THCB

What If We End Up with a Health Care System Like the One they Have In New Jersey?

What would individual health insurance cost if the court strikes the mandate down and still requires insurers to cover everyone?

With the Supreme Court justices sounding like they might strike the mandate down, this is a question I’ve been getting a lot lately.

I have pointed to New Jersey as a real life example of what can happen when insurance reforms take place but there is no incentive for consumers to buy it until the day they need it.

In 1992, New Jersey passed health insurance reform that required insurance carriers to either offer individual health insurance on a guaranteed issue basis or pay an assessment to carriers that did. Other elements of the legislation were:

  • Guaranteed coverage and renewability for all eligible people regardless of their health status. A pre-existing condition exclusion does allow insurers to limit coverage during the first 12 months (a limitation which is not contained in the Affordable Care Act).
  • Guaranteed renewal of policies, provided (1) the insured does not become eligible for coverage under a group plan; (2) premiums are paid in a timely fashion; and (3) no fraud is committed by the insured.
  • Community rating of the premiums, with variation allowed only for family status (single, adult plus child, husband and wife, and family). (The Affordable Care Act allows rate variations of up to three times from young to old.)
  • Standardized insurance plans, referred to as Plans A, B, C, and D (indemnity options) and a single HMO plan.

New Jersey does not have a individual mandate or any other means to encourage participation in the health insurance pool.

What does the health insurance market look like today in New Jersey?

First, there are relatively few insurance plans participating in the New Jersey insurance market. According to the New Jersey Department of Banking and Insurance, if you want to buy a two adult plan with a $2,500 deductible and 80% coinsurance for example, there are only three carriers offering it. Aetna at $4,913 per month, Celtic at $12,322 a month, and Horizon a $6,127.78 per month. These rates do not vary by age.

You can buy a $2,500 deductible, 80-20 coinsurance plan for a family. Only one health plan, Oxford, offers it and it is age rated. If you are age 25, it will cost $2,498.20 a month, at age 40 it will cost $2,978.75 per month, and at age 60 $4,054.97 per month.

The cheapest family plan I found on the state site is a Horizon plan with a $10,000 deductible that costs $1,434.72 a month–$17,217 a year. The cheapest HMO plan was a Horizon plan for $1,546.08 a month–$18,500 per year. Although, the state does also offer very limited and scheduled benefit plans that cost as little as about $600 per month.

You can see the complete chart of rates at the New Jersey state website by clicking on the icon: “See Monthly Rates for All Standard Plans.”

If anyone has Anthony Kennedy’s email address I’d appreciate your sending this over.

Robert Laszweski has been a fixture in Washington health policy circles for the better part of three decades. He currently serves as the president of Health Policy and Strategy Associates of Alexandria, Virginia. Before forming HPSA in 1992, Robert served as the COO, Group Markets, for the Liberty Mutual Insurance Company. You can read more of his thoughtful analysis of healthcare industry trends at The Health Policy and Marketplace Blog, where this post first appeared.

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Octavio GuastellasteveMD as HELLBobbyGlhf Recent comment authors
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Octavio Guastella
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“Tuve que actualizar los tiempos página para ver esta página, por alguna razón, sin embargo, la información que aquí era la pena la espera.”

Bob Hertz
Guest

As I understand the ACA, a family of four making $50,000 a year must spend about $3000 of their own money each year in order to receive a qualified health policy that by 2014 will cost about $15,000 a year. In some parts of the country, families like this are living right on the edge in terms of affording gas and mortgage. The $3000 they now have to spend is not cruel punishment, granted, but the money does have to come from somewhere. $250 a month of new spending is going to hurt. In some cases they will choose to… Read more »

bob hertz
Guest

I talk to quite a few liberals who are OK with losing the mandate. They sense that forcing people with comparatively little money to buy an expensive private policy could actually ruin the Democratic party — ironically, right at the very moment when in terms of non-white demographics the Democrats could be taking over. If you asked every American who will benefit from the ACA to step forward and vote for it, I do not think you would get a tidal wave of votes. This is not all due to propaganda by Fox News. Without a mandate, the answer is… Read more »

DeterminedMD
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DeterminedMD

again, good comment above. Touche on the end there, “better than spending vast amounts of money and resources to try and reform private insurance.”

With the way Obama and his ilk are trying to take over businesses, ie see GM and Chrysler as exhibit A, maybe this was the end around to get insurance industry folks under the government thumb.

