GOP Opposition to Medicaid Expansion May Be Preview of Governor’s Stance

Andrew Kitchenman | December 4, 2012 | Health Care
State Senate vote along party lines reflects Christie’s doubts that feds will fund broader coverage

Credit: Amanda Brown
State Sen. Diane B. Allen (R-Burlington)

While the state Senate voted on Nov. 29 to urge Gov. Chris Christie to expand eligibility for Medicaid enrollment in the state, the votes against the measure may be more telling than the votes for it.

The 22-13 vote reflected a partisan split, with every vote in favor coming from a Democrat and every vote opposed from a Republican. Two Democrats and three Republicans didn’t vote, including one Republican who was absent.

The resolution, sponsored by state Sen. Joseph Vitale (D-Middlesex) and state Sen. Loretta Weinberg (D-Bergen), urged Christie to support the expansion.

Supporters have repeatedly described it as a “no-brainer” due to the large share of the costs that the federal government is committed to covering. This would amount to 100 percent of added costs in the first three years to the expansion, while adding 291,000 people to the state’s Medicaid rolls, according to a report by Urban Institute researchers.

But the expansion advocates will have to convince a skeptical Christie, who said in July that the state didn’t have much room to expand Medicaid after previous governors expanded the program. That skepticism is reflected in the reasons Republican senators gave for opposing the measure.

Sen. Diane B. Allen (R-Burlington), who has bucked her party in the past on some healthcare issues, said she opposed the resolution because she is worried about the fiscal impact of Medicaid expansion.

“I just worry about that. Whether we’ll be able to sustain it, whether it’s the right thing to do right now, should we be on a better financial footing, and by the way, should we have more doctors,” Allen said, referring to a current shortage in the number of doctors who accept Medicaid recipients.

Allen doubts the federal government will uphold its commitment to cover the cost of expanding eligibility. State spending on Medicaid is roughly $4 billion annually, one of the largest pieces of the state budget, but the total cost of the expansion over 10 years is projected to be less than $1.2 billion, including savings from reduced charity care, according to the Urban Institute.

Under the Affordable Care Act, the federal share of Medicaid expenses for the newly eligible would be 100 percent from 2014 to 2016, before decreasing to 95 percent in 2017, 94 percent in 2018, 93 percent in 2019 and 90 percent in 2020 and all future years.

“I don’t know that that’s going to be the way it’s going to go, because we know the way things vary and change all the time,” Allen said, noting that federal aid for education was fleeting after the 2009 stimulus law.

“I just saw how devastating it was when we had the money come in for teachers and then we had to just fire everybody,” she said.

The expanded coverage would include residents whose incomes are above the maximum allowed for the state’s General Assistance program, or $2,520 per year for a single person who isn’t disabled, but below 138 percent of the federal poverty line, which is currently $15,415.

Allen said the state is still paying for commitments made during the administration of former Gov. Jon Corzine.

“With the economic downturn, we continue to be in a hole,” Allen said. “We need to get ourselves out of a hole and get on a firm financial footing before we make promises to fund certain things that are a huge ticket item.”

This skepticism is not shared by representatives of the state’s hospitals.

Suzanne Ianni, president and CEO of the Hospital Alliance of New Jersey, said the state would come out ahead by expanding eligibility.

“No matter how you look at it, Medicaid expansion is a positive for New Jersey – whenever we can reduce the number of uninsured in New Jersey that’s a positive,” said Ianni, whose 14-hospital alliance includes many of the state’s urban and safety-net hospitals.

Ianni noted that expansion of the coverage would enable the state to reduce its share of Medicaid payments for parents in low-income households.

State Sen. Robert W. Singer (R-Monmouth and Ocean) questioned the position of hospitals, noting that they have long said the Medicaid reimbursement level was inadequate. He added that he has yet to see a full explanation of how the state budget would be affected by Medicaid expansion.

“What happens when the feds say, ‘OK, the subsidies are over,’ ” Singer said, adding that if he was convinced that the expansion wouldn’t cost the state any more money, he could support it.

Singer also is skeptical that the state would save much in charity care, which is paid by the state and federal governments to hospitals for care to the uninsured. Singer noted that much charity care funding pays for treatment of illegal or undocumented immigrants, who aren’t eligible for the Medicaid expansion.

While the federal government hasn’t set a deadline for state government decisions on Medicaid, state officials would have to account for the effect of the expansion in the budget year starting on July 1, 2013. This makes Christie’s budget address, scheduled for February, a key point in determining whether Medicaid expansion will occur on Jan. 1, 2014, the date set by the Affordable Care Act.

New Jersey Hospital Association spokeswoman Kerry McKean Kelly said hospitals understand the concerns voiced by state officials about the cost of Medicaid expansion, which the association supports.

“From our perspective, we think there is a very good business case for expansion,” McKean Kelly said. She noted that under the law, federal officials would allow states to opt out of the expansion at any time “if the feds are not fulfilling their cost obligation.”

McKean Kelly said Medicaid expansion was a key part of the federal changes in healthcare coverage.

“Healthcare reform is really a big gamble. Hospitals and other providers put money on the table,” including cuts to Medicare funding, in return for increasing the number of insured Americans, McKean Kelly said. “If you have one without the other, it’s going to create real problems for healthcare providers and their patients.”

Not all Republicans are totally opposed to Medicaid expansion. While Sen. Samuel D. Thompson (R-Burlington, Middlesex, Monmouth and Ocean) said he is concerned about the fiscal impact, he didn’t vote on the resolution. He questioned studies that showed the total federal and state cost of expansion growing at a slower rate than the number of new enrollees, saying “the numbers don’t make any sense.”

Thompson said he will be looking for more information before he reaches a conclusion.

“I wasn’t convinced it’s the right thing, but I wasn’t totally convinced to vote no,” he said.