that “healthcare is a right, not a privilege.”
“This program is a significant step in our effort to link families to the health care access they need,” Murphy said.
The New Jersey individual mandate will go into effect Jan. 1, when the ACA mandate is scheduled to end. Open enrollment begins Nov. 1.