Category Archives: As a Matter of Fact

As A Matter Of Fact…1 in 6 New Jerseyans hit By Governor’s vetoes


From July 11th, 2011 | Published in NJPP Blog: As a Matter of Fact …

By Raymond J. Castro, Senior Policy Analyst

One in six New Jerseyans will be adversely affected by line-item vetoes of two critical programs in the budget Governor Christie signed last week.

Today, the state Senate is expected to vote on restoring funding for those programs – the state Earned Income Tax Credit and NJ Family Care. Doing so, however, will require bipartisan support in order to achieve two-thirds majority.

The governor’s vetoes represented unprecedented cutbacks in state services and will affect more than 1.5 million residents, mostly low-income working families with children. Without these supports many parents will be unable to continue to work in low and moderate wage jobs that support their children in a state with one of the highest costs of living in the nation.

Last week the Legislature passed a state budget that fully funded these program. However the governor in New Jersey has considerably more power than governors in many states and has the discretion to delete any funds proposed for specific programs – or any “line item” in the budget. The only way that those funds can be restored is for the Legislature to vote to overturn each veto with a two-thirds vote.

When voting on each line-item, it will be important that legislators know what the impact is on people in their districts. New Jersey Policy Perspective has created an analysis to show the number of people, county by county, who will be affected by these two line item vetos, which were among dozens of vetoes by the governor.

Budgets reflect a state’s priorities. The public does not always know where individual legislators stand on those priorities because the budget is usually voted on in its entirety. That will all change today, and we hope that each lawmaker, regardless of party, recognizes just how devastating these cuts can be to wide numbers of New Jerseyans.

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Filed under As a Matter of Fact, budget cuts, children, Earned Income Tax Credit, Gov. Chris Christie, line item veto, low income families, New Jersey Policy Perspective, NJ FamilyCare, working poor

As A Matter Of Fact…Budget vetoes: The scorpion and the frog

July 6th, 2011 | Published in NJPP Blog: As a Matter of Fact …

By Mary E. Forsberg, Research Director

A scorpion and a frog meet on the bank of a stream and the scorpion asks the frog to carry him across on its back. The frog asks, “How do I know you won’t sting me?” The scorpion says, “Because if I do, I will die too.”

The frog is satisfied, and they set out, but in midstream, the scorpion stings the frog. The frog feels the onset of paralysis and starts to sink, knowing they both will drown, but has just enough time to gasp “Why?”

Replies the scorpion: “It’s my nature…”

This parable has many variations: the scorpion and turtle; the snake and dog; the viper and farmer. What each variation has in common is a bad actor, a character who can’t play fair, even if it means he might perish.

Those who are reading the press these days may recognize certain similarities with the current state of politics in New Jersey. And the Democratic leadership surely is croaking now.

It wasn’t a surprise that the governor wielded his ax against the Millionaires’ tax and women’s health programs. He did it before. He said he would do it again and he did it.

What was surprising, though, were the other cuts that had nothing to do with policy and everything to do with the very nature of his leadership. The cuts are unprecedented and go beyond any reasonable policy and fiscal considerations.

The Legislature

The budgets of the Executive office, the Legislature and the Judiciary have always been sacrosanct; a “gentleman’s agreement” has traditionally given each responsibility for its own budget and spending.

No governor before has chopped 41 percent from the Legislature’s staff salary accounts, but that’s exactly what the governor did. And he did it with a dose of venom, saying:

“The budget as adopted by the Legislature relied upon exaggerated revenue estimates, flawed assumptions concerning fund balances and ignored the harsh reality of its spending decisions. This reduction, among many others enumerated herein necessitated reductions of known surpluses, imprudent spending and other excesses.”

People who have noticed this salary cut haven’t made much of it. But the fact is, it has the potential to shift the balance of power in the legislative branch. Here’s how that works.

The salary accounts that the governor cut will not affect the salaries of legislators or those of their district office staff. The ones cut supported the Democratic and Republican legislative committee aides and the people who run the partisan staff offices in Trenton. Money for those salaries is appropriated to the Senate and Assembly in a lump sum and is divided based on which party is in the majority – the majority party (currently the Democrats) gets more of the money, has a bigger staff and has the larger suite of offices.

