INSURING NEW JERSEY’S UNINSURED
May 20, 2008
Individual health insurance policies in New Jersey are among the most costly in the United States due to over-regulation and expensive mandates. Two radically different bills have been proposed recently to reduce the number of uninsured in the state by making health coverage more affordable, say Devon Herrick, a senior fellow, and John O'Keefe, a research assistant with the National Center for Policy Analysis.
One proposal, called the New Jersey Health Care Reform Act, would force individuals to purchase insurance that many do not want or cannot afford:
- Low-income families would be enrolled in Medicaid, the State Children's Health Insurance Program (SCHIP) or given a subsidy to purchase coverage.
- Those with higher incomes would be required to purchase coverage from a private health insurer or enroll in a state-sponsored comprehensive, "commercial grade" insurance plan.
- The state plan would compete with commercial insurance and provide coverage similar to private group policies for small businesses.
The goal of this plan is to provide individual insurance policies for 75 percent less than private insurers currently charge. But there is little evidence this goal is within reach, and there are better ways to make insurance more affordable and cover the uninsured. For instance:
- A bill introduced by New Jersey Assemblyman Jay Webber, called the Healthcare Choice Act, would allow the state's residents to purchase lower-cost health insurance sold in other states.
- This would make coverage more affordable by injecting competition into the local market and by allowing residents to purchase insurance without New Jersey's expensive mandates.
- Consumers could shop for individual insurance on the Internet, over the telephone or through a local agent.
Under Webber's plan, consumers would be more likely to find a policy that fits their budget -- giving more people access to affordable insurance. Moreover, competition across state lines would encourage state lawmakers to reduce costly insurance regulations.
Source: Devon Herrick and John O'Keefe, "Insuring New Jersey's Uninsured," Brief Analysis #618, National Center for Policy Analysis, May 20, 2008.
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