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Decision to Expand Medicaid Coverage in New Jersey is Christie's Call

Whether the state can afford to extend Medicaid to adults without dependent children depends on who's doing the math.

While the future of the Affordable Care Act seems brighter with the re-election of President Barack Obama, the same can't be said for one of its provisions -- Medicaid expansion -- at least not in New Jersey, where Gov. Chris Christie casts his shadow over its prospects.

The governor has already expressed his skepticism about expanding the program, citing its impact on the state's already overburdened budget. Ultimately, his decision will determine the number of New Jersey residents who are eligible for Medicaid.

The ACA lets states decide for themselves whether to take advantage of federal funds to increase the size of their Medicaid rolls. Given New Jersey's divided legislature, the call is Christie's: will the state accept Medicaid dollars to insure residents without dependent children who earn up to 133 percent of the federal poverty level, or FPL?

Currently, the state provides health insurance for children whose family income is 250 percent of the federal poverty level, as well as parents with a family income up to 133 percent of the FPL

But adults without children are not eligible unless they earn only 26 percent of the FPL.

Sen. Joseph Vitale (D-Middlesex), who chairs the Senate Health, Human Services and Senior Citizens Committee, notes that New Jersey is among the states with the strictest eligibility for childless adults. Single adults with more than $2,900 in annual income and couples with more than $3,930 are ineligible.

“If you’re living in a park or under a tree, you’re eligible,” Vitale said. “Otherwise, you’re not.”

Medicaid Demographics

The Rutgers Center on State Health Policy estimates that the expansion would provide health coverage for 234,000 New Jerseyans, although some of these residents are already eligible for Medicaid but haven’t enrolled.

“There’s probably a net savings to the state of enrolling them in Medicaid,” said center director Joel Cantor, noting that at least part of the new costs would be offset by reduced costs to charity care and other programs.

The mathematics of Medicaid expansion are fairly straightforward.

From 2014 to 2016, the federal government would cover 100 percent of the cost of expanded eligibility. After that, the state would be required to pick up part of the cost, with the level increasing from 5 percent in 2017 to 10 percent in 2020. The level would then hold steady at 10 percent, with the federal government picking up 90 percent of the cost.

Medicaid is currently a shared expense, with both the federal government and the state covering 50 percent of the cost. The expansion coverage would apply only to new Medicaid patients.

“There’d be serious downsides to not doing it and few if any downsides of doing it, at least in the first three years,” Cantor said. He added that the federal government is cutting its subsidy to charity care -- government payments for healthcare for the uninsured.

“Either the state will have to pick up the tab or the hospitals will be stuck with it,” Cantor said.

Medicaid expansion will be the subject of a Senate Health, Human Services and Senior Citizens Committee meeting on Monday. Vitale is sponsoring a resolution urging Christie to expand eligibility,

Vitale’s position is supported by Katherine Grant-Davis, president and chief executive officer of the New Jersey Primary Care Association, which includes community health centers that serve low-income residents.

Grant-Davis said Medicaid has the potential for opening up more specialized care, including dental care, to currently uninsured adults, adding “it’s a better way of insuring that health disparities are addressed.”

She said Medicaid expansion has the potential to reduce hospital visits for patients with chronic diseases, adding that Christie has been a strong supporter of community health centers.

“He knows the work that we do and I remain hopeful he will agree” to the expansion, Grant-Davis said.

Continue reading on NJSpotlight.com.

NJ Spotlight is an issue-driven news website that provides critical insight to New Jersey’s communities and businesses. It is non-partisan, independent, policy-centered and community-minded.

Carly EngageAmerica November 26, 2012 at 08:22 PM
The reelection of President Obama provides a clear passage for health care reform. However, this massive top-down reform comes with major structural flaws. The ACA promises what it cannot deliver. The reform increases demand while the supply of health care services remains stagnant.

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