News Release

New Jersey Department of
Banking and Insurance

Commissioner Ken Kobylowski

For Immediate Release:
November 26, 2013

For Further Information:
Ed Rogan or Marshall McKnight (609) 292-5064

TRENTON – Banking and Insurance Commissioner Ken Kobylowski announced today that health insurers may choose to renew existing health plans as announced by President Obama on November 14, 2013.

“Despite the President’s recent announcement of a fix claiming that individuals will be able to keep their existing coverage, the fact is that many plans cannot be renewed in their current form and face selective enforcement by the federal government,” Commissioner Kobylowski said. “However, while restrictive federal parameters exist, we will cooperate with health insurers that choose to renew these plans.”

Further guidance provided as recently as this week by the federal government makes clear that even if an individual wants to keep their existing coverage in New Jersey, certain provisions will still be altered in order to make each plan consistent with federal mandates. Some of these potential changes include:

• In the individual market, plans that were supposed to be fixed by the President’s recent announcement will still have to eliminate the annual limits; 
• In the small employer market, services that are now covered under an annual cap will have to be revised to remove the cap; and 
• Continuing plans will still be subject to federal Obamacare fees and taxes for 2014.

Because of these changes, despite what the President and the Obama administration has recently claimed, it is anticipated that health insurance costs will increase for New Jersey consumers. 

The most popular plan in the New Jersey individual market is the Basic and Essential Plan, which covers more than 109,000 consumers and currently includes annual limits as a means to keep the premium affordable. Obamacare’s elimination of the annual limits will devastate this plan, and rates may require adjusting to cover the cost of additional requirements.

Today's decision is consistent with the administration's previous actions concerning Obamacare.  In December 2012 when the Governor announced that New Jersey would join 33 other states in choosing a federally-run exchange, he specifically cited the federal government’s inconsistency and inability to explain the costs associated with a state-run version. The most recent developments regarding Obamacare continue to bear this out.  From his December 2012 announcement: “I will not ask New Jerseyans to commit today to a State-based Exchange when the federal government cannot tell us what it will cost, how that cost compares to other options, and how much control they will give the states over this option that comes at the cost of our state’s taxpayers.”

In 2010, New Jersey alerted the Center for Consumer Information and Insurance Oversight of the Center for Medicare and Medicaid Services that many policyholders would not be able to keep their coverage and that the Obama Administration’s grandfathering rules were going to make the problem worse. In a July 15, 2010 letter, then Commissioner Tom Considine proposed five steps the federal government could take to minimize the number of people who would lose their existing coverage, of which the federal government accepted only one. The letter can be found here: http://www.dol.gov/ebsa/pdf/1210-AB42-0095.pdf.