New Jersey Action Center

Establish a Health Insurance Exchange

The American Cancer Society estimates that 49,080 new cases of cancer will be diagnosed in New Jersey in 2011. During this year, it estimates that 16,370 New Jersey residents will succumb to cancer,  making the second leading cause of death in the state.   Research suggests that approximately 10 percent of cancer patient are uninsured at the time of diagnosis.   More troubling, about one-third of cancer survivors report a loss of health insurance at some point in time since their diagnosis.  

Uninsured patients are less likely to get recommended cancer screenings and are more likely to be diagnosed with cancer at later stages.   For example, uninsured women diagnosed with breast cancer are 2.5 times more likely to have a late stage diagnosis than women enrolled in private health insurance.

Based on its successes in Massachusetts, the American Cancer Society supports creation of a Health Insurance Exchange since it will help ensure that cancer patients have unrestricted access to high quality, affordable and adequate insurance coverage that is simple to navigate and easy to understand.  Achieving these goals depend on ensuring a “level playing field” for individuals, small groups and insurers operating both inside and outside of the Exchange.  In other words, the state must do everything it can to avoid adverse selection so that cancer patients, and others with serious and chronic illnesses, are not disadvantaged in trying to obtain affordable coverage.  Getting the Exchange right matters for people with cancer and for people with the potential to get cancer, which is everyone.

1.    The Exchange governance board must properly structured to ensure that its decisions serve the best interest of consumers, patients, workers, and small employers.  The governance board will make the critical management and policy decisions that determine the direction and success of the exchange. It is important that the members have appropriate management to successfully make the many critical administrative decisions that must be made by 2014. It is imperative that board members not have a conflict with their business or professional interests. Other stakeholders, including patients and consumers, are best involved through advisory boards. Finally, the governance board must be held publicly accountable through open meeting laws and solicitation of public comments.

2.    The rules for the insurance market outside the exchange must complement those inside the exchange to mitigate “adverse selection.”  It is essential that the insurance rules are comparable for plans inside and outside the exchanges, thus promoting a level playing field. If plans outside the exchanges can sell products under more favorable terms, those plans can cherry pick the healthiest consumers, with the exchanges ultimately becoming an insurance pool of primarily high-risk individuals. This would result in high and potentially unaffordable insurance premiums for those consumers who need care the most.

3.    Medicaid and other public insurance programs must be well integrated with the exchange.  Under federal law, all individuals with incomes under 133 percent of the federal poverty level are eligible for coverage under Medicaid. The exchanges are responsible for screening and enrolling eligible people in the program. It will be critical that the exchange is well integrated with Medicaid to ensure seamless enrollment. Further, because many individuals will move between Medicaid and the exchange over time due to fluctuation in income, it is crucial that exchange rules allow for coordination of plans, benefits, and physician networks to ensure continuous coverage. See report, Medicaid's Impact on New Jersey: Helping People with Serious Health Care Needs.

4.    The Exchange must be structured to emphasize administrative simplicity for consumers.  Consumers must be able to easily access not only information such as premium rates and enrollment forms, but also critical additional information, such as each plan’s benefits, provider networks, appeals processes and consumer satisfaction measures. This information should be available in multiple languages and literacy levels.

5.    Ultimately, the Exchange has a continuous and stable source of funding.  To facilitate good management and planning, it is important that the exchanges have a predictable and steady source of funding. Otherwise, there is a risk that funding will become vulnerable to the often unpredictable legislative appropriations process. Further, funding sources should be generated from plans inside and outside the exchange, so carriers outside the exchange are not afforded an unfair financial advantage that could lead to adverse selection.

6.    Legislation must include a clear process and timeline for resolving the complex policy decisions that the Exchange governance board must make in cooperation with the Legislature and the Governor.  In particular, the American Cancer Society is concerned with how cancer-specific insurance mandates are addressed in the context of the essential benefits package.  This, as well as many other important decisions, deserves to be carefully reviewed and acted upon before the end of 2012.

7.    The Exchange must be affordable to consumers.  Obviously, keeping costs low, while mandating that the plans offer high quality coverage is critically important.  Starting in 2014, virtually all New Jersey residents must be covered by health insurance – by their employer, the government, or purchased through the Exchange.  As mentioned earlier, the bigger the insurance pool, the greater the spreading of risks – and costs.  Thus, the Exchange must be empowered to actively negotiate with insurers to get the highest quality care with the lowest possible price, and offered in a manner that allows consumers to easily compare insurance products.