But, you don’t read that assessment from most of the posters at this site, do you?

John Ballard
Guest

Generally I agree with what you said. But I have two inputs to consider… ►Regarding forcing people with comparatively little money to buy an expensive private policy that is misleading. It’s true that most of those with comparatively little money may be the target population, but the impact is eased two ways. First, those at 400% of FPL (federal poverty level) and below will be subsidized by the feds. They will not have to sink to the Medicaid eligibility level. Second, the “expensive” part of what they purchase may very well be less than the high-priced policies now available to… Read more »

DeterminedMD
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DeterminedMD

Gee, like this issue is keeping us calm and collective. Hey, at least passion shows we care.

DeterminedMD
Guest
DeterminedMD

Quite the threads following this week’s legal forays. It’s like watching the condemned prisoner being lead to the gallows, the rope is now around his neck, and everyone is watching both the guy holding the lever as well as the phone for the governor’s call for stay of execution. But, we have to wait until June! And that is assuming these 9 people are not all lining at the 20 yard line ready to use 9 feet to punt the ball out of the stadium! And you thought waiting to learn who shot JR was a bitch about 30 years… Read more »

BobbyG
Guest

6-3 to uphold.

DeterminedMD
Guest
DeterminedMD

what are the Vegas odds today?

John Ballard
Guest

Touché.
You don’t miss a trick, do you?

In my defense, that was in a forum of other Liberals hosted by Deborah White, an old cyber-friend from many years past. In that context my use of that bumper sticker cutie was well understood and stepped on no one’s toes. In this place I strive to be less partisan, but it’s not easy for a Yellow Dog Democrat.

Sorry for the offense. I will strive to be more careful.

Nate Ogden
Guest
Nate Ogden

I enjoy the back and forth, being challenged is the only way to improve.

Have a great rest of the weekend, I’m sure we’ll pick this up again soon:)

John Ballard
Guest

Don’t be so hard on yourself, Dr. D. Your concerns are both valid and ongoing. I wish I could propose a good solution, but I have figured out in my lifetime that looking to Congress or The Law to provide a remedy is only a few paces away from playing Mega-Millions, hoping for the prince to arrive or asking Santa for a mate to go with last year’s pony. I just had the following exchange for someone in a Facebook comments thread…. [S*** said] What we need is for preexisting conditions be covered,and women and men have the same coverage… Read more »

DeterminedMD
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DeterminedMD

Agreed.

Nate Ogden
Guest
Nate Ogden

I thought EMTALA can from Rep Rostenkowski, Dan, a Democrat. It was the house that introduced both EMTALA and Continuation of Coverage, both of which have been disasters

John Ballard
Guest

Nate, I’m not going to look it up. I’m sure you are correct. As I said, the reconciliation process may be bicameral but that does not assure it will be bipartisan. The final bill (COBRA) was not vetoed but signed into law by President Reagan, patron saint of the modern GOP. As such both political parties participated in its creation, including all its various unintended consequences. As I said, trying to be as neutral as possible, we have short memories, all of us, and are prone to conflate BICAMERAL with BIPARTISAN. ~~~~~~~~~~~~~~~~~~~~~~~ That said, Nate, by now I think readers… Read more »

Nate Ogden
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Nate Ogden

I do frequently hear that I should be less politicial or I am to partisan. But I am only like that in responce. “mainly Republican piece of sausage” Could we not have avoided this if you had left this comment out? People on the left make these off handed comments, second nature it seams, then get mad when I correct them. I would be happy to have civil detailed discussions if those on the left would stop slapping me. Sorry I am not one to turn the other cheek in these situtions. Stop bashing republicans for no reason and I… Read more »

DeterminedMD
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DeterminedMD

Bob Hertz raises a good point, what is voluntary and what is inherent for society to pick up. As the designated “Social Darwinist” at this thread by another commenter, here is an example that will instinctively raise eyebrows as much as pause, because does society have to pay for this: A 7 year old, J.L., is blind, suffers from cerebral palsy, chronic lung disease, and a form of diabetes. Per the article about him, his care was covered by Medicaid for the early part of his life, but when his father’s income rose above the rate Medicaid sets for all,… Read more »

BobbyG
Guest

It’s nice to see you arguing in detail and depth in lieu of the angry bumper sticker stuff. Keep it up. It’s substantive.

