The Affordable Care Act is designed to expand access to health care and limit the number of uninsured. While parts of the plan have rolled out, some provisions have been delayed. New Jersey Policy Perspective Senior Policy Analyst Raymond Castro spoke with NJ Today Senior Correspondent Desirée Taylor about health care issues and what the reforms will mean for New Jersey residents and business owners.
Castro said the Affordable Care Act will provide subsidies to individuals, mainly the uninsured, which makes health insurance more affordable. “The average subsidy is like $5,000 so that’ll bring the cost down greatly. The subsidy will vary depending on income. So the lower the income, the more the subsidy,” he said.
Individuals making less than $15,000 will be eligible for Medicaid, which has no cost sharing, Castro explained. “Both in Medicaid and the premium tax credits that will be provided for people who have a higher income, that will defray most of the cost for insurance for most people,” he said.
While some parts of the Affordable Care Act have been delayed, Castro said the most important part of the reform is going to be the subsidies and that’s on schedule. “Those subsidies will not be available until January of next year but you’ll be able to apply for it early in October so most of the Affordable Care Act is on schedule I would say. And I’m very impressed with the planning so far. I think the state has been preparing for the Medicaid expansion because they will be administering that piece of the reform,” he said.
New Jersey will save a lot of money with the new system, according to Castro. “The way it works in our state is that historically we have provided medical care for many adults. And under the Affordable Care Act, the federal government is going to take over most of the cost for those adults. So in the governor’s budget for this year, they are estimating that we’re going to save over $200 million in the budget for that. That’s only for a six-month period,” he said. “So in subsequent years, the state is gonna save a half a billion dollars in state funds. So this is gonna be a huge benefit for taxpayers, not only people who are uninsured.”
Some are concerned with the changes will come higher insurance premiums, but Castro said premiums have been increasing at almost double digit rates historically and since the Affordable Care Act was enacted, he has seen a slight slowdown in the growth of premiums.
Castro says the effects of competition will be felt next year, but costs have been reduced because of rebates. “This year and last year, insurers were required to send rebates to their policy holders when they were spending too much on profit and administration. So in New Jersey, over 200,000 New Jerseyans have received $17 million in rebates in the last two years. So that is already bringing insurance costs down,” he explained.
Others have worried that the Affordable Care Act will cause employers to make full-time positions into part-time work to avoid having to provide health insurance. Castro said he’s heard that claim but the research hasn’t backed that up. “In this year we have found more employers who have fewer part-time workers. So we’re not seeing the shift. In fact we’re seeing it in the other direction, which was a surprise,” he said.
Castro said there are more full-time positions because most employers still want full-time employees because they’re more productive. He said that’s an economic fact that won’t change with health care reform.
The reform has become a politically divisive issue with some misinformation being talked about. Castro said he is most concerned about outreach with the Affordable Care Act. “Because New Jersey opted for a federal exchange rather than a state exchange, we don’t get funding for outreach in the exchange,” he said.
Castro explained that there have been some additional funds provided outside of the exchange by the federal government to the state.
“Community health centers also received some funding for outreach, but we have a long way to go,” Castro said.