Today, the United States Department of Health and Human Services (HHS) awarded New Jersey a $22.6-million contract to continue operating NJ Protect, the State’s health insurance program for individuals with pre-existing conditions, from June through the end of the year.

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As a result of the extension, the 1,520 people currently enrolled in the state–operated program can maintain their doctors and provider networks current coverage and will not see an increase in their premiums this year.

“This is good news for New Jersey residents who will continue to be served by our state-operated program and keep their existing doctors, healthcare provider networks, health plans, and also can be assured that their premiums will not rise for the remainder of the year,” says New Jersey Department of Banking and Insurance (DOBI) Commissioner Ken Kobylowski. “We felt very strongly that the state and its New Jersey carriers could do a better job running the program.”

Pre-existing Condition Insurance Plans (PCIPs) were created in all states in 2010. The program was open to people with pre-existing illnesses, such as cancer, heart disease, and diabetes, who had not had health insurance for six months. States had the option of operating their own PCIPs or letting the federal government run the program. New Jersey introduced its state-operated PCIP in August 2010.

In February, HHS told PCIP contractors in all states to stop accepting new enrollment within 15 days. As a result, the final date that consumers could submit new applications for NJ Protect was March 1. Kobylowski sent a letter to HHS Secretary Sebelius requesting that she reconsider the ban on new enrollees, which HHS declined.

HHS then informed PCIP contractors that they would have to accept a fixed budget for the balance of the year or turn the program over to the Federal PCIP. As a result, 17 states which chose to operate their own PCIPs have decided to allow them to be federally-run for the remainder of 2013. Shifting from a state- to a federally-run PCIP would potentially force consumers in those states to switch doctors and healthcare networks, and face plan changes and premium increases.

“New Jersey’s program has operated far more efficiently than many other states’ PCIP programs,” contends Kobylowski. “Also, by keeping the program in New Jersey, we were ensuring that those enrolled in NJ Protect could keep their doctors and provider networks.”