NJ Senate Approves Medicaid Expansion

TRENTON –  The New Jersey Senate today approved a bill that would provide Medicaid health insurance to hundreds of thousands of New Jersey residents by a vote of 26-12.

“The federal government is offering states a real gift with their Medicaid Expansion deal – providing hundreds of thousands on low-income New Jersey residents access to health insurance they may otherwise be unable to afford, and at no initial cost to the state,” said Senate Health Committee Chairman Joseph F. Vitale, D-Middlesex. “Even in the long-term, the federal government will be contributing 90 percent of the costs associated with this program expansion, which is a real windfall for New Jersey residents. Turning down this offer and turning away these funds would be foolish as it would risk the health and wellbeing of some of New Jersey’s most needy residents.”

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.

“By expanding Medicaid we will provide health coverage to hundreds of thousands of New Jerseyans, many of whom did not previously have access to primary health care services. This will allow residents to get treatment when the first signs of illness occur, preventing more serious and more costly health problems later on,” said Senator Nia Gill, D-Essex and Passaic. “This is not only good health policy, but is also the responsible move for the state financially given that the federal government is paying for the expansion entirely in the first few years, and covering the majority of the cost going forward. Quite simply, we have an obligation to accept the federal funding that is being offered to ensure that our most vulnerable residents are protected. This just makes sense.”

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.

“New Jersey residents are already picking up the tab of health care for the state’s uninsured through the state’s charity care program that reimburses hospitals for emergency room visits by patients unable to pay,” said Majority Leader Loretta Weinberg, D-Bergen. “Additionally, recent cuts to FamilyCare left even more low income residents – particularly women – without adequate health coverage. By expanding Medicare, we will provide more New Jerseyans with access to primary and preventive care options that will have positive long term effects on the health and wellbeing of the state’s population.”

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, Gov. Chris Christie expressed plans to participate in the federal Medicaid Expansion Program. This bill would establish the statutory framework to make the expansion possible.

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