Unless the Legislature overrides this veto with a 2/3 vote (which would require the support of both parties), the staff of those offices will be significantly reduced. How these cuts are shared will be up to the majority Democrats in the Senate and Assembly. And as Assembly Speaker Oliver, a Democrat, was quoted as saying, “I’m certainly not going to shoot myself in the foot.”

Whether the governor understands this or not, a greatly reduced Republican partisan staff in Trenton is certainly a possible outcome of this line item veto.

Higher Education

Students and institutions of higher education felt the sting of the governor’s veto, which cut full-time and part-time Tuition Aid Grants (TAG) below even his own budget recommendation in March. He reduced the Democrats’ appropriation by $48.5 million, even though the amount in the Democrat’s budget was only $21.3 million more than his budget recommended.

In another unusual veto, the governor reduced the number of state-funded positions at each college by nearly 1,200 positions overall. This veto is an easy one to overlook and understanding it isn’t straightforward. What it means, however, is that the governor is reducing the state’s obligation to pay fringe benefits costs for these positions and is transferring those costs to the colleges – all without prior consultation and at the last minute. It is a backhanded way of again reducing the state’s responsibility for its higher education system. For Rutgers University and the Agricultural Experiment Station, this represents a 6 percent loss; for the other colleges, a 5 percent loss.

The veto message was again venomous. He blames the Legislature for this cost shift, saying:

“The Legislature’s failure to appropriately fund health benefit costs for all state employees necessitated a reduction in the state’s support of employee fringe benefits at all public institutions of higher education.”

Legal Services to the Poor

If you are poor in New Jersey and have a legal problem, save it until next year – maybe. Like the TAG scholarship, legal services will be significantly less than even what the governor proposed in his March budget.

His veto eliminated all state funding ($600,000) for the legal clinics at Seton Hall University Law School, Rutgers Newark Law School and Rutgers Camden Law School. In March he budgeted each of them for $200,000 apiece.

He also apparently took umbrage at the additional $5 million included by the Democrats in their budget for Legal Services of New Jersey, which provides legal services to poor people in civil matters. He cut that budget by $10 million – leaving Legal Services of New Jersey with a smaller budget than he recommended in March.

Cleaning up New Jersey

The Governor’s veto cut $18.8 million or 16 percent of the amount he recommended in March for Department of Environmental Protection programs that safeguard and preserve the state’s environment – for remediation of hazardous waste, underground storage tanks, monitoring water, and dealing with diesel pollution. Funding for these programs comes from a 4 percent constitutional dedication of corporate business tax (CBT) revenues. The effort by the governor and some in the Legislature to ensure that New Jersey is “open for business” by doing away with regulations and reducing corporate taxes means less money is available to protect New Jersey’s environment.

The moral of the budget

No one expected the governor to move away from his ideological position on funding health care for women or to abdicate his protection of the wealthiest in the state from the Millionaire’s tax, which would have added an additional 1.78 percent to their income tax bills this year.

But the veto message this year went beyond negotiation and fair play. There are consequences to every action. The scorpion’s sting meant death to both the scorpion and the frog. The consequences of this veto message are a less prosperous state and an increase in the chasm that separates the state’s wealthy from everyone else.

For a complete list of the governor’s line item vetoes, see the chart


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Filed under As a Matter of Fact, blog, Democrats, Gov. Chris Christie, line item veto, Millionaire'sTax, New Jersey Policy Perspective, NJ State Budget, veto override, women's health issues, working poor

>AS A Matter Of Fact…Democrats make a statement with budget plan of their own

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June 27th, 2011 | Published in NJPP Blog: As a Matter of Fact …

Democrats have done an unexpected thing. With just days to go before a budget must be enacted, they have introduced their own budget – a “this is what we stand for” budget – with a companion millionaires’ tax to restore at least some of the Christie administration’s proposed program cuts.

That they did this shouldn’t be a surprise.

It’s common practice for the party that controls the Legislature to draft and sponsor the state budget. The Democrats control both houses just as they did last year.

But last year the majority party ceded budget power to the Republican minority, who produced a bill that closely resembled Governor Christie’s March 2010 proposal. Many expected the same to happen this year, so it’s somewhat surprising Democratic leaders have proposed a spending plan of their own.

