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Federal Approval Extends New Jersey's Reinsurance Program to Lower Health Insurance Premiums
The New Jersey Department of Banking and Insurance Announces a Five-Year Extension to Continue a Program Reducing Individual Health Insurance Premiums by 15%
Morristown, NJ – In a move aimed at bolstering the affordability and stability of health insurance for New Jersey residents, the New Jersey Department of Banking and Insurance has announced federal approval to extend its reinsurance program. The program has successfully lowered health insurance premiums in the individual market by 15% and will now continue for an additional five years, from 2024 to 2028.
What Is the Reinsurance Program?
The reinsurance program, initially approved in 2018 for a period through 2023, reimburses insurance carriers for certain high-cost claims. This helps in reducing the risk for insurers and results in lower premiums for consumers. Funded by a mix of federal and state monies, the program does not use General Fund dollars. The state also taps into the Health Insurance Affordability Fund, funded through a repealed federal assessment on insurers that the state decided to continue.
How Does the Program Affect Rates?
"The reinsurance program has successfully contributed to increasing access to and affordability of health insurance in the individual market," said Acting Department of Banking and Insurance Commissioner Justin Zimmerman. "With the approval of the waiver extension, rates will continue to be lower than they otherwise would have been if New Jersey had not taken the step to establish this program."
For the year 2024, the program will cover 50% of claims between a $35,000 minimum threshold and a $270,000 maximum threshold.
Wider Impacts on Health Insurance in New Jersey
Governor Phil Murphy signed the New Jersey Health Insurance Premium Security Act into law in 2018, creating the reinsurance program. It’s one of several initiatives to improve health insurance coverage in the state. The state also runs Get Covered New Jersey, its official health insurance marketplace, and has extended state subsidies for individuals with household incomes up to 600% of the federal poverty level.
New Jersey is the only state to open its marketplace with additional state subsidies, ensuring greater affordability for its residents. As a result, nine out of 10 people enrolling in a health plan at Get Covered New Jersey now qualify for financial help, many of whom can find a plan for $10 a month or less.
What This Means for Morris County Residents
The extension of the reinsurance program is especially significant for Morris County residents who rely on individual health insurance plans. By reducing premiums and ensuring a more stable market, the program helps make quality, affordable healthcare more accessible for the local community.