bob hertz
Guest

Back about 15 years ago when I started studying health care costs in earnest, I sat up all night thinking about the following question: What part of health carer is voluntary, like buying furniture, and what part of health care is somethat that happens to you, like a fire? I decided that most of the expensive items in health care are like a fire, in which you might have some responsibility, but not enough responsibility so that society should make you pay for all of it. That is why I detest medical debt. By debt I do not mean owing… Read more »

bob hertz
Guest

Apologies, I hit the send button before I finished the prior post. I was going to say that I turn into Karl Marx on the subject of medical debt. Which reminds me, does anyone else notice the wild generational inequality on the subject of Medicare Advantage? We spend $20 to $30 billion a year to remove much of the curse of medical debt from senior citizens, and I am fine with that. But under age 65, even our mandates will force younger people to buy private insurance that by design covers just 60 or 70 per cent of ther medical… Read more »

Nate Ogden
Guest
Nate Ogden

But under age 65, even our mandates will force younger people to buy private insurance that by design covers just 60 or 70 per cent of ther medical costs. Insured patients only pay 13% of healthcare cost out of pocket, down from 50% in 1965. This study says its even lower http://www.american.com/archive/2010/january/the-high-cost-of-no-price What is really perverse is what Medicare covers vs what it was suppose to cover. Where I think you went wrong was to look at first dollar plan design, once a member pays a few thousand out of pocket insurance pays 100%. $5000 of a million dollar claim… Read more »

Peter1
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Peter1

“innocent is an interesting choice of words, they incurred bills then didn’t pay them, what could be further from innocent?” They required needed medical care and were forced to use a rigged system. “But under age 65, even our mandates will force younger people to buy private insurance that by design covers just 60 or 70 per cent of ther medical costs.” Would the other 30% to 40% be incurred medical debt? Aren’t those the plans you tout as being “the insurance they want” at a price they can afford? Medical costs are not just the premiums, it’s also the… Read more »

bob hertz
Guest

Selling old medical debt can have a huge human cost. Patients are stunned to be sent old bills, and their credit rating can be savaged if they cannot pay them. The gain to society from paying 7-year old bills is very minimal. The damage to relatively innocent (and often rather poor) former patient is large. A federal government which gave AIG about $180 billion in a month can certainly pay off old medical bills for perhaps $15 billion, and it could be done tomorrow morning. Medicare could pay off these old bills, and it would be a rounding error in… Read more »

Nate Ogden
Guest
Nate Ogden

innocent is an interesting choice of words, they incurred bills then didn’t pay them, what could be further from innocent? The provider that treated them expecting payment is innocent. Other patients that pay higher bills to make up for it are innicent.

If we start paying off people’s bad debt why would anyone pay their bill? They could just wait for the government to pay it off for them.

Peter1
Guest
Peter1

“They did just increase their retirement age.”

No Nate they didn’t, it’s proposed in the budget, not law yet and open for change, especially when voters get wind of it.

http://www.theglobeandmail.com/report-on-business/economy/economy-lab/the-economists/does-harper-really-need-to-raise-the-retirement-age/article2316982/

Peter1
Guest
Peter1
bob hertz
Guest

There was a piece in Health Affairs, I think by John Holohan, which showed that hospitals do eventually recover some portion of what it costs them to treat the uninsured. There is a special supplement in Medicare called DSH I believe, but the money has to travel through an intricate formula where we pay a little more for seniors when the seniors use a hospital that also treats younger uninsureds. It is not honest or direct. EMTALA was yet another unfunded mandate. If a Congressional majority wants something to happen, then that majority should have the courage to raise taxes.… Read more »

Nate Ogden
Guest
Nate Ogden

As a start uninsured people with out standing medical bills should have their tax refunds confiscated. Either sign up for free Medicaid if your eligible or get insurance or the rest of the tax payors aren’t going to get stuck with your bills.

It would be very easy for hospitals to turn over uncollected debt to the IRS to withhold like they do other liabilities. Would end some of the free riding.