Here’s what is being proposed [The actual list of changes has not been posted publicly although the press has been briefed and Senate President Sweeney’s office confirmed details]:

MORE REVENUE

$913 million from higher than expected revenue estimates: In March 2011, Governor Christie’s proposed budget planned to spend $29.4 billion in FY 2012. In May, when revenue projections were updated, the Office of Legislative Services (OLS) estimated that collections for the current year and next would be $913 million more than the Governor’s original March estimate. The estimate assumed the current tax structure would remain the same.

$550 million from the reintroduction of the millionaires’ tax: Last year, the legislature passed a millionaires’ tax bill that increased taxes on taxpayers with incomes over $1 million. Governor Christie vetoed the bill. The legislature could not override the veto. In this year’s bill, the additional tax revenue would be tied to additional aid for wealthier suburban schools. Part of the logic is that Republican legislators might be willing to vote for a bill to raise income tax rates on their wealthier constituents if that additional revenue stays in the wealthier school districts.

$300 million in funding shifts from programs that have unused balances: Not all programs spend their entire appropriation every year. Unspent funds either lapse and become unavailable to the program or they rollover and become part of the same program’s spending in the following year. This year the legislature has determined that $300 million is available to be cut from programs that have been over-funded in the past and added to programs that need additional support.

AMONG THE DEMOCRATS’ PRIORITIES

School Aid: The democrats’ bill would add at least $1.1 billion to school spending. Senator Sweeney said this includes the Supreme Court-mandated $500 million for the state’s poorest, urban districts and $600 million for defunded suburban school districts. Something to keep in mind is that the original Millionaires tax enacted in 2004 was tied to property tax relief for senior citizens. That connection made the bill palatable to some Republican legislators who represented senior citizens who would benefit from the property tax relief but would not be subject to the higher tax rates.

Property Tax Relief: It is said the bill would double Homestead Property Tax Rebates – not triple them as Christie said he would do.

Money not spent on the Homestead Property Tax Rebates would be used to unfreeze the Senior Freeze program, allowing new seniors to participate and raising the amount rebated. This program freezes property taxes for people over 65 who earn less than $80,000. In the current fiscal year, only seniors already in the program were eligible for the rebate and the amount was limited to the amount received in the prior year.

It is said an additional $50 million would be made available to communities with understaffed fire and police departments – aiding Newark, Camden and other communities with high crime rates.

Health Care: It is said the bill would restore $7.5 million in ideological cuts to women’s health clinics and $300 million for NJ FamilyCare and Medicaid to allow working parents to continue to obtain affordable health care coverage.

WILL THIS WORK?

By law, New Jersey must pass a budget by the end of the day on Thursday, June 30th. Passing a budget on time is a deadline the state has always taken seriously.

It is impossible to know now how the negotiations are going – if the Democrats will be successful in their attempt to share the sacrifice among all income groups and help the poor and middle class in this state. The governor vetoed a millionaires’ tax last year and has said he will veto it again. It seems unlikely Republicans would join Democrats to over-ride the governor’s veto, especially in an election year, although redistricting has left some Republicans in more Democratic districts.

In battles of the budget, the New Jersey governor holds most of the cards. He alone has the power to determine revenues and set the limit on funds available for programs. If Governor Christie doesn’t agree the state will collect an additional $800 million next year or if he vetoes the Millionaires’ tax and the legislature can’t over ride the veto, that’s money the legislature can’t spend. In addition, New Jersey’s governor has line-item veto power. Any program he doesn’t want funded can be reduced or eliminated. If this happens, the legislature’s only recourse is to override that veto if two-thirds of the legislators support the override.

The only successful override of a governor’s veto was in 1992. Governor Florio vetoed the entire budget passed by the then Republican-controlled legislature. The Republican budget had cut $1.1 billion from Governor Florio’s proposed $15.7 billion budget. At the time, the Republicans had a 27-to-13 majority in the Senate and a 58-to-22 majority in the Assembly. The override passed both houses with no votes to spare. (It was opposed by all Democrats and, in the Assembly, two Republicans.

Democrats now have a 24-to-16 majority in the Senate and a 47-to-33 majority in the Assembly, making veto overrides more difficult. So far none have been successful. Perhaps it will be this budget – this statement of what New Jersey ought to stand for – that will be the first success.

