Bill Would Allow New Jersey to Accept Billions of Dollars in Federal Money to Pay for Low-Income Residents’ Health Insurance
TRENTON – Legislation sponsored by Senate Health Committee Chairman Joseph F. Vitale, Senate Commerce Committee Chairwoman Nia H. Gill, and Senate Majority Leader Loretta Weinberg that would provide Medicaid health insurance to hundreds of thousands of New Jersey residents was approved today by the Senate Budget and Appropriations Committee.
“The federal government’s Medicaid expansion program offers states a great opportunity to provide health coverage to some of New Jersey’s most needy residents, at no initial cost to the state,” said Senator Vitale, D-Middlesex. “Since the federal government will pick up the entire tab for the first three years and eventually pay 90 percent of the costs associated with this program, expanding the Medicaid program is a real windfall in savings for the state and will allow more struggling New Jerseyans access to Medicaid.”
The bill, S-2644, would expand Medicaid income eligibility for non-elderly adult residents of New Jersey to 138 percent of the federal poverty line, authorized under the federal Patient Protection and Affordable Care Act (ACA). The ACA stipulates that the federal government will pick up 100 percent of costs associated with expanding Medicaid for the first three years. After a three-year phase down, the federal government will permanently pay 90 percent of the costs.
Medicaid expansion could bring in up to $22 billion in federal funds over eight years, provide coverage to at least 234,000 of the uninsured and reduce by more than $300 million the state expenditure for uncompensated hospital care, according to numerous studies by health care and public policy organizations.
“This expansion will provide coverage for hundreds of thousands of residents, many of whom would not otherwise have access to preventive and primary health care. This initiative will lead to better health outcomes for our residents, and ultimately will save lives,” said Senator Gill, D-Essex and Passaic. “We not only have a moral obligation to provide health care coverage to our residents under this program, but given that the federal government is paying for the expansion entirely in the first few years, and covering the majority of the cost in later years, we have a fiscal obligation to accept the federal funding that is available and to implement the Medicaid expansion.”
Hospitals could realize additional savings through reduced charity care that isn’t reimbursed by the state. The state spent $675 million this year to partially compensate hospitals for unpaid bills, mostly for treating patients without insurance. This annual expense could be slashed in half, according to an analysis by New Jersey Policy Perspective, once Medicaid is expanded.
“Expanding health coverage to a large segment of New Jersey’s uninsured will not only provide these individuals with access to preventive and primary care, but will reduce New Jersey’s needed investment in the state-funded charity care program that provides reimbursements to hospitals for treating uninsured patients,” said Senate Majority Leader Weinberg, D-Bergen. “If we were to turn down the federal government’s Medicaid expansion program, we will not only be foolishly leaving money on the table, but in effect would be sending our residents’ tax dollars to states that are implementing this program. That is simply not acceptable.”
A recent study published in the New England Journal of Medicine found that Medicaid expansion saved lives and improved the health of newly-covered residents of states that expanded Medicaid.
The health reform law increases Medicaid eligibility to as much as 138 percent of the federal poverty level, extending coverage to more than 15 million people nationwide, including at least 234,000 in New Jersey, according to a study by the Rutgers Center for State Health Policy. Most are childless adults – which constitute the largest segment of New Jersey residents who lack health insurance – who currently aren’t eligible in New Jersey.
During his annual Budget Address, Governor Christie expressed plans to participate in the federal Medicaid Expansion Program. This bill would establish the statutory framework to make the expansion possible.
The bill was approved by the Senate Budget and Appropriations Committee with a vote of 7-4-1. It now heads to the full Senate for consideration.