The Trump administration has approved a New Jersey plan to help the state shore up its Obamacare market.
The plan is expected to reduce the prices of premiums for Obamacare customers by between 10 and 20 percent.
It was approved through a process in Obamacare that is commonly known as an “innovation waiver.” The specific waiver in New Jersey will set up a reinsurance fund that keeps premiums at bay by funneling government money toward the most costly medical claims.
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The program saves the federal government money that it otherwise would pay to subsidize premiums. New Jersey has requested $218 million in funding to support the program in 2019.
Democrats have argued that the Trump administration and Republicans have “sabotaged” Obamacare, leading to higher premiums, and urged states to implement plans that would help to stabilize the exchanges. Reinsurance has bipartisan support, and several other states have had similar plans approved.
New Jersey went further by setting up its own individual mandate, a provision that obligates its residents have health insurance or otherwise pay a fine. The fine is being zeroed out at the national level in 2019 as part of the GOP tax law.
Waivers are intended to give states some flexibility on Obamacare, but have specific guardrails preventing lawmakers from overhauling the law.
The changes states ask for cannot increase the federal deficit, and they cannot cause more people to become uninsured, increase the cost of coverage, or reduce benefits. They can be approved for up to five years, but must be renewed afterwards.
The waivers must follow a specific process that starts with lawmakers passing a bill that then receives feedback and hearings with the public. States assemble reports on spending, the anticipated outcome, and how the plan will be put into place. They then put the information together in an application that goes to the federal government, which holds another public comment period, before rejecting or signing off on the idea.
