New Jersey’s health insurance market for individuals will see an average rate decrease of 9.3 percent next year, thanks largely to a new state reinsurance program approved last month by the federal government. The program is part of a legislative package that imposes a state-level individual mandate to get insurance coverage and is designed to stabilize insurance prices.
“We have taken deliberate actions to defend the gains made by the Affordable Care Act, and our work is demonstrating results,” Gov. Phil Murphy said in announcing the decrease.
The savings will come from the state reimbursing individual health insurance carriers for a portion of the certain high-cost claims. In 2019, the program will reimburse 60 percent of claims between $40,000 and $215,000.
The program will be funded by three sources: funds collected under New Jersey’s individual mandate and shared responsibility tax; federal pass-through funding granted by the waiver; and, if necessary, an annual appropriation from the state’s General Fund.
“Without these actions by the state, rates would have increased by double digits over last year; instead, residents will see a decrease in the cost of health insurance for the upcoming plan year,” DOBI Commissioner Marlene Caride. “This is major progress for New Jersey, and it is contrary to the experiences of other states in the nation. We are committed to defending access to coverage and care and look forward to continuing our work to address affordability for New Jersey residents.”