TRENTON —The New Jersey Department of Banking and Insurance today announced that most consumers enrolled in health insurance this fall on the new State-based Marketplace – Get Covered New Jersey – will see a reduction in their monthly health insurance premiums in 2021 as a result of state subsidies available for the upcoming plan year.
Health insurance rates in the individual market, for plans sold on and off the Marketplace, will increase on average by 3.3 percent for plan year 2021. However, because of new state subsidies that will be available to many consumers, the average monthly premium for subsidy-eligible Marketplace enrollees is projected to be lower than last year – reduced from an average of about $164 a month in 2020, to an average of $117 a month in 2021, an estimated 29 percent reduction. Nearly eight in 10 consumers purchasing coverage on the Marketplace will be eligible for state subsidies.
“The COVID-19 public health emergency has demonstrated the importance of providing access to quality affordable health coverage to our residents, and because of our move to a State-based Marketplace we are able to provide additional financial help to make coverage more affordable for residents and a reality for more families,” said Commissioner Marlene Caride. “New Jersey has worked to ensure that access to quality affordable health coverage is the highest priority. Rates were held down for the upcoming plan year, and many residents will now get additional financial help to purchase health insurance as a result of the work of this administration.”
Governor Phil Murphy’s Administration has taken numerous actions to improve access to health coverage, including the creation of a reinsurance program, instituting the shared responsibility requirement, and establishing a State-Based Exchange. In prior years, these actions have lowered insurance rates in the individual market by 22 percent compared to what they otherwise would have been, and set the foundation for improved access to health coverage in New Jersey.
The Governor took additional action in July to increase affordability and expand access to health care, signing a law creating state-level subsidies to lower the cost of health insurance for residents purchasing coverage on the Marketplace this fall. The subsidy program will be available to New Jerseyans with annual income up to 400% of the Federal Poverty Level, which allows an individual earning up to $51,040, and a family of four earning up to $104,800, to qualify for subsidies. The estimated average subsidy for an individual would be at least $578 a year, and at least $2,313 a year for a family of four. Final subsidy amounts will be based on an actuarial simulation study being conducted by the Department of Banking and Insurance in order to maximize the benefit for New Jerseyans.
State subsidies will give current subsidy-eligible enrollees flexibility to either enroll in the same plan, but at a lower premium rate, or “buy up” to a plan for which their expected plan‐level cost sharing would be less (for example, from a plan with a $3,500 deductible to one with a $1,500 deductible).
About 316,000 consumers purchase health coverage in the individual market. New Jersey will transition from using the federal Marketplace, healthcare.gov, to a State-based Exchange, also referred to as the Marketplace, Get Covered New Jersey, for the Open Enrollment Period beginning November 1, 2020 and ending January 31, 2021. State subsidies are only available to lower the cost of plans purchased on the Marketplace, and will be offered in addition to federal tax credits available to those making up to 400% of the Federal Poverty Level.
Rates for 2021 in the individual market will increase on average by 3.3 percent over 2020. Rates in the Small Employer Market will increase on average by 2.5 percent over last year. Rate increases in the individual market are attributed largely to medical trend.
During the COVID-19 public health emergency, insurers in 2020 have seen a decrease in medical claim costs due to reduced utilization of services, such as postponement of elective surgeries and other medical services. It is unclear if these services will be made up later in 2020, pushed into 2021, or never fully utilized. However, insurers are required under the Affordable Care Act to use 80 percent or more of premium for the payment of claims, and return excess premiums to policyholders. Once the full 2020 experience is available, the department will conduct an analysis next year and determine if rebates are owed to consumers based on all claims paid in 2020.
Rate filings submitted by carriers are reviewed by the Department to ensure compliance with state law. By law, rate filings in the individual and small employer markets are informational and not subject to prior approval; however, the Department may disapprove any informational filing if the Department finds that the filing is incomplete and not in compliance with relevant laws or that the rates are inadequate or unfairly discriminatory.
Below is the average total rate action by carrier:
Individual Market 2021 Rate Change
| Carrier |
|
| AmeriHealth * |
6.5% |
| Horizon* |
1.1% |
| Oscar* |
6.1% |
| Oxford |
10.4% |
| Average |
3.3% |
*Indicates that the company will offer products on the State based-Marketplace, Get Covered New Jersey for plan year 2021. Only plans offered on Get Covered New Jersey will have access to the new State Subsidies.
Small Employer Market 2021 Rate Change
| Carrier |
|
| AmeriHealth |
8.7% |
| Horizon |
5.6% |
| Oscar |
11.2% |
| Oxford |
-7.6% |
| Average |
2.5% |
|
