Using NJ state and federal subsidies, the Affordable Care Act (ACA) helps eligible individuals and families afford health insurance. The American Rescue Plan Act has increased the amount of financial help available, with no one paying more than 8.5% of their income for health insurance when not offered affordable group health insurance through work. New Jersey has its own subsidy program, the New Jersey Health Insurance Premium Tax Credit (NJHPTC), funded by state taxes, fees, and assessments on health insurance companies and hospitals, as well as the state's general fund. However, NJ added subsidy may cause small employers to stop offering group health plans.
To be eligible for NJHPTC, individuals, and families must meet certain income requirements, and the amount of subsidy varies based on the number of insured individuals. For example, an individual making 150% of the Federal Poverty Level
will receive combined subsidies, making many health plans have zero premiums. Adults making less than 401% of the FPL get an extra $100 a month, and incomes between 401% to 600% of the FPL will get $50 a month.
Children dependents under age 19 default to the Children's Health Insurance Program at zero cost if the household earns less than 355% of the FPL. The adults receive the NJHPTC as indicated above. If the child is over 18, they are treated as an adult, getting up to an additional $100 credit per child under 400% of the FPL and $50 from 401% up to 600% of the FPL.
The CHIP insures over one million children in NJ, and growing the pool is a priority to move to a one-payer system. To avoid a child's eligibility for CHIP, the family must report an income over 355% of the FPL, or they can refuse the free coverage and enroll their children in a non-subsidized plan through the same insurance companies offered to adults. The Child Health Insurance Program
offers comprehensive coverage, including dental and vision.
When a state takes funds from the health industry and hospitals to fund the subsidy, insurance companies and hospitals will pass the cost on to all users, increasing the overall cost. Eventually, as small group premiums increase, many employers will stop offering group coverage and direct employees to purchase subsidized individual plans. The Family Glitch Fix will further enlighten employers about how little individuals pay for health insurance. The fix allows dependents of employees covered by group health plans to enroll in subsidized individual health plans if the household cost is determined unaffordable. Groups under 50 employees do not have a penalty for not offering health insurance, so when the cost can be sliced in half, an employer's premium contributions may be better allocated to other benefits or an increase in pay.
The subsidy programs aim to balance the cost burden across different groups, with the hope that increased access to healthcare will ultimately lead to better health outcomes and lower overall healthcare costs in the long run. With over forty years of experience, I feel usage will increase, moral hazard will not lead to better healthcare outcomes, and participants will demand the entitlement to be maintained while others pay the cost.