Governor Phil Murphy announced Friday that individual market health insurance rates will decrease on average by about 9.3 percent for 2019 in New Jersey.
He said the reduction in health insurance rates is the result of New Jersey continuing the individual mandate after it was eliminated by the Trump Administration at the federal level. A reinsurance program will be implemented in New Jersey in 2019.
“Our work is based on the core belief that health care is a right, not a privilege,” Murphy said. “Federal attacks on the Affordable Care Act and rising costs of health care have made premiums less affordable for residents buying plans on the individual market…My administration remains committed to doing everything it can to improve access to coverage and care.”
According to state officials, as a result of the continuation of an individual mandate in New Jersey, carriers requested a 5.8 percent average increase in premium rates for 2018. The federal approval of the 1332 State Innovation Waiver in August, which is designed to lower anticipated premium rate increases, resulted in an average decrease of 9.3 percent in 2019 rates compared to 2018 rates, officials said.
Department of Banking and Insurance Commissioner Marlene Caride signed the reinsurance program agreement Friday and submitted it to the Centers for Medicare and Medicaid Services. The program approval is for a five-year period from 2019 to 2023.
Created under the New Jersey Health Insurance Premium Security Act, the reinsurance program will reimburse insurers for certain high-cost claims in the insurance market. The program is designed to lower premiums by 15 percent compared to what they would have been without the program. Under the parameters for 2019, the program will reimburse 60 percent of claims between $40,000 and $215,000 worth of claims generated by an individual in a single year. The program will be funded by three sources: Federal funding granted through the waiver, revenue from the individual mandate, and, if necessary, an annual appropriation from the state’s general fund.
The state level individual mandate, established by the New Jersey Health Insurance Market Preservation Act, takes effect Jan. 1. Open enrollment for 2019 New Jersey plans begins Nov. 1.