New Jersey Health Care Bill Extends Child, Low-Income Coverage, Allows Insurers to Vary Premiums by Age
New Jersey Gov. Jon Corzine (D) on Tuesday signed into law legislation that mandates health coverage for all state residents younger than age 19, expands coverage for low-income families and allows insurers to charge different premiums for individual coverage based on a person's age, the Bergen Record reports. Mandating children's health coverage is the first phase of a three-phase plan to achieve universal health coverage in the state (Washburn, Bergen Record, 7/8).
The law will expand NJ FamilyCare coverage to parents in families of four with annual incomes up to $42,400. The previous income threshold was $27,645 (Hester, AP/Long Island Newsday, 7/8). Under the law, insurers will be able to charge the oldest customers up to three-and-a-half times the rate of the youngest, which is expected to increase premiums for 33,000 residents. Increases for people older than age 55 will be capped at 15% per year for the first four years. The state insurance department predicts that for people younger than age 45, rates will drop by as much as 50% (Bergen Record, 7/8).
The fiscal year 2009 state budget includes $8 million to start the program (AP/Long Island Newsday, 7/8).
Brian Litten of Horizon Blue Cross Blue Shield said, "This will bring in a lot of younger, healthier people to create the cross-subsidies that insurance needs." Douglas Johnston of AARP, which opposed the measure, said, "We are not convinced by the assurances we keep hearing that bringing in new, younger, healthier lives into the risk pool will keep premiums down for everyone, including our members" (Bergen Record, 7/8).
