Tonight the NJ Senate passed the NJ State Health Insurance Exchange Bill. The news is exciting for many New Jerseyans as it shows some promise for lower premiums in the future. The NJ Health Insurance Exchange bill will create an online marketplace for individuals and businesses to review all of their options in one place. In addition to making it easier to purchase insurance, the goal is bring down the prices for insurance in NJ. This would be fantastic as I have personally seen many companies rates that have doubled or tripled in the past five years.

Now before we all get googley eyed over the new bill, I have some concerns over how much the exchange can actually help our high NJ Health Insurance premiums woes.

New Jersey Health Insurance Exchange – Concerns

1. What does affordable health insurance mean? In my opinion, this really needs to be answered with real numbers and not just saying “it’s more affordable”. If they an bring an HMO monthly premium from $600/month for a single down to $400/month, that would be quite a feat. At $400 a month though, is it affordable enough for people to buy? Maybe yes, maybe no?
2. How do they expect to to bring down price levels to affordable levels?
3. When merging the individual market with the small group, how much can we anticipate rates to go down?
4. Just because we can purchase online, (we can already do this) why is it now magically less per month? And how much less?
5. Competition is great and this should also help bring premiums down. But, how much??? There will be more companies trying to get their rates down with aggressive contracts with their physician networks and also by spending their money more efficiently. Should we expect smaller networks, more troubles getting services approved? How much less can we pay the doctors before they just give up and quit?
6. Many small businesses rely on brokers to lend a helping hand with managing their plan. Will brokers be playing a major part in the exchange? If not, businesses must be trained and prepared to handle NJ Continuation, COBRA, claims, quoting, compliance, adds, changes, terminations of employees etc… Brokers act as an additional human resources department for many of the smaller businesses without a large office staff.
7. New Jersey Protect was recently added to the NJ portfolio and it’s goal was to provide more affordable coverage. How many people have we actually enrolled in this program? My guess is not many. I give people premium rates for these plans almost every day and the response is always the same, “too much money”.  NJ Protect is considerably less in premium per month than the standard individual plans.

It may seem that I have a bad feeling about the exchange, but really my concern is with how much premiums are going to be. Are we just adding one more program that nobody can afford? New Jersey has a very large uninsured pool despite that fact that we have NJ Family Care, Medicaid, Medicare, individual health, NJ Protect, small group health, large group health, NJ Continuation, COBRA, DU31, Dep-26 and I’m sure there are even more programs. Basically, if you have the money, you can have insurance.

What I do like about the exchange is that it will certainly make it easier to understand the different programs and options. A singular place to look for insurance will be very helpful especially with the different eligibility requirements for each of the plans.

If you have an opinion on the New Jersey Insurance Exchange or think my ideas are completely wrong or misguided, I would love to hear about it.