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Filed under As a Matter of Fact, Budget Battle, Democratic Budget, Democratic priorities, Gov. Chris Christie, Health Care, higher revenue, Millionaire'sTax, New Jersey Policy Perspective, property tax relief

>As A Matter Of Fact…Proposed changes to NJ Medicaid program would wreak havoc on NJ FamilyCare

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June 9th, 2011 | Published in NJPP Blog: As a Matter of Fact …

Proposed changes to the state’s Medicaid program through a “waiver” of federal rules governing the program would wreak havoc on NJ FamilyCare, bringing the total number of uninsured parents in working poor families denied health coverage to 93,000 and touching every county in the state when prior cutbacks are also taken into account, according to an analysis by New Jersey Policy Perspective.

Essex and Hudson Counties have the highest number of uninsured adults losing coverage, but there are also substantial numbers of adults losing coverage in non-urban Ocean County and wealthier counties such as Morris and Somerset. The loss of an insurance option for those adults is likely to place greater pressure on other medical providers, such as hospital emergency rooms.

The data further showed that the exclusion of parents last year resulted in about 18,000 children not enrolling in FamilyCare, and the number would only increase as a result of new proposed new cutbacks in parent eligibility in the waiver.

Finally, while the stated purpose of the waiver is to maximize federal funding, the waiver would have the opposite effect for NJ FamilyCare. While closing enrollment would reduce state expenses by $9 million, it would cause the state to lose as much as $17 million in federal matching funds.

Continue reading…..Here

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>As a Matter Of Fact…State losing out on 9-1 match;NJ would save $45 million a year if it invested $7.5 million in family planning

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May 23rd, 2011 | Published in NJPP Blog: As a Matter of Fact …

At a time when New Jersey doesn’t have a penny to spare, the state is leaving money on the table – perhaps millions of dollars a year in federal funds that could provide family planning services to poor, uninsured women.

Not only has Governor Christie refused to continue the program that provides state grants to family planning clinics across the state (he vetoed a $7.5 million appropriation sponsored by Sen. Weinberg), the state has withdrawn its application for a Medicaid waiver that would have provided a 9-to-1 federal match of state funds that paid family planning expenses for women at or below 200% of the federal poverty level. To put it in simpler terms, under the waiver known as the Family Planning State Option the federal government would provide $9 million for every $1 million that New Jersey spent.

According to estimates from the widely-respected Guttmacher Institute, the Family Planning State Option would save New Jersey $3 million in the first year alone. After the first year, it would:

• Save the state $45 million every year.
• Provide basic medical care to over 80,000 people every year, including not just family planning but other preventive care such as cancer screenings.

• Help thousands of low income women who want to avoid pregnancy do just that – averting 4,000 abortions and 6,000 births every year.

See the full report here.

Twenty-eight states currently receive matching funds and all have seen substantial cost savings. According to estimates by the National Academy of Health Safety Policy, the savings over five years range from $75 million in Arkansas to more than $2 billion in California.

See the full report here.

The governor has said his opposition to the family planning clinic grants has nothing to do with politics, but is based in his desire to be a responsible fiscal steward of the state’s scarce resources.

He should live up to that standard.

Clearly, the numbers show the tremendous benefit that accrues by funding these grants. In addition to providing poor and working women broad and consistent access to family planning services, the Medicaid waiver allows the state to receive the 9-to-1 federal match in funding.

The fiscally responsible thing to do would be to invest a little of the state’s resources in family planning and reap the rewards of increased federal funding as well as cost savings to deal with avoidable pregnancies.

To do anything else seems to be a waste of time and money.

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Filed under As a Matter of Fact, blog, family planning, federal matching funds, Gov. Chris Christie, Medicaid, New Jersey Policy Perspective, women's health issues

>As A Matter Of Fact…Taking the family out of NJ FamilyCare

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May 17th, 2011 | Published in NJPP Blog: As a Matter of Fact …


In defense of his plan to cut the state’s federally subsidized health insurance program for working poor families, Governor Christie recently asserted that New Jersey provides more access to Medicaid than any state except New York.

That’s simply not true.

