NJPP Monday Minute: 10/12/09

New report shows need for national health care reform

How is national health care reform critical to New Jersey's public health and economy? That's the topic of a new NJPP report that analyzes major provisions in "America's Affordable Health Choices Act of 2009"(H.R. 3200). The House of Representatives bill mandates health coverage for everyone - much like states do with car insurance - to prevent people from applying for health coverage only when they are ill.

Health care reform is particularly vital in New Jersey, where the number of uninsured increased to 1.28 million in 2007-2008, a 31 percent increase over the past eight years. Why so many? One reason is that employers are dropping coverage for employees faster than the national average. In addition, personal health care expenditures have been skyrocketing in New Jersey for some time, increasing by an annual average of about 6 percent between 1991 and 2004, more than twice the national inflation rate.

The Right Rx for NJ: National Health Care Reform details key findings, including:

• The bill would cause the number of uninsured New Jerseyans to decrease by an estimated 1 million primarily because of $34 billion over ten years in federal health subsidies to low and middle income households.
• Many of the 1.2 million seniors and people with disabilities on Medicare would receive better prescription drug coverage and most of New Jersey's 250,000 uninsured children would have insurance.
• The bill would likely reduce the cost of insurance for small employers which could save jobs, preserve wages and increase their competitiveness by making health insurance more affordable.

High medical costs are one of the main reasons why a public insurance option is so important to New Jersey. It would likely reduce cost increases by promoting more competition and choice, which is especially important in a state that already has one of the highest costs of living in the nation.

The report offers recommendations to ensure New Jersey residents directly benefit from a health care overhaul. Among them:

• Set an income limit at 400 percent of the federal poverty level ($88,200 eligibility for a family of four) for health insurance subsidies.
• Promote choice and competition through a public health insurance option.
• Guarantee Medicaid eligibility for childless adults and increase primary care provider rates with at least 90 percent federal matching funds.
• Improve Medicare by eliminating the "doughnut hole" in prescription drugs.

The report also notes the consensus in Congress on important elements of reform regarding the private insurance marketplace - measures that include prohibiting insurance companies from denying coverage to people with pre-existing conditions, terminating insurance if the policyholder becomes too sick and capping lifetime benefits.

Given the unrelenting increase in the number of people without insurance and the high cost of health coverage in New Jersey, health reform is a necessity- not an option. Without it, the state's public health and economy are threatened.