Health Insurance Exchanges: Governance Issues for New Jersey

Abstract

The Affordable Care Act (the “ACA”) enacted sweeping changes in public and private insurance law. One key aspect of the ACA’s reform of the private insurance market is its provision for the creation of health insurance exchanges. The idea of health insurance exchanges is not new. Indeed, New Jersey for almost two decades has operated versions of exchanges for the individual and small group markets, and therefore has some experience in organizing relatively uniform and transparent insurance markets for the benefit of consumers. The ACA creates obligations and opportunities for New Jersey to further this effort. Before the exchanges can begin operating, facilitating the broader provision of health coverage for the people of New Jersey, a fundamental question must be asked: how might the New Jersey Legislature design the governance of this new entity? The issues that arise in connection with exchange governance are many, and their difficulty should not be minimized. The goal, however, is to effectively and efficiently serve the needs of New Jersey within the framework created by the ACA in a manner consistent with the public principles of our State regarding health insurance coverage for individuals and small groups. Other implementation issues will be addressed in future Briefs; the focus of this Brief is the governance of the new entity that will implement the Legislature’s vision.The New Jersey Legislature is actively considering several bills that would create health insurance exchanges.