In fact, if the governor has his way, New Jersey would have one of the nation’s most restrictive policies when it comes to the Medicaid program that provides affordable health insurance to working poor families who have no other options.

It is accurate to say that when it comes to children New Jersey is second only to New York in providing health coverage through Medicaid/ NJ FamilyCare. However, when it comes to providing affordable coverage to the rest of the family, Medicaid/NJ FamilyCare lags behind nine other states and is racing toward the bottom of that list.

Last year, the state cut the NJ FamilyCare eligibility level for parents in New Jersey from 200 percent of the Federal Poverty Level (FPL) to 133 percent of FPL. For a family of three, that meant a maximum yearly income of $25,000 instead of $36,000.

The state plans even further reductions this year by reducing that eligibility threshold to just 29 percent of FPL. That’s a yearly income of about $5,300 for a family of three. That’s also the same eligibility level for the welfare program, WorkFirst NJ. The irony there is that taking away the option of NJ FamilyCare creates an incentive for parents to stop working full time and rely on welfare in order to have health insurance.

If those proposed cuts are enacted, New Jersey would have one of the lowest eligibility levels for parents in the nation. Only Alabama, Arkansas, Louisiana, Missouri and Texas would have lower eligibility levels.

More important, however, is that research in New Jersey and nationally has shown that reducing the eligibility level for parents will reduce the number of children enrolled in NJ FamilyCare. That will only increase the financial pressures on emergency rooms and hospitals as it drives up the number of uninsured New Jerseyans.

Read more about family health insurance here.

View the press event with Senators Joseph Vitale and Loretta Weinberg and advocates on this issue along with the governor’s response.

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Filed under As a Matter of Fact, Gov. Chris Christie, health reform, Medicaid, New Jersey Policy Perspective, NJ.com, NJFamilyCare

>As A Matter Of Fact…A fair exchange: Consumer driven health insurance

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May 9th, 2011 | Published in NJPP Blog: As a Matter of Fact …

One of the most important provisions of the Patient Protection and Affordable Care Act (ACA) is the establishment in every state of a health insurance market place, called an “exchange.”

These exchanges will allow individuals and small businesses to easily find and compare options for high quality, comprehensive health insurance. If done properly, the exchanges will increase competition in the insurance market and, in turn, lower the cost of insurance for nearly 800,000 uninsured New Jerseyans who must find coverage under the terms of the Affordable Care Act. The exchanges will also make available information about services and subsidies available to low and moderate income families.

While the federal government has set certain standards for exchanges, the Affordable Care Act offers each state broad flexibility to design its own exchange. The federal government will provide funding to operate exchanges until January 2015, when all of the exchanges must become self-sustaining. If the state has not established an exchange by then, the federal government will establish one for the state.

That process of creating an exchange has already begun in New Jersey.

The state, through its Working Group on the Patient Protection & Affordable Care Act and under a federal grant, has contracted with the Rutgers University Center for State Health Policy to seek input on priorities the state should consider for the implementation of key provisions of the ACA. As part of its information gathering effort, CSHP is asking interested parties to participate in a web-based survey on the design of an exchange for New Jersey by May 11. The CHSP’s report is expected to be made public later this year.

The Legislature has also set to work. The state Senate held an informational hearing last month and three bills have been introduced to establish the basic structure of an exchange (S2553, S1288 and S2597). Much of the public discussion of the details of the final legislation will take place in the Legislature’s health and insurance committees.

One of the key issues up for discussion is the extent to which the exchanges represent the interests of consumers.

For example, the exchange can be a wide-open marketplace where all insurers may participate, regardless of how much they charge or whether they meet minimal standards to protect consumers. Because the Affordable Care Act requires everyone who is uninsured to purchase insurance, that unregulated approach might leave consumers vulnerable. Alternately, the exchange could operate as an “active purchaser.” In that role, the exchange would only allow insurers to participate if they could demonstrate that their rates are reasonable and they meet other standards aimed at protecting consumers. A similar issue involves the requirements for members of the board that will ultimately oversee the exchange. Most boards are expected to be small, so decision-making will be more manageable. That makes the composition of the board a key point. Some states are establishing very strong requirements to prohibit conflicts of interest for members of the board while others go further and ban insurers, brokers and other representatives of the health care industry. Because of the importance of the exchange to consumers, the NJ for Health Care Coalition developed a set of principles recently that should be used as a guide in finalizing any legislation on exchanges. The coalition represents a broad alliance of 68 health care, consumer and social justice organizations (including NJPP) with more than two million members. It believes the public should understand the choices being made and should actively support the principles as established by the coalition to ensure that the health care exchange in New Jersey represents consumers over special interests.

