TRENTON – Legislation to create a state health insurance exchange, a competitive marketplace where individuals, families and employers will be able to purchase affordable, quality health care coverage, was approved Monday by the Senate Commerce Committee.
Required under the Patient Protection and Affordable Care Act signed into law by President Obama in 2010, health insurance exchanges are intended to provide an organized and transparent marketplace for consumers to purchase health insurance. The state exchange would be a one-stop shop for individuals and employers seeking coverage, providing easy-to-understand information about health insurance options which would allow consumers to compare coverage, cost and value of participating plans. It also would provide a streamlined process for individuals and businesses to apply for private insurance, Medicaid, NJ FamilyCare, federal tax credits or other subsidies to be used towards the cost of insurance, through the use of a single website.
“The health insurance exchange is intended to capture the hundreds of thousands of residents who are uninsured by offering affordable health plans and providing clear information to consumers about the coverage available,” said state Sen. Nia H.Gill (D-Essex), chair of the Senate Commerce Committee. “Through a central virtual marketplace, residents and businesses will be able to purchase health care coverage and to apply for additional financial assistance offered by the government to make insurance more affordable. This system will allow all New Jerseyans to obtain the most appropriate health care coverage at the most competitive rates.”
The health insurance exchange would be established “in but not of” the Department of Banking and Insurance and would be independent of any supervision or control by the department. It would be governed by an eight-member board to include as non-voting ex-officio members the commissioners of the Department of Banking and Insurance and Human Services, or their designees, and the chairperson of the Board’s Advisory Committee, a panel of stakeholders who will provide input to the governing board. The final five members of the governing board would be residents of the state appointed by the governor with advice and consent of the Senate as follows: one person who is a member of the American Academy of Actuaries, two persons recommended by the Assembly Speaker and two persons recommended by the Senate President, each with knowledge and expertise in specific areas. The board would appoint and set compensation for an executive director; board members would serve terms of four years.
The governing board of the exchange would:
- Certify health care plans offered by the Exchange and facilitate the purchase of plans by individuals.
- Establish the State Business Health Options Program (SHOP) to assist participating employers in facilitating the enrollment of their employees in qualified plans;
- Create and offer a Basic Health Plan to enable uninsured persons with incomes of between 133 percent and 200 percent of the federal poverty level to purchase essential health benefits through the provision of federal funds pursuant to the federal act;
- Develop and implement a plan of operation for the exchange, including the procedures and minimum requirements for the selection, certification and recertification of qualified plans;
- Provide a customer service center and an Internet website that provides standardized comparative information on qualified plans, as well as an online calculator that will allow consumers to determine the cost of a plan after any premium tax credits or subsidies ; and
- Apply for any available federal funding.
Should a state fail to implement an exchange, or be determined by the US Secretary of Health and Human Services no later than January 1, 2013 not to be sufficiently far along in implementation and ready to perform all exchange functions on January 1, 2014, the federal government will administer the exchange in that state.
“We are making progress toward implementing federal health care reform in New Jersey and ensuring coverage for the 1.3 million New Jerseyans without insurance,” said Gill. “The state-operated health exchange will provide greater financial and health security to these individuals, offering them affordable and clear options for coverage. At the same time, a state-operated system will ensure close oversight of the state’s health insurance market and fair competition among carriers.”
The bill would establish the New Jersey Health Benefit Exchange Trust Fund in the Department of Treasury to be the repository for monies collected from carriers and other monies received as grants or otherwise appropriated for the purposes of the Exchange. The monies in the Fund could only be used for the purpose of supporting the activities of the Exchange.
The legislation would take effect on the first day of the seventh month following enactment, but would authorize the Commissioners of DOBI and Human Services to take anticipatory administrative action in advance as necessary for its implementation. The committee approved the measure by a vote of 4-2. It now heads to the full Senate for a vote.
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