John Ballard
Guest

Some time ago, speaking with someone in the accounting/ claims recovery department where I worked, I learned that after a week or two they routinely tossed uncollected claims into a pile to be “written off” for accounting purposes as noncollectable. This may or may not be accurate, but it fits perfectly with the idea that today’s so-called not-for-profit model has a laundry list of ways to claim all kinds of “community benefits” by citing crap like that. I know individual clinics and practices aren’t prone to doing that because I have once or twice received bills for services nearly a… Read more »

Nate Ogden
Guest
Nate Ogden

“tossed uncollected claims into a pile to be “written off” for accounting purposes as noncollectable.” It has changed slightly, and there are others that can speak to the exact numbers much better then I, but after a few months they consider it bad debt but they don’t toss it they sell it for pennies on the dollar. The market for this is actually sort of fascinating if your into that sort of thing. Bad debt purchased directly from a doctors office might go for $0.30 cents on the dollar. They will try to collect then what they can’t they sell… Read more »

John Ballard
Guest

That makes sense. Poor people who finally make it into Medicare after a lifetime of little or no medical attention must think they have gone to Heaven. I hadn’t thought of that. I can see where even the most parsimonious managed care would be an improvement. Hmm… I suppose Medicare Advantage is not irredeemably negative. No wonder the industry keeps peddling it even with subsidies being pinched off by ACA. I read somewhere that over a third of Medicare beneficiaries are already going with MA, likely because they are getting in with little or no premium. My wife and I… Read more »

steve
Guest
steve

In our group, most uninsured earn so little it is not worth chasing them. A bigger problem, in some ways, are those who are supposedly insured but really are not. We put people into collections at 6 months. I expect to collect about 2%-5% of that money.

Steve

John Ballard
Guest

Thanks for your comment. I presume “our group” indicates you are connected with some provider, perhaps in some administrative capacity.
I’m curious if you have any opinion regarding Medicare Advantage versus original Medicare. Reimbursement rates, response times, co-pays, limits, whatever…
And what does it mean to be “supposedly insured”?
Does that mean counterfeit or out of date insurance cards, poor or no phone verification, fake ID or what?

Your 2%-5% range for collectibles sounds right to me.
Does that reflect what you actually collect in house or what can be brought in by peddling bad bills to collection agencies?

Nate Ogden
Guest
Nate Ogden

Have you seen the healthplans that pay 100% of the contracted fee then the plan collects the employees out of pocket cost? It works for the plans if they can get deeper discounts. I assume it would work for the providers.

Hard to get the provider panel in place to start, would work best in a community healthplan but you don’t see many of those any more.

steve
Guest
steve

I have been president of an anesthesia group for many years. I was also self-incorporated for about 5 years. In general, Medicare has been our fastest, most reliable payer. The private insurers were pretty bad until the clean claims law was passed. For the last 10 years, they have been better. We see little difference in collection rates between Medicare and MA, though MA pays better. Some people have out of date insurance. A few have fake insurance info. Some people lose their jobs. Some people are out of network, and d not realize it until we send bills. Accounts… Read more »

Nate Ogden
Guest
Nate Ogden

Do you receive payment electronically from Medicare and private insurers, just Medicare or neither?

We have been trying to push electronic payment, saves 5-7 days mailing, and can’t get any signup.

steve
Guest
steve

Almost all of our billing is electronic now. Same with our payments. We use a lockbox. Some smaller insurers still send checks.

Steve

Nate Ogden
Guest
Nate Ogden

“For another $30 billion or so, you could fund EMTALA, i.e. actually pay hospitals at the time of care when they stabilize the uninsured.” This would be a HUGE first step. When groups ask how they fix their insurance plan the first thing I always tell them is you have to have the data. If you don’t know what is going on yiour just guessing at solutions. Hospitals claims they provide $x of charity care. They have to charge private insurance more to cover it etc. But if you look at most of the hospitals in the country if employers… Read more »

Paolo
Guest
Paolo

I agree (it’s nice to agree sometimes). If there is a law that forces hospitals to give treatment, there should be a law that funds that treatment and provides some data and accountability.

Before 2006, MA actually used to pay hospitals for the treatment of the uninsured. But then came Mitt Romney and argued that instead of paying hospitals to treat the uninsured, it would be better to divert that money to finance everyone’s insurance.

Nate Ogden
Guest
Nate Ogden

“If there is a law that forces hospitals to give treatment, there should be a law that funds that treatment”

I would make that a constitutional amendment, not only specific to healthcare but anything.

bob hertz
Guest

The subsidies envisioned under the ACA were projected to cost at least $90 billion a year, and that is just in 2014. The subsidies were going to increase by some inflation factor, and will probably increase far more because of corporate dumping of employees. (Douglas Holtz-Eakins has some powerful writing on this.) Just noodling with the numbers…………….. for less than half of $90 billion, you could have a very respectable network of public urgent care clinics, public dental clinics, and mental health clinics. Whether they were free, or charged very low subsidized rates, is important but could be worked out… Read more »