TRENTON — A bill that had been speeding through the Legislature before hitting a wall in the state Senate could result in higher insurance premiums for older workers and higher profits for New Jersey's most influential Democrat, according to several left-leaning groups who protested it today.
In a conference call this morning joined by Jersey City Mayor Steve Fulop, the groups claimed the bill – which went largely unnoticed when it passed the Assembly 77-0 last month – would seek to expand insurance arrangements that can be used by companies, and allow them to charge much higher rates for older workers than they’re currently allowed to.
The bipartisan bill (A3421) would give incentives for employers to band together to offer health insurance through self-funded or partially self-funded Multiple Employer Welfare Arrangements.
Under the bill, the self-insurance companies no longer be subject to limitations on what people generally deemed a higher insurance risk, such as senior citizens, women of child-bearing years, may be charged for coverage.
Currently, companies are allowed to charge more based on workers’ age and gender – but no more than twice as much as their cheapest plans.
The advocates said that would result in cheap plans to young, healthy, male workers, but prohibitively expensive ones for women, as well as older workers who are more likely to get sick.
“They would be able to charge unlimited premiums for older workers. They would also be able to charge more based on gender – something that the (federal Affordable Care Act) has eliminated,” said Maura Collinsgru, health policy advocate for New Jersey Citizen Action.
The bill would also benefit insurance brokers and third-party administrators, allowing them to manage the pools and front them money in exchange for profits.
According to The Record, the bill was pushed by Joseph Buckalew, a former Ocean County Republican chairman who is the business partner of Democratic power broker George Norcross. The two are the top executives at Conner Strong and Buckalew, an insurance brokerage firm that could benefit from the change in law.
“I think we all know that bills don’t typically move that fast, particularly when it’s not a budget bill or bills over overwhelming importance,” said Dudley Burdge, a staff representative for the Communications Workers of American Local 1032. “This seems like the kind of business that Conner Strong would be interested in.”
Daniel Fee, a spokesman for Conner Strong, defended the merits of the bill, though he did not say that Conner Strong supported it.
"The modernization of Multiple Employer Welfare Arrangements has broad-based support from Gov. Christie’s former insurance commissioner to businesses across the state. Conner Strong has always monitored and considered for support legislation that would improve options for consumers. And I think it’s important to point out that this is a voluntary program.”
“Joe (Buckelew) has a long, distinguished record and has always made himself available to answer questions. And that is what happened in this case," Fee added.
The bill’s sponsor, Assemblyman Ron Dancer (R-Ocean), said the bill “provides another option post-Affordable Care Act to have greater competition and choice. So I think that’s good for the consumer.”
Dancer also said there are protections written into the bill, such as requiring investors in the plans to wait at least two years before reaping any gains.
“We try to put safeguards in here but try to provide an incentive for the private sector,” Dancer said.
Fulop said the bill could exploit loopholes in the federal health care law, which is meant to make sure insurance is not denied to those with pre-existing conditions.
“Probably over the next several months and years as the (Affordable Care Act) takes its final form, you’re going to have a lot of special interests looking to undermine it,” he said. “It’s really important that our state Senators and Assembly people recognize that and recognize the nature of the significant change that’s happening.”
Advocates said they had expected the bill to be voted on today by the state Senate, but that it was taken off the agenda.
State Sen. Joseph Vitale (D-Middlesex), chairman of the Senate health committee, said he asked Senate leaders to hold off posting the bill for a vote last month because he maintains it lacks consumer protections that would keep rate increases in check.
"I don't object to creating additional competition," Vitale said. "I do object to creating an unlevel playing field and without the right consumer protections…Insurance is about sharing risk and sharing the burden together. This raises costs for older New Jerseyans.’ "
The proposed bill also would allow investors who form the insurance arrangement to share in the profits, but would not require they share in the losses, Vitale said. "The employer and employees are responsible for the debt. Not a bad deal, huh?"
Vitale said he was also troubled the bill deletes an explanation about the financial risks of embarking on this form of company-funded insurance coverage.
These funds will not pay your claims or protect your assets if a self-funded multiple employer welfare arrangement becomes insolvent and is unable to make payments as promised,” he said.