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State Healthcare Spending to See Slight Uptick in Coming Fiscal Year

Andrew Kitchenman | June 25, 2013

Budget finds funds for mental health, addiction service providers, but critics decry gaps.

Thanks to additional federal Medicaid funding, healthcare spending in New Jersey will see a slight bump over the next year. The increase comes courtesy of the expanded Medicaid coverage made possible by the 2010 Affordable Care Act and agreed to by Gov. Chris Christie.

The additional federal Medicaid money will save the state $227 million. That will more than offset cuts in state Medicaid and Department of Health funding, which have been reduced by $90 million, from $4.36 billion to $4.27 billion.

Despite those cuts, however, the state did increase the allocations for mental health and addiction services, as well as for nursing homes and community care for the disabled.

But Sen. Joseph F. Vitale (D-Middlesex), a leading healthcare advocate in the Legislature, says the increases are inadequate, since they don't cover Medicaid expansion or outreach for the state health insurance exchange.

Advocates for mental health and addiction services were grateful for a 1 percent cost-of-living adjustment. New Jersey Association of Mental Health and Addiction Agencies CEO Debra L. Wentz said her group had asked for a 5 percent gain but was pleased to see an increase after five years of flat funding.

“Anything is welcome and the fact that [the increase is] in there is positive. More funding will be needed going forward, but this is what the Legislature and governor could do now,” Wentz said. “It’s greatly appreciated.”

Wentz said service providers will continue to make the case for more funding over the next year.

But Vitale, chairman of the Senate Health, Social Services and Senior Citizens Committee, was far less satisfied.

One of his chief criticisms is that the measure leaves in place cuts to the Family Care insurance program

Family Care is the state’s largest Medicaid-funded program, supporting low-income children and some parents. In 2010, the state changed eligibility requirements, dropping some low- and moderate-income parents.

The state is launching a large-scale expansion of other Medicaid programs, which largely affect adults without children, as part of the Affordable Care Act. But the parents who were cut from Medicaid in 2010 will remain ineligible for the Family Care program.

Vitale also said he was concerned that the state doesn’t have funding for outreach to help residents sign up for the health insurance exchange that is launching October 1. He noted that Christie opted against having a state-run exchange, which would have allowed New Jersey to tap tens of millions of dollars in federal funds.

“Now we don’t have those resources and we’re behind New York, Maryland, and other states who did opt into a state-run program, did receive tens of millions of dollars of free money to educate the public, for aid to nonprofits to enroll people,” Vitale said.

“The governor said ‘No.’ Now we’re behind the eight-ball in terms of enrolling people and having them be aware that these programs exist,” Vitale commented.

Sen. Diane Allen (R-Burlington) said that everyone would like to see more funding for healthcare in the budget, but that it had to compete with other priorities for limited funds.

“I think this was a reasonable budget,” Allen said.

However, Allen and Vitale are planning to hold a “summit” to discuss potential increases to Medicaid funding, possibly in September. Topics that may make the agenda include the state’s Medicaid reimbursement rates, as well as how Medicaid funding is spent.

“What our hope is, is to come up with something that we’ll be able to incorporate in the next budget,” Allen said. “We believe that the state needs to stand up and take the responsibility of doing what needs to be done.”

Sen. Paul Sarlo (D-Bergen and Passaic) noted that some healthcare programs were included in supplemental items added to the budget through negotiations. These increases included funding for cancer research, nursing homes, and a cost-of-living adjustment for community-based service providers for disabled.

“By doing a negotiated budget, there were some priorities of our members that we were able to protect,” Sarlo said.

One item that didn’t make it into the budget was a pilot program to coordinate mental healthcare for children. Bill sponsor Sen. Robert Gordon (D-Bergen and Passaic) said he’s interested in either including the pilot program or including funding to provide those services across the state in the budget starting in July 2014.

“Mental health remains a priority, particularly pediatric and community mental health,” Gordon said, adding that he’s trying to organize a “mental health and substance abuse caucus” on either a formal or informal basis. “This is a huge problem and it’s not really getting attention in the budget or in other aspects of public policy.”

New Jersey Policy Perspective senior policy analyst Raymond J. Castro said he was encouraged by Vitale and Allen’s interest in strengthening Medicaid, but frustrated that the budget didn’t include $2.8 million in Medicaid funding, which could have been used to receive nearly $6 million in federal matching funds for outreach. The state is expecting more than 100,000 newly eligible residents to apply for the federal- and state-funded health insurance program under an expansion funded by the 2010 Affordable Care Act and agreed to by Christie.

“We simply don’t have the funds for people to receive help to fill out the applications,” to apply for Medicaid, Castro said. He noted that legislators found money for other areas that don’t include a federal match.

“I don’t understand why that happened,” Castro said.

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