Murphy signs legislation to establish state-based health exchange

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Gov. Phil Murphy on Friday signed legislation to establish a State-Based Health Exchange in New Jersey. The law will allow New Jersey greater control over its health insurance market and the ability to establish stronger protections against the Trump Administration’s actions against the Affordable Care Act.

“New Jersey has advanced strong policies to protect access to health care for our residents, access which I believe is a human right. With this law, we take another step in securing the access families need to gaining more affordable health coverage. Creating our own exchange will allow us to take actions that protect residents in our state, and will ensure we are in the best position in New Jersey to defend against the Trump Administration’s assault on the Affordable Care Act,” said Murphy in a statement.

“I want to thank the many tireless advocates that helped get this legislation over the finish line. This bill makes it so that New Jersey can continue its work to ensure that all residents have access to the coverage and care they deserve,” Murphy said.

New Jersey currently uses the federal exchange, or Marketplace, which provides a platform for consumers to shop for and enroll in coverage. Transitioning to a State-Based Exchange (SBE) will give the state more control over the open enrollment period; access to data that can be used to better regulate the market, conduct targeted outreach and inform policy decisions; and allow user fees to fund exchange operations, consumer assistance, outreach and advertising. By redirecting the assessment on premiums, currently paid to the federal government to utilize a Federally Facilitated Exchange (FFE), New Jersey can operate an exchange that is tailored and efficient for New Jersey residents.

To fund operation of the SBE, the law will transfer the current federal exchange user fee, which is presently set at 3.5 percent of premiums, to a 3.5 percent SBE user fee – a rate that currently generates over $50 million a year. The transfer of the user fee to New Jersey will allow the state to dedicate funding toward outreach and enrollment efforts, which have been reduced at the federal level, as it transitions to an SBE for 2021.

“Establishing a State-Based Exchange is critical to improving access to coverage for New Jersey families. The federal government has cut the enrollment period, and slashed funding for outreach, advertising and navigators that provide critical assistance to residents in our communities,” said Department of Banking and Insurance Commissioner Marlene Caride. “Funding sent to Washington to utilize the federal exchange will be better utilized right here in New Jersey, where we can establish policies that create greater stability, access and improved protections for residents. This is a milestone for our state, and I am proud to be part of an administration that is taking on the issues that are so important to the lives of our residents,” Caride said.

Senate President Steve Sweeney, D-3rd District, said: “This is an important step forward that will put New Jersey in the forefront in addressing one of the top concerns of our residents: protecting and enhancing their access to affordable health care. I am glad that the governor came to recognize the importance of including Medicaid eligibility by accepting our revision creating an integrated exchange that automatically enrolls those who qualify for Medicaid.”

Sweeney added that this is a significant improvement that will allow people to get the coverage they qualify for and need, that makes the process more consumer-friendly by eliminating duplication and delays, and will generate federal funds to help offset operational costs.

“Our goal all along has been to ensure access to quality health care for everyone, especially those who are most in need and who struggle to afford health care,” said Sweeney.