NJ Prepares for Consumer Activity on State-Based Exchanges
As NJ officially starts its anticipated metamorphosis, it seems state-based exchanges, which states were once in a hurry to desert, are now on the rise.
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- The New Jersey Department of Banking and Insurance announced that it will offer $2 million for health navigators to help enrollees and re-enrollees with the transition from a federal-facilitated exchange (FFE) to a state-based exchange on a federal platform (SBE-FP) and eventually an autonomous state-based exchange (SBE).
“New Jersey’s transition to a state-based exchange will allow the state to build on efforts already made to improve access to health coverage,” explained Department of Banking and Insurance Commissioner Marlene Caride. “Through the establishment of a state-based exchange on the federal platform, we are able to demonstrate a greater commitment and investment in outreach and enrollment assistance that the federal government has refused to provide in recent years. This means that for the approaching Open Enrollment Period we can connect more New Jerseyans to information about coverage and ensure that residents who need help enrolling or re-enrolling in health coverage will have the support they need.”
As open enrollment draws closer for the marketplace, this $2 million funding boost will go a long way to support the developing exchange through its first open enrollment.
The state will designate health navigators who can help guide potential enrollees and re-enrollees through the enrollment process. The health navigators may also support the state in reaching out to potential enrollees and educating New Jersey residents on their healthcare options.
Organizations may qualify to provide health navigators if they have already done so in the past or if they have served as a certified application counselor designated organization (CDO). In the latter role, CDOs receive a grant to conduct an outreach program.
READ MORE: New Jersey to Establish State Health Insurance Exchange
The state’s Department of Banking and Insurance pointed out that because it abandoned the federally-facilitated exchange but remained on the federal platform, New Jersey had access to much more funding than it otherwise would have. Last year, CMS cut federal funding for health navigators from $36 million to $10 million for 2019. Of that $10 million, New Jersey received $300,000, a $100,000 decrease from previous year’s allotment.
Because the state can use its own funding this year, it was able to add over six times that amount to its enrollment fund.
Although the state announced its decision to shift away from federal funding in March 2019, New Jersey’s state-based exchange is officially barely a month old. The governor signed it into legislation in June 2019 and in September CMS accepted the legislation.
As a state-based exchange, New Jersey’s state government is responsible for approving qualified health plans (QHPs), setting up assisters to help with the enrollment process, and conducts outreach to the state population.
However, since it is still associated with the federal government, SBE-FPs are offered on the federal website Healthcare.gov. After remaining for a year on the federal platform, New Jersey intends to transition toward complete autonomy from the federal exchange
READ MORE: New Jersey Gains CMS Approval for Reinsurance Program
The website is not the only tool SBE-FP states receive from the federal government. They also can utilize the federally-facilitated exchange’s health information technology systems and the call center.
Just a year after the Affordable Care Act passed, the future looked grim for state-based exchanges. The Office of Inspector General (OIG) detailed the barriers to success, which included antiquated and ineffective payment and eligibility systems as well as oversight, grant management, and secure data collection.
As a result, according to a recent Commonwealth Fund analysis, many states buckled under the pressure of widespread technological collapses and political environments. Some abandoned their SBE altogether, whereas others chose to relegate some responsibilities back to the federal government, hence forming an SBE-FP.
However, as the market stabilized, the benefits of SBEs became more obvious.
States found that they could do a lot with the autonomy SBEs offer. The only thing that state officials cited which restricted that flexibility was the federal government, specifically actions by the Trump administration.
READ MORE: CMS Cuts ACA Navigator Funding Grants by $26M for 2019
SBEs also allowed states to evade the federal fee attached to presence on the federally-facilitated exchange (FFE) and to use premium income to benefit the state.
Lastly, states can customize their enrollment platform in order to gather relevant data during enrollment period.
As a result of the market’s stabilization, according to analysts at the National Academy for State Health Policy (NASHP), by early 2019 the forecast started taking a positive turn.
Although SBE enrollment continued to hover at the very low level of around two to three million beneficiaries in the five years between 2014 to 2019, the states managed to control their premium growth at an annual compound growth rate of around 9.1 percent, which was over five percentage points less than the federally-facilitated exchange.
Additionally, competition was higher in SBE than FFE and the states’ more relaxed parameters gave room for innovation as seen in the $200 million worth in federal grants awarded to SBEs.
States planning to transition to an SBE model in 2021 include Maine and Pennsylvania.
