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New Jersey: Low-Cost "Buy-in" for Uninsured Children

Under an innovative public–private collaboration, New Jersey families with incomes greater than 350 percent of the FPL can now buy coverage for their uninsured children, similar to the plans offered through SCHIP. Through an agreement between the New Jersey Department of Human Services and the private insurer Horizon NJ Health, families with incomes that exceed current SCHIP eligibility limits (e.g., $74,200 annual income for a family of four) may enroll their uninsured children in the NJ FamilyCare Advantage health plan. [1] The premiums are based on rates negotiated by the state as part of the NJ FamilyCare Program, the state's SCHIP.

"This new NJ FamilyCare program will offer all New Jersey families the opportunity to have the same peace of mind—at a cost much lower than private health insurance rates," said Human Services Commissioner Jennifer Velez.

The benefits are the same as for SCHIP recipients; they include well-child and other preventive services, hospitalization, physician visits, laboratory and X-ray services, prescription drugs, and mental health services. Monthly premiums are $137 for a family with one child, $274 for a family with two children, and $411 for a family with three or more children. These premiums are below market rates for comparable commercial insurance, but more than the publicly subsidized premiums for SCHIP-eligible families.[2] To prevent currently insured families from dropping private coverage, children must be uninsured for at least six months before they are eligible for the buy-in program. Families with more than one child must enroll all of their children.

The buy-in program is budget neutral to the government, though state negotiating power has played an important role in keeping the premiums down. The cost of providing the reduced rates will be absorbed by Horizon NJ Health. Because there is no federal funding, the program is not bound by recent federal restrictions on Medicaid and SCHIP eligibility expansions.

About 50,000 to 60,000 uninsured children are eligible for the buy-in, though a Rutgers University study projects that only about 15,000 children will enroll. [3] Applications were being accepted as of January 2008.

New Jersey's buy-in program was legislated as part of the part of the 2005 Family Health Care Coverage Act (SB 2236), which also included a Medicaid expansion to parents with income up to 115 percent of the FPL in September 2006, increasing to 133 percent of the FPL in September 2007. New Jersey joins a number of other states that offer buy-in options under SCHIP or Medicaid expansion programs.[4]

For More Information
See: State of New Jersey Office of the Governor Web site

[1] Horizon NJ Health is an independent licensee of the Blue Cross and Blue Shield Association.
[2] For example, premiums for SCHIP-eligible families with income between 300 to 350 percent of the FPL are $125 per month (
[3] According to State Senator Joseph Vitale (E-Middlesex),; D. Belloff and M. S. Marquis, Full-Cost Buy-In Options for Optimizing Coverage Through NJ FamilyCare, State of NJ Department of Human Services in Collaboration with Rutgers Center for State Health Policy, April 2006.
[4] WI, IL, and PA offer similar buy-in programs that aim to reach universal coverage for children. Other states that have offered full-cost buy-in options are CT, FL, MN, NH, NY, NC, RI, and WA (Belloff and Marquis, 2006).

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