The ramifications of the House Republican proposal to overhaul the Affordable Care Act are widespread, but changes to the federal Medicaid program could have a particularly detrimental effect on New Jersey’s budget, as well as its residents.
Because the state opted into Obamacare’s Medicaid expansion, an additional 553,000 low-income adults are insured in the state. These adults earn up to 133 percent of the federal poverty level, or a maximum income of $1,387 per month for a single person, or $2,349 for a family of three. Their addition to the New Jersey FamilyCare insurance program, the name for the state’s Medicaid program, led to a 36 percent increase in the total number of people covered by Family Care between February 2013, prior to the 2014 expansion, and last month, an analysis of NJ Department of Human Services data shows.
In total, 1.77 million New Jersey children and adults, with and without disabilities, were covered by FamilyCare last month. Currently, more than three of every 10 people enrolled got their coverage because of the expansion. (Read what a panel of healthcare experts have to say about the Republican plan; follow this link.)
The Republican plan, known as the American Health Care Act, unveiled earlier this week, would make some significant changes to the Medicaid program that would likely lead to New Jersey getting less money and having fewer people covered. While the legislation would continue to cover the expansion through January 1, 2020, it would then freeze it at 2016 funding levels per enrollee and cut the amount of federal funding from 90 percent of costs to about half, making it much more expensive for New Jersey and other states to fund.
An analysis by New Jersey Policy Perspective, a progressive think tank, done prior to the AHCA’s introduction estimated that a total repeal of Obamacare would cost the state $3 billion a year in Medicaid expansion funds. Raymond Castro, a senior policy analyst, said he is still working to calculate the impact of the GOP’s current proposal, but he is certain it will wind up costing the state and residents. He predicted the changes in the expansion will lead to a “drastic reduction in federal funds,” as well as a reduction in the number of people covered by it.
The cost doesn’t end there. If people drop off the Medicaid rolls and become uninsured, they will likely wind up as charity-care patients when they get sick. Over the past three years, Gov. Chris Christie has cut the amount the state pays hospitals for providing charity care by about $373 million, citing a decline in charity-care cases due to the increase in those covered by Medicaid, and he has recommended another cut of $50 million in the coming budget.
Betsy Ryan, president and CEO of the New Jersey Hospital Association, said in a blog post earlier this week that the cuts in charity-care reimbursement and the proposed changes to Medicaid endanger the future of hospitals.
“President Trump had assured the country that no one would lose coverage under his plan, but this proposal does not provide that guarantee,” she wrote. “The proposal to change Medicaid from a federal-state partnership to a program that simply provides per-capita lump sum payments to the states raises serious worries … Medicaid beneficiaries have access to a primary-care doctor and preventive care under ACA coverage. It would be a very harmful step backward if a portion of those New Jersey residents lose coverage and return to the days when they used the hospital emergency room for all of their healthcare. That’s not good for those New Jersey residents, and it’s just not a smart way to deliver healthcare services.”
Nicole Brossoie, a DHS spokeswoman, declined to comment on the HCA proposal, saying the department does not comment on draft or pending legislation.
The DHS’s reports on FamilyCare, including the Medicaid expansion, show that substantial numbers of people in every county benefitted as a result of that provision of the ACA.
Essex County has the most people covered by the Medicaid expansion, 71,382. But the program has had the biggest proportional impact in wealthy Hunterdon County, where the number of people receiving free or low-cost government health care through New Jersey FamilyCare last month was 64 percent higher than in February 2013. The percentage of those on the FamilyCare rolls who receive insurance due to the expansion range from a little more than 25 percent in Cumberland County to nearly 37 percent in Sussex.