StPetersER Sapone.JPG

Dr. Kyon Hood examines Stephanie Cubas, 4, of Perth Amboy at the pediatric emergency room at St. Peter's University Hospital in New Brunswick in this 2013 file photo. FamilyCare Advantage, an insurance plan created for children from middle-class families who earn too much to qualify for financial assistance, was canceled March 31 because it did not meet the requirements of the Affordable Care Act.

(Patti Sapone/The Star-Ledger)

While the federal government was trumpeting the benefits of Obamacare to boost enrollment earlier this year, about 1,800 families in New Jersey were receiving letters telling them their children would be losing their health coverage last week.

The Affordable Care Act — the federal law that mandates everyone have insurance — effectively killed FamilyCare Advantage, a low-cost option for kids in New Jersey created six years ago for parents who earned too much to qualify for Medicaid and other subsidized programs but too little to buy on a policy on their own. The state program was the first of its kind in the nation.

Horizon Blue Cross Blue Shield of New Jersey was the only insurance carrier that agreed to offer the FamilyCare Advantage plan, which covered most medical, dental and vision needs for the relative bargain of $144 a month per child.

But it didn’t offer mental health treatment and several other services Obamacare requires, and that was the fatal flaw, said Sen. Joseph Vitale (D-Middlesex), who sponsored the law creating the program.

Vitale said he tried for several months to broker a deal between Horizon and the U.S. Centers for Medicare and Medicaid Services, but neither side could agree on how to make it affordable and legal. The program ended last week.

People who tried to buy a plan on the health exchange would have been hit with sticker shock, Vitale said. FamilyCare Advantage had no deductible, compared with the less generous Horizon plan on the exchange that has a minimum deductible of $1,500. And most people would not have qualified for subsidies through the exchange because they earned too much money, he said.

“This is enormously disappointing. New Jersey was always ahead of the nation on health coverage for children and parents,” said Vitale. “It was $5 for doctor visits, $1 for pharmacy and no deductible or cost sharing.”

Vitale noted the irony that the program created to extend universal health care access to all New Jersey's uninsured children was done in by federal health care reform.

FamilyCare Advantage "was a great deal," but with little marketing it never caught on, Vitale said. "It's New Jersey's best-kept secret."

Surprised

Bob Miotla of Gloucester Township, who signed up his son, Robert, for the coverage after his wife’s company stopped offering family coverage about four years ago, said the letter from Horizon in January “took us by surprise.”

“Without having that safety net, if an illness arises, we will probably take him to the ER,” said Miotla, who is disabled and gets Medicare.

The news made him “extremely angry” with both the federal government and Horizon, Miotla said.

“Obamacare did snuff it out, but it also looks like Horizon was looking for a reason to end it. With all of the federal mandates (for employers to offer insurance) delayed, they didn’t need to do anything right now.”

This is not the only instance of the Affordable Care Act clashing with existing health policies.

About 800,000 people who bought their coverage through the state-regulated small-employer and individual market programs were informed last fall their plans did not contain all of what the federal law requires: hospitalization, lab services, rehab services and devices, outpatient services, emergency care, prescription drugs, maternity care, preventive services, mental health and substance abuse treatment, and pediatric services, including oral and vision care. Insurance policies also could no longer contain lifetime caps on benefits.

As millions across the nation started losing their coverage for the same reason, President Obama asked governors and state insurance commissioners to preserve these policies for a year.

Gov. Chris Christie let the insurance companies decide, and they declined, saying the federal government still required no lifetime cap on benefits, which would make the policies much more expensive.

The same reckoning played out with the FamilyCare Advantage plan.

“The NJ FamilyCare Advantage plan does not meet all ACA requirements and would have had to be significantly changed. This would have increased considerably the premiums for the plan,” Horizon spokesman Tom Vincz said.

Disagreeing

Danielle Liss, spokeswoman for the federal Medicaid program, disagreed with Horizon’s assessment. “Horizon had the option to extend any non-ACA compliant plans for another year even without changing benefits to meet the ACA requirements said,” she said.

Vitale said that in the end, the Obama administration would not allow the Advantage plan to be offered to just the original customers without it being an option for everyone.

"Now people will have to go on the exchange, where the premiums are reasonable but the deductibles are enormous," he said. "The Affordable Care Act is costing families a lot more than it should."

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