INDIVIDUAL HEALTH COVERAGE PROGRAM
20 West State Street, 10th Floor
P.O. Box 325
Trenton, NJ 08625
Phone: (609) 633-1882 x50306
Fax: (609) 633-2030
APRIL 11, 2003
CONTACT: Ellen DeRosa 609.633.1882 x50302 or Wardell Sanders x50306
Individual Health Coverage: New Plan Option
Carriers that sell individual health coverage are making available a new limited benefits plan called the "Basic and Essential Health Care Services Plan," the New Jersey Individual Health Coverage ("IHC") Program has announced. Consumers who are residents of New Jersey and not eligible for group coverage or Medicare may apply for this new plan, or any of the standard plans that have been and continue to be available to individuals. The new plan must be offered by all carriers writing individual coverage.
Consumers will need to carefully review the plan to determine whether the limited plan provides the type and extent of coverage they desire. The benefits included in the new basic plan were designated by the Legislature to provide a more affordable option compared to the five standard individual health coverage plans that provide comprehensive major medical coverage.
In enacting the law, the Legislature indicated its intent was for individuals to
have the option to purchase plans that provide for "reimbursement for basic and essential health care services but do not contain either the traditional mandated benefits to which the standard plans are subject or reimbursement for services which the consumer can more economically pay for himself, rather than having those services paid for through a third-party system, which adds significantly to the cost."
The plan provides the following basic benefits, which are subject to specific copayments, deductibles and coinsurance: 90 days per year for hospitalization; $600 per year wellness benefit; $700 per year benefit for practitioner visits for illness or injury; $500 per year benefit for out-of-hospital diagnostic testing; and limited benefits for biologically based mental illnesses, alcohol and substance abuse, and physical therapy.
The plan does not cover certain benefits that some consumers may have come to expect in health plans. For example, the new plan does not provide coverage for chemotherapy, outpatient drugs, pre-natal care, ambulance services, speech and occupational therapy, chiropractic care, home health care, hospice care, or prosthetic devices. These are only some of the benefits are excluded. Carriers are permitted, but not required, to offer the plan with optional benefit riders that increase the benefits of the plan; such riders would come at an additional cost.
In an attempt to attract more younger consumers and consumers with a better risk profile to the individual market, the Legislature has permitted carriers to rate the new plan using factors for age, gender, and geographic location. In contrast to the existing standard individual plans, which are community rated, the new plan may have premium rates that vary by the factors noted above, but by no more than a 3.5 to 1 ratio. The rates that carriers have filed for the plan to date vary widely by carrier.
Consumers will need to contact carriers directly to determine the premium rate for the plan. A list of the carriers offering the Basic and Essential Health Care Services Plan and the five standard plans, their toll free numbers, and the community rates for the existing standard plans are published monthly by the IHC Board and are available on the internet at "www.nj.gov/dobi/reform.htm" and by calling 800.838.0935.