The Trump administration Thursday approved a request from New Jersey to protect an important aspect of Obamacare.
New Jersey was given the OK to create a fund that would help pay the medical bills of catastrophically sick people who buy health insurance through Obamacare, state Banking and Insurance Commissioner Marlene Caride said.
Without the reinsurance fund, premiums would have risen about 15 percent, Caride said.
“The Murphy administration has made it a priority to pursue policies that protect the health of New Jersey families by improving access to affordable quality health coverage,” said Caride.
“The reinsurance program is an innovative way to increase stability in the insurance market and reduce costs to consumers. Ultimately, this is about creating greater access for residents in the state to the coverage and care they deserve.”
Gov. Phil Murphy signed a bill in May creating the New Jersey Health Insurance Premium Security Fund, but the state needed permission from the U.S. Centers for Medicare and Medicaid to move forward with it.
That came through Thursday. Permission for the program is granted through 2023, according to the letter.
The state law creating the fund is the second half of a two-prong strategy to protect the health exchange created under the Affordable Care Act.
In May, Murphy signed a law creating a state-imposed mandate. He also signed the reinsurance fund, which will rely on the fees people pay at tax time if they choose not to buy an insurance policy. President Donald Trump ended the mandate for people to buy insurance, effective 2019.
he state is also counting on $218 million in federal funds to support the program, Caride’s announcement said. A final decision by the federal government on this funding is expected in October.
In 2015, 189,000 New Jerseyans collectively paid $93 million, or roughly $500 in fees, rather than comply with the individual mandate, according to IRS data collected by the research institute, New Jersey Policy Perspective.
Sen. Joseph Vitale, D-Middlesex, one of the prime sponsors of both laws, said this was great news for the roughly 300,000 people who have insurance coverage under the law.
“In spite of the President’s attempt to destroy access to health care, New Jersey now leads the nation in preserving the ACA while reducing premiums,” Vitale said.
N.J. Rep. Bill Pascrell, praised the federal government’s actions, as well.
“This move will mitigate Republicans’ destructive actions and save New Jerseyans good money,” said Pascrell, D-9th Dist.