Health Care Reform - What’s Ahead This Year For New Jersey
Provisions of the Patient Protection and Affordable Care Act are phased in over a ten-year period but important reforms are required to be implemented before year-end.
The uninsured will receive access to coverage through high-risk pools if they are uninsured because of a pre-existing condition. But the complexity of that task presents big challenges.
The federal risk pool isn’t allowed to contract with for-profit companies and creating a new non-profit risk pool is a formidable undertaking. An alternative would be to partner with a state risk pool; 34 states have such programs.
However, New Jersey has no high- risk pool program. Under the federal law, the high-risk plan must cover at least 65% of the costs of care on average and caps out-of-pocket charges at $5,950 a year for an individual or $11,900 for a family. It can’t exclude coverage for pre-existing conditions.
Since New Jersey has no high-risk pool, legislation will need to be passed to create one before year-end. With the focus on cutting the state budget, it is unclear at this time whether there is sufficient attention on this issue. In fact, the states are required to implement much of the reform, including a purchasing exchange, in 2014.
Also in 2010, insurance companies will be barred from dropping coverage when a person gets sick and also will not be able to deny coverage to children when they have pre-existing conditions. At present, the insurance carriers read this requirement as covering the costs of children with pre-existing conditions who are already insured. Regulations will be issued to clarify that insurance companies must accept children with pre-existing conditions who lack insurance. Litigation is sure to follow to resolve this disagreement.
Small employers can receive tax credits to purchase insurance in 2010 (see March 19th post) and children can remain on parents’ plans until they are 26 years old. Implementation is expected within 90-days.
