New York and New Jersey Consider Health Insurance Reforms

Authors:Barak A. Bassman, Sara B. Richman and Tracy Rhodes

6/03/2019 - Pepper Hamilton LLP

Increasing uncertainty and hostility surrounding the federal Affordable Care Act (ACA) have resulted in a burst of health insurance reforms at the state level. For example, Washington recently passed a law creating a public option health insurance exchange.

Now, New York and New Jersey are also attempting to safeguard the ACA’s protections by enshrining and even expanding them at the state level. In the past few weeks, New Jersey lawmakers have introduced a multitude of health insurance reform bills, and New York lawmakers held a hearing on the feasibility of a single-payer system.

In March 2019, New Jersey Governor Phil Murphy sent a letter of intent to the Centers for Medicare and Medicaid Services, documenting New Jersey’s intention to establish a state-based health benefit exchange, to be operational by 2021.

Two months later, on May 13, New Jersey lawmakers introduced the New Jersey Health Insurance Marketplace Act (A5247, S551) to make good on that promise and establish a New Jersey health insurance marketplace. That same day, they also introduced a bill (A5248, S562) to require insurance plans to cover ACA-type essential health benefits.

Even more recently, New Jersey lawmakers have introduced a slew of additional health insurance reform bills that would further defend the state-based health care plans and marketplace:

• A5499, S3807: authorizes the New Jersey Department of Banking and Insurance (DOBI) to establish a state-based exchange for certain health insurance plans
• A5500, S3809: makes the federal ACA rate review requirements a part of New Jersey law and expands DOBI’s rate review process for individual and small employer health benefits plans
• A5501, S3802: requires continued insurance coverage until age 26 and provides further protection for covered individuals by listing additional criteria under which insurers may not deny coverage
• A5502, S3811: expands the definition of “small employer” under the New Jersey Small Employer Health Benefits Program to conform to the definitions under the federal ACA
• A5503, S3806: establishes an open enrollment period under the Individual Health Coverage Program
• A5504, S3812: applies an 85 percent loss ratio requirement to large group health insurance plans, starting on January 1, 2020
• A5505, S3810: revises rating factors for individual and small employer insurance plan premiums by, among other things, requiring rate differentials based on age to use classifications established in one-year increments, rather than five-year increments as provided in current law
• A5506, S3808: repeals statutes authorizing stripped-down “basic and essential” health insurance plans
• A5507, S3803: requires coverage for preventive services, including evidence-based items or services currently rated “A” or “B” by the U.S. Preventative Services Task Force; immunizations recommended by the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention; and preventive care and screenings for infants, children, adolescents and women, as provided for in the guidelines supported by the Health Resources and Services Administration
• A5508: revises law requiring coverage for contraceptives
• A5509, S3805: requires coverage for breastfeeding support
• A5510, S3813: expands the Law Against Discrimination to prohibit discrimination in health programs and activities.

With these bills, New Jersey is working to create a comprehensive scheme of laws and regulations that will govern a state-based health care program.

New York has also recently taken steps toward health insurance reform. On May 28, New York lawmakers held a hearing on the New York Health Act (A05248, S03577), which would create a single, publicly funded system for all New Yorkers, regardless of income. Proponents argue the Act will address holes in the current system by cutting costs, reducing coverage denials, and making co-pays more affordable. Opponents argue it will result in hospital closures because reimbursement for services could be set at below-cost Medicare and Medicaid rates. They also argue it will eliminate jobs within the private insurance industry.

Barak Bassman and Sara Richman are partners in Pepper Hamilton’s Health Sciences Department, a team of 110 attorneys who collaborate across disciplines to solve complex legal challenges confronting clients throughout the health sciences spectrum. Tracy Rhodes is an associate in the Health Sciences Department.