Andréa Caballero, MPA, speaks with Linda Schwimmer, JD, President and CEO of the New Jersey Health Care Quality Institute (Quality Institute) to learn about a pressing issue: the health of New Jersey’s Small Group Insurance Market. This market, which covers employers with 2-50 employees in the Garden State, is on the precipice of a downward spiral. At its height, it covered upward of 1 million consumers, but now its enrollment is hovering at about 300k consumers with the further threat of adverse selection creating an imbalanced risk pool. Without doing something to address this issue, the small group market, which offers small businesses a secure option for comprehensive health insurance, may effectively disappear in the Garden State. New Jersey is not alone; due to the COVID-19 pandemic as well as changes in health insurance regulations in the U.S., there is concern for the health of small group insurance markets all across the country.
Linda Schwimmer explores how the health of the small group market impacts self-funded employers, the rise of alternative employer-sponsored health plans known as level-funded insurance, and, finally, what the short and long-term policy solutions are for strengthening the small group market. Interestingly, regulations that prohibit the use of high-value purchasing strategies, like site of service-based payments, reference pricing, and preferred drug lists, may be negatively impacting the small group market. While this episode strays a bit from CPR’s focus in self-funded health care coverage, it provides important insights on the interconnectedness of the health insurance ecosystem at large. As Linda points out, when one insurance market is suffering, there are implications for the health system as a whole.
For more information on this topic, read the Quality Institute’s July 2020 White Paper, “Short and Long-Term Strategies to Support Health Care Affordability and Price Transparency for Small Employers and Consumers in New Jersey.”