New Jersey has taken a major step toward establishing a health insurance exchange this week as the Health and Senior Services committee voted to approve a new bill that would make an exchange possible. The bill, A2171, aims to define what a health insurance exchange would be for the state. Each state is allowed to determine how it implements an exchange program and how it will be run. The legislation faced staunch opposition in its early days, but as the bill changed through a series of auxiliary provisions it gained support from lawmakers and consumer advocacy groups. The Assembly committee approved of the bill this week and the legislation will now make its way to the full Assembly.
The bill would establish a health insurance exchange as an active purchaser system. This would establish “minimum requirements for selection, certification, and recertification of qualified insurance plans.” This is markedly different from the conventional structure of exchanges as proposed by the federal government. Exchanges were originally designed to be a clearinghouse for plans where insurers would compete with one another for the business of consumers. The new model would ensure that consumers have access to high quality plans by keeping insurers from continuously undercutting one another in an attempt to win favor.
The state still has a long way to go before it can establish its planned exchange. Bill A2171 must survive the trial of legislation in order to make an exchange a reality. The Assembly is expected to weigh in on the matter in the coming months.
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