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Trenton – A Senate resolution advocating for a plan to expand Medicaid in New Jersey gained the approval of the Assembly on Monday. The measure urges Governor Chris Christie to accept a federal proposal to greatly expand Medicaid in New Jersey, a plan that would extend coverage to hundreds of thousands of the uninsured, bring tens of billions in federal funds to the state and, in the process, produce savings for hospitals by reducing uncompensated care expenses.
The Assembly voted 45 – 30 in support of SCR-132, which urges the governor to accept the offer from the federal government to pay the full cost of the expansion the first three years, followed by a three-year phase-down to a permanent 90 percent reimbursement. The Senate approved the resolution on November 29, 2012.
“Medicaid in New Jersey now covers those living in extreme poverty but denies coverage for so many others who are poor, especially childless adults,” said Senator Joe Vitale, the lead sponsor of the resolution. “If we don’t accept the expansion, we will create a health care donut hole that will leave these people without coverage.”
A key component of the Affordable Care Act, the Medicaid expansion could bring 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. Hospitals could realize additional savings through reduced charity care that isn’t reimbursed by the state.
“We have the unprecedented opportunity to extend medical coverage to a large number of people who are uninsured,” said Senate Majority Leader Loretta Weinberg, a co-sponsor of the resolution. “At the same time, it will bring as much as $22 billion to New Jersey and provide lasting savings for New Jersey’s hospitals.”
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 - who constitute the largest segment of New Jersey residents who lack health insurance - who currently aren’t eligible in New Jersey.
A family of two with an income of $20,123 and a family of four with an income of $30,657 would be at 133 percent of the poverty rate, according to the Rutgers report.
“The failure to accept the expansion will create the equivalent of a Medicaid donut hole,” said Senator Vitale, the chairman of the Senate Health, Human Services and Senior Citizens Committee. “The health reform law will provide affordable subsidies to those who earn from 133 percent to 400 percent of the poverty level but the Medicaid expansion is needed to cover those below 133 percent. Without it, the largest segment of people who need help the most will be denied affordable coverage.”
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.
Senator Weinberg said the “health care disparity” that now disproportionately cuts off minority communities from access to needed medical treatment would be helped significantly by the expansion.
“The expansion will also address the health care disparity that leaves a disproportionate number of women and minorities without coverage,” said Senator Weinberg. “This disparity will be reduced by allowing those who can’t afford medical insurance to qualify for Medicaid. I urge the governor to accept the offer and participate in the plan.”
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