Is it worth the price for New Jersey to expand its Medicaid program under the federal Affordable Care Act?
While Gov. Christie worries about the impact on the state budget – the federal government would bankroll the Medicaid expansion through 2016, but states would pay 10 percent of the cost after that – a new study suggests that many of New Jersey’s new beneficiaries would be residents who have jobs in low-paying or struggling sectors including construction, food service and landscaping.
The study by New Jersey Policy Perspective found that 177,000 of the 318,000 New Jersey adults who would be able to get coverage under expanded eligibility have jobs.
The study is the latest piece of evidence cited by Medicaid expansion advocates. It followed previous studies that estimated the overall number of residents who could be covered under an expansion, as well as the impact of expansion on the state budget.
If Christie decides to expand coverage, he would be going against a trend in his party – only two Republican governors, Nevada Gov. Brian Sandoval and New Mexico Gov. Susana Martinez, have opted for expansion. In New Jersey, a Senate vote in December on a resolution that supported Medicaid expansion didn’t receive any Republican votes.
In the study, titled “Another Reason to Expand Medicaid: Working New Jerseyans in Most Populations Would Benefit,” author Raymond J. Castro found that residents who would be newly eligible for Medicaid work in 190 of the 268 different census-defined job categories.
“A healthier workforce is a more productive workforce,” said Castro, who added, “Medicaid expansion has been politicized in some other states with very conservative governors – that must not happen in New Jersey.”
Medicaid expansion under the 2010 Affordable Care Act would expand eligibility to 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.
A U.S. Supreme Court ruling that upheld the ACA also said that each state must decide whether to expand eligibility.
Supporters of expansion have argued that in addition to covering more residents, it would bring $2 billion in federal spending into the state annually, creating healthcare jobs and improving the economy.
Skeptics have cautioned that the federal government may not uphold its commitment in the long run, leaving state taxpayers with the bill.
“The report tries to make it clear that working people are the ones who would gain — they are people we know, people who we really see every day. They deserve to get the coverage for the years they’ve worked,” said Dena Mottola Jaborska, organizing director for New Jersey Citizen Action, a nonprofit that advocates for healthcare access. She also is spokeswoman for New Jersey for Health Care, a coalition of 70 groups that support healthcare reform.
In addition to wondering whether the federal government can be trusted to continue to pay 90 percent of the costs of Medicaid expansion, state officials also expect that some residents – including additional children –would join the program after family members become eligible, raising costs for the state.
Mottola Jaborska said expansion advocates don’t see any good policy arguments against it, and reject the possibility that the state would have to pay for more than 10 percent of the newly eligible population. If the federal government backtracks on its commitment, then the state would be able to backtrack as well, she said.
She speculated that opposition stems from broader opposition toward the so-called social safety net.
“We don’t know what Gov. Christie’s position will be on Medicaid expansion but if he decides not to expand, it will be based on ideology,” she said.
Four residents who hold jobs and could benefit from Medicaid expansion participated in a conference call announcing the study. They reflected expansion supporters’ effort to put a face on the population that would benefit from broader Medicaid coverage.
“They are not poor people who are too lazy to get a job,” Mottola Jaborska said.
Rhiannon Anderson, a Highland Park resident who works at a pizza chain restaurant, received Medicaid coverage as a child – when she was a ward of the court – and when she first turned 18 and was working as a nanny and at a delicatessen.
Now 23, Anderson said she works 40 to 50 hours per week, earning enough so that she is no longer eligible but not enough to pay for healthcare. She said she has been unable to pay a $4,000 hospital bill for a six-hour stay due to an episode of depression and anxiety.
”I can’t pay it off with the job I’m working at, which is just above minimum wage,” she said. “Charity care may not always be enough. If people did have health insurance, I think people would be more likely to go to the doctor and live a healthy lifestyle instead of constantly getting sick.”
Castro said hospitals will be seriously affected if the state decides not to expand, since the federal government is cutting back on funding unreimbursed care, including its support for New Jersey’s charity care.
“It’s going to be the worst of possible worlds for the hospitals,” without expansion, he said.
Castro also said the state would be at a competitive disadvantage if it doesn’t expand eligibility, as states that do expand Medicaid will attract employers.
The argument was met by skepticism by Christine Stearns, vice president of health and legal issues for the New Jersey Business & Industry Association, the state’s largest employer organization.
Employers are focused on the affordability of insurance, she said.
“I would be interested to see what is the basis for that, if they have anything other than their belief,” Stearns said. “The affordability of overall healthcare is a prime concern for employers and to operate in the state and create jobs is a key factor that they take into consideration. It should be at the top of the list of concerns for policymakers, helping to make sure that people who have coverage now are able to continue to afford it. I haven’t seen anything to suggest that the Medicaid expansion would help make employer coverage more affordable in the state.”
Christie has said they he wants more information from the federal government before making a decision. He has joined other Republican governors in submitting a series of questions about both Medicaid expansion and health benefit exchanges to the U.S. Department of Health and Human Services.
While the federal government hasn’t given a deadline for states to make a decision, whether Christie provides startup costs in his 2013-2014 fiscal year budget, to be announced on Feb. 26, would be a strong indication of his plans. Castro said the state should already be planning to reach out to newly eligible residents if it is expanding.