Explainer: Who Is Helped by New Jersey’s Charity Care Program?

Despite Medicaid expansion, there are some 1.1 million NJ residents -- including more than 100,00 kids under the age of 18 -- who have no health insurance

charity care
For decades, funding for the Charity Care program has been a target of intense debate during annual budget negotiations. For the fiscal year 2017 budget that took effect Friday, Gov. Chris Christie approved $302 million — equal parts state and federal dollars — for the New Jersey Hospital Care Payment Assistance Program, as Charity Care is officially known, to help hospitals statewide cover the costs of providing necessary medical treatment to the underinsured or uninsured patients they are legally required to assist.

(Originally proposed at $352 million, Christie trimmed $50 million from Charity Care when revenue projections dipped in May; Democrats restored the extra funding in their own spending plan, introduced in late June, but the governor slashed it back again when he signed the budget and vetoed certain line items late Thursday.)

Hospitals are allotted their share of the charity-care pie based on a complex and controversial formula that takes into account their volume of “uncompensated care,” as the costs for these patients are known; the economic stability of the surrounding community; and other factors. Based on details released late Friday, payments for the coming year are slated to range from $2,322 for Memorial Hospital in Salem County to more than $46 million for St. Joseph’s Regional Medical Center, in Paterson.

Who are the patients behind these costs? Residents of all ages and backgrounds, some who have major medical coverage, or partial health insurance, or no plan at all. In order to be considered for charity care, they must meet strict income and asset guidelines, prove they live in New Jersey, and not be eligible for other government-sponsored insurance programs, like Medicaid or New Jersey FamilyCare. Hospital officials work with patients to compile the documentation they need to receive charity care, but not all patients have the paperwork, leaving hospitals to write off the costs of treating those they can’t prove qualify for this or other government programs.

Charity-care dollars do not go to the patient directly, but are used to reimburse the hospital for charges it incurred in previous years. (For example, 2016 payments are based largely on 2014 claims data.) The fund is for necessary medical treatments only; some services such as physician fees, anesthesiology fees, radiology interpretation, and outpatient prescriptions are separate from hospital charges and may not be eligible for reduction.

The number of individuals who benefit from charity care is hard to calculate. State reports show that the volume of uncompensated care has shrunk significantly in recent years, in part because of the success the Medicaid expansion that came with the federal Affordable Care Act, which added nearly 700,000 more New Jersey residents to the health insurance rolls. As a result, Christie has trimmed some $300 million from the charity-care pool since 2015.

But estimates from the U.S. Census Bureau, released in 2014, suggest there are still nearly 1.1 million New Jersey residents — or 12.5 percent of the state’s population — without any health insurance. This includes more than 100,000 youngsters under age 18. The vast majority consider themselves part of the workforce, even if they haven’t had a job in the past year, but for many the cost of a comprehensive policy was still out of reach.

Hospital officials also underscore the need to consider undocumented immigrants, who account for a significant portion of many facilities charity-care expenses. According to the Migration Policy Institute, an advocacy organization that tracks immigration trends, New Jersey is home to some 509,000 undocumented immigrants, including more than 168,000 children. Other estimates are higher. Citizenship is not technically required for patients to be counted towards a hospital’s charity-care tab, as long as they can prove they live in New Jersey.

Patients are eligible for charity-care benefits according to a sliding scale that takes into account their existing level of insurance coverage and annual earnings. If patients earn less than 200 percent of the federal poverty level determined by the Department of Health and Human Services — less than $50,000 annually for a family of four — they can qualify for full charity care to cover their entire bill. Incomes between 200 percent and 300 percent are eligible for benefits on a sliding scale, with the balance to be paid out of pocket. (The HHS poverty line for 2016 is $24,300 for a four-person family or $16,020 for a parent and child.)

In addition, patients must have less than $7,500 in other assets as an individual, or $15,000 per family, to qualify for charity care coverage. Hospital administrators will help patients compile the documentation they need to demonstrate their eligibility and the state Department of Health maintains a hotline for questions during business hours: the Health Care for the Uninsured Program can be reached at 1-866-588-5696.