Vitale-Gill-Weinberg Medicaid Expansion Legislation Advances

A view of the Senate Chambers from the 2010-2011 Senate Reorganization.

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 Health, Human Services and Senior Citizens Committee.

“The federal government has offered us a windfall in savings through this Medicaid expansion program,” said Senator Vitale, D-Middlesex. “If we broaden our Medicaid eligibility income threshold in New Jersey, allowing more struggling New Jerseyans to register for Medicaid, 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. In good conscience, we cannot leave these federal dollars on the table.”

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.

“Under this expansion hundreds of thousands of New Jersey residents will be provided access to preventive and primary health care, which is both better for the patient and more cost effective for taxpayers,” said Senator Gill, D-Essex and Passaic. “Many of New Jersey’s uninsured use emergency rooms and hospitals as their doctor when they are already sick. The expansion will allow individuals to see primary care physicians when the first signs of illness or injury occur.”

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.

“The public is already paying for this care through the state-funded charity care program that provides reimbursements to hospitals for treating uninsured patients,” said Senate Majority Leader Weinberg, D-Bergen. “We would be foolish to turn down an opportunity through this federal Medicaid expansion program to cut the state’s financial burden for providing emergency care in half for the next three years and then greatly reduce it moving forward.”

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.

“This will extend health care coverage to a large segment of the uninsured in New Jersey,” said Senator Vitale. “These are people who have been forced to go without medical care because they can’t afford it. Medicaid not only treats health problems, it can be a way of preventing illnesses from occurring, which saves pain and suffering on the part of patients and reduces treatment costs in the long run.”

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 Health Committee with a vote of 7-1-1. It now heads to Senate Budget and Appropriations Committee for further review.

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