Middle-class New Jerseyans who purchase their insurance in the individual market will pay far less than they otherwise would have next year and for the foreseeable future, according to a report issued Thursday by independent policy analyst New Jersey Policy Perspective.
These major savings will be available to New Jerseyans who exceed the income cutoff for federal subsidies, which is $48,560 a year for an individual and $100,400 for a family of four. According to the report, consumers can maximize saving by selecting a plan before the open enrollment period ends Dec. 15.
The report, “New Jersey’s Individual Market Premiums to be Among the Lowest in the Nation,” calculates the savings to New Jersey consumers purchasing health insurance on the individual market as a result of state health policies enacted in 2018, notably the statewide individual mandate and establishment of a reinsurance fund.
In 2019, the average consumer will save $1,600 on premiums, and all 140,000 middle-class New Jerseyans in the current market will save a total of $3.3 billion over the next 10 years, NJPP said.
“New Jersey is proving that staggering health care costs are not inevitable; they were created by policy choices and can be lowered with policy choices,” said Raymond Castro, NJPP director of health policy and author of the report, in a statement.
“As a result of innovative state health policies, premiums will be 22 percent less than they otherwise would be next year and in the foreseeable future,” he added. “This helps to explain why New Jersey will have the fourth-lowest premiums in the nation next year in the marketplace and cements the state as the national leader in combating the Trump administration’s sabotage of the Affordable Care Act.”
Castro added the savings are a testament to how much can be accomplished in reducing health costs when the state takes an active role in the market to protect consumers.
According to the report, the New Jersey Department of Banking and Insurance estimates the new reinsurance program will guarantee premiums will be 15.1 percent less than they would have been otherwise. The report notes that maintaining the federal individual mandate will further reduce premiums by 6.8 percent, for a total reduction of 21.9 percent. In 2019, the average consumer will pay a premium of $5,700 instead of $7,300, a savings of $1,600.