As health insurance costs continue to rise, the New Jersey Business & Industry Association (NJBIA) today called for reform of New Jersey's health insurance market to help alleviate one of the biggest problems for employers and employees alike—the exploding cost of health insurance.

“Both nationally, and in New Jersey, the cost to provide health insurance to employees and their families continues to rise at three and four times the rate of inflation,” said Christine Stearns, NJBIA's vice president for Health Affairs. “Unfortunately, this is nothing new. New Jersey employers have seen their health insurance rates increase dramatically every year for the last four years, and there is little to suggest that costs will not continue to increase at alarming rates.”

“We are approaching the point where some employers will be financially unable to continue to offer health insurance to their employees,” Stearns said. “This is potentially a huge problem. Fully 5 million New Jersey residents receive their health insurance from private sector employers, and hundreds of thousands more get insurance from government jobs and public assistance programs. These cost increases are affecting everyone.”

NJBIA has been pushing for comprehensive health insurance reform in New Jersey to help slow the rise in health insurance costs. Several of the key measures are:

• A-3359 (Cohen, Weinberg)/S-1454 (Sweeney), The Health Insurance Affordability and Accessibility Act—This bill would provide more flexibility in the design of health plans for individuals and employers with two to 50 employees by making several changes to the State-regulated Small Employer (SEH) and Individual (IHC) Health Insurance markets. The legislation also would institute a modified community rating for IHC plans allowing insurance companies to vary rates by up to 200 percent based only on age, gender and geography. This would allow insurers to offer lower priced plans to younger, relatively healthy people, thus attracting more insured individuals to the system. In addition, the bill also would increase choice and competition among consumers by requiring insurers to offer health plans in both the individual and small employer markets, not just one or the other. This bill passed the Assembly in June and awaits action in the Senate Commerce Committee.

• A-3440 (Cohen, Russo)/S-2435 (Kean)/S-2574 (Rice), Health Savings Accounts—Health Savings Accounts (HSAs) were created as part of recent federal legislation. They allow employers and individuals to contribute tax-free to savings accounts that are then used to pay for routine medical expenses. Federal regulations require those using HSAs to be covered by a high-deductible health insurance plan that covers expensive medical treatments, but New Jersey's high-deductible health plan does not meet federal requirements. A-3440 would change New Jersey law to permit the sale of qualified federal high-deductible insurance plans. This bill passed the Assembly in June and awaits action in the Senate Commerce Committee.

• A-747 (Cohen, Gordon)/S-2166 (Adler), Health Insurance Tax Credits—The cost of providing health insurance to employees is especially onerous for small businesses. This bill would provide employers with fewer than 25 employees tax credits equal to 25 percent of the cost of buying health insurance. A-747 was released by the Assembly Health Committee in May 2004 and awaits action in the Assembly Appropriations Committee.

• S-1559 (Bark)/A-2787 (Bodine, Chatzidakis), Electronic Medical Records—The business community can no longer afford or permit wasteful spending on care that does not benefit patients, expensive procedures that repeat previous tests, medical errors, or high administrative costs incurred by some of the nation's insurers and providers. This bill would create a 15-member task force on electronic medical records to identify the types of technologies that would be most effective at reducing duplication and errors at hospitals. The task force would also recommend incentives that would encourage hospitals to use this technology. The Senate Health Committee released the bill in May 2005. It awaits action in the full Senate.

• Health Insurance Mandates—The Legislature must also hold the line on healthcare mandates. Legislatively imposed healthcare mandates increase the cost of health insurance by requiring insurers to offer specific coverages whether or not consumers want them. The State's newly created Mandated Health Benefits Commission should be put to full use, providing lawmakers with objective information about the costs and benefits of mandates before they are put to a vote.