Democrats Appalled by Christie’s Proposed Medicaid Cuts

Planned $300 Medicaid overhaul would overburden NJ's neediest, Democrats assert

Democratic lawmakers say they still need much more information about the administration’s plans to cut $300 million from the state Medicaid program. But after grilling state officials for more than two hours they concluded that the proposal was “simply inhumane and fiscally irresponsible,” in the words of one Assemblyman.

The Assembly Budget Committee held a special hearing Tuesday to press administration officials for specifics on the plan, which is included in the 2012 budget. That means it must be adopted by the legislature by June 30, although the Medicaid plan still requires federal approval.

The proposal calls for a major overhaul of the Medicaid program, which uses a mix of federal and state money to provide health insurance for poor and disabled residents. It includes a range of reforms, including a provision that would drastically reduce the income cap for parent enrollment, excluding tens of thousands of mothers and fathers who earn as little as $7,400 a year — or just $142 a week — for a family of three. These parents would clearly be eligible today.

Democrats said these changes place far too great a burden on New Jersey’s neediest and most frail residents, those that require protection most in tough economic times. “Do you realistically expect that people can survive on that, and that when they go receive medical care they can afford to pay for it?” asked Assemblyman Gary Schaer (D-Passaic), who noted that – given the cost of housing in his district – a family at that income level could hardly afford shelter.

Streamlining Medicaid

The Department of Human Services Commissioner Jennifer Velez, who oversees many of the state’s Medicaid plans, said the reforms were necessary to protect the program’s core constituency: children, seniors, the disabled and the very poor. The proposal would greatly streamline the program’s administration and allow for greater flexibility, but children will remain eligible and nobody currently enrolled will be kicked out, Velez said.

“This takes the program back to what it was designed to do,” Velez told the committee, noting that the proposed change would bring parent eligibility in line with the restrictions on childless adults, who — since 2001 — must earn less than around 28 percent of the federal poverty limit, some $7,400 annually, to be admitted.

“But that’s not a good thing,” noted Assemblywoman Joan Quigley (D-Bergen). “That shouldn’t be our standard.”

Velez and some of her colleagues will travel to Washington, D.C., on Friday to discuss the so-called Comprehensive Medicaid Waiver Request with federal officials as part of an ongoing discussion about the proposal, which will be finalized and filed by June 30. The waiver is part of more than half a billion in cuts and spending reductions to healthcare programs included in the 2012 budget.

Democratic committee members expressed frustration over a lack of details on the waiver request; the only specifics made public so far were contained in an 18-page “concept paper” Human Services released late Friday. The department has yet to provide a breakdown of the $300 million savings, although Velez said Tuesday that the income eligibility change would affect about 23,000 people for a savings to the state of $9 million.

“It is exactly these savings that will help sustain these important programs,” added acting Health Commissioner Mary O’Dowd, who handles other aspects of the Medicaid program.

Emergency Room Visits

Another concern for Democrats on the panel was that these short-term savings might end up costing taxpayers more in the long run. Uninsured residents are more likely to seek treatment in hospital emergency rooms, where the state covers the cost through Charity Care, they said, rather than go to a doctor or clinic where they must dig into their pockets. This emergency room care is not only inappropriate, in many cases, but also far more expensive.

“When they get sick, where will they go? They still need mammograms, they still need ovarian screenings…. they still get sick,” asked an exasperated Budget Chairman Lou Greenwald, D-Camden.

“The mission has been to find these people and get them in insurance,” he continued, recalling how over the past 13 years the state has expanded Medicaid through its popular FamilyCare program to reach more and more working-class residents. Today, FamilyCare covers parents who earn up to 133 percent of the federal poverty line, or less than $24,000 a year for three people, and children in families earning up to 300 percent. At one point parents were covered up to 200 percent, or about $37,000 a year for a family of three.

Assemblyman Gordon Johnson (D-Bergen), said in a statement released after the hearing that the proposal was another attack by Gov. Chris Christie on the working poor. He argued that it is “simply inhuman and fiscally irresponsible” since it will result in more residents with untreated conditions and more expensive emergency care.

“I’ve got real concerns here and I don’t see the specifics behind this plan to address those concerns,” Greenwald added. “This is a $300 million question. Let’s get some detail.”

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