Following are the principles as adopted by the coalition:

Public Interest Mission – The New Jersey Exchange should be established in the public interest, for the benefit of the people and businesses who obtain health insurance coverage for themselves, their families and their employees. It should empower consumers by giving them the information and tools they need to make sound insurance choices. The Exchange should work to reduce the number of uninsured, improve health care quality, eliminate health disparities, control costs, and ensure access to affordable, quality, accountable care across the state.

Independent Public Exchange – The Exchange should be a distinct legal public entity that is independent of other units of state government. It should be able to perform inherently governmental functions like determining income eligibility, coordinating with other state agencies and programs, and adopt rules and policies governing health insurance plan participation. The Exchange must be transparent and subject to open meetings and public disclosure laws.

Qualified, Pro-Consumer Governing Board – Consumer representatives should comprise a majority of the board. All board members must have expertise in one or more of the following areas: consumer advocacy, individual health care coverage, small employer health care coverage, health benefits plan administration and health care finance. The governing board may not include members who are affiliated with the health care industry.

Negotiate on Behalf of Consumers – The exchange must be given the authority to act as an “active purchaser.” This means the Exchange should use its large pool of consumers to negotiate, as large groups do, for the best premiums and plans. The Exchange must use this leverage to demand quality, responsiveness to consumer concerns, reasonable rates, efficient plan designs, robust provider networks and comprehensive benefits.

Full Integration with Medicaid and NJ FamilyCare – To promote seamlessness in the application process and continuity in coverage, the Exchange plans must be fully coordinated and integrated with Medicaid and NJ FamilyCare. Plans that are available in Medicaid and NJ FamilyCare must also be available in the Exchange.

Consumer Friendly – The Exchange must be easily accessible to all consumers and small businesses, use plain, easy-to-understand language and meet established standards for language, literacy and cultural competency. The Exchange must adopt a “no wrong door” approach, meaning people can access insurance through the exchange no matter how they come to seek assistance. It must reduce paperwork for individuals and small businesses, and provide in-person, telephone and online assistance and access.

Effective Outreach and Assistance – The Exchange should contract with independent organizations that will help consumers and small groups “navigate” the various health insurance plans and services offered through the Exchange. Contractors providing these navigator programs should be free of insurer conflicts of interest and have a history of working with diverse communities. The exchange must also provide customer service that understands diverse populations, such as people with disabilities, mental health needs or low-income.

One Insurance Pool – Health insurance markets work best when risk is shared across large numbers of people. The Exchange should explore how best to transition toward a unified insurance pool that combines both the individual and small employer markets. Other opportunities to expand the pool of insured people should be explored.

Improve Health Care Quality & Promote Prevention – The Exchange should only offer plans that provide a comprehensive and high-quality package of health care services. Every plan should prioritize prevention and work to reduce health disparities. Dental and mental health benefits should be included. Health care delivery networks should include essential community providers. Patients should have access to providers who speak their native language.

Community Health – The Exchange itself should promote community health by fostering collaborations between the Exchange insurers and community organizations, such as local public health departments, mental health associations, maternal and child health consortia and disease-specific nonprofits. This will ensure the efficient delivery of health information, health promotion and disease prevention and screening services.

Ensuring Exchange Stability– The State must guard against the segregation of people by their health status. Premiums in the exchange could become very expensive if insurers and brokers have the power to steer less-healthy patients into the Exchange, keeping for themselves only healthier, more profitable enrollees. The same rules must apply to plans both inside and outside of the Exchange. The Exchange must set market protections to prevent insurers and brokers from cherry-picking healthy enrollees or steering them into or out the exchange.

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Filed under As a Matter of Fact, Consumer Driven Health Insurance(CDHI), health insurance, Insurance exchange, New Jersey Policy Perspective, NJ FamilyCare, Rutgers University, The Affordable Care Act