Would ‘Public Option’ Help Stabilize NJ’s Health Insurance Marketplace?

Source: NJ Spotlight

nanjDemocratic lawmakers in Washington, D.C. — including Sen. Robert Menendez — joined labor leaders and other progressive organizations to launch a new push for the so-called public option, an idea debated at length as federal officials crafted the 2010 Affordable Care Act. Both Democratic presidential contender Hillary Clinton and President Barack Obama have endorsed the idea. Earlier this year, Assemblyman Reed Gusciora went one step further, calling for a statewide single-payer system.

Earlier this week, the state Department of Banking and Insurance declared Health Republic Insurance insolvent, forcing the 35,000 policyholders to search for a new plan when the marketplace enrollment period begins in November. That choice is made tougher by the fact that Oscar Insurance Corp., which covers more than 24,000, announced in August it would also stop selling policies in New Jersey next year. Oxford Health Plans, which insures fewer than 12,000 people, made the same decision in May.

As of now, two private companies will remain active on the marketplace in 2017: Horizon Blue Cross Blue Shield, which now covers more than 149,000 people through these plans, and AmeriHealth Inc., which insures some 56,000 this way. (Both providers also cover customers who do not purchase plans through the marketplace.)
Given the success of Medicaid and its expansion — and ongoing problems with the marketplace — advocates for the public option said greater government involvement is needed to protect healthcare consumers.

“If our current public health insurance programs (Medicare/Medicaid) are any indicator, a public plan that brings lower administrative costs, no expectation of profit and the increased bargaining power of a government agency would be a good, cost effective alternative for consumers and bring greater stability to the Marketplace,” noted Maura Collingsgru, healthcare program director for New Jersey Citizen Action.

“While the public option isn’t a panacea for all that needs to be remedied, recent pullouts of insurers across the country demonstrate that a system built solely on private insurers in not the perfect solution either,” she adds.

According to the civil action the state filed with Mercer County Superior court, Health Republic — launched in 2014 with more than $100 million in public capital — had lost nearly $59,000 so far this year and further business would be “hazardous fiscally to its policy holders, creditors and the public.” In the filing, the state seeks permission to oversee the company’s business as it winds down operations and helps customers find new coverage for 2017.

In addition to creating competition, a public option could save significant taxpayer dollars, supporters said. According to a Congressional Budget Office analysis, a public option could cut government healthcare costs by $158 billion over 10 years and would extend coverage to most of the 29 million Americans who remain uninsured.

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