In Healthcare, Murphy’s Budget Choices Emphasize Medicaid, Opioid Addiction

Few details available on allocation of some money, and confusion about whether certain funding is really new

Credit: Jim Connolly
Senate Majority Leader Loretta Weinberg
Hospitals and addiction programs are slated to receive at least $800 million in public support next year under Gov. Phil Murphy’s first budget. But many questions remain about how these funds would be allocated and whether the drug-treatment dollars involve new spending or just a reshuffling of existing resources.

In his budget speech yesterday, Murphy highlighted his commitment to women’s healthcare and backed a controversial Democratic bill to reduce the impact of out-of-network health insurance bills, which he said could help cut healthcare costs for state workers. The measure, sponsored by Sen. Joseph Vitale and Assembly Speaker Craig Coughlin (both D-Middlesex), has been debated for nearly a decade.

Murphy also reiterated his commitment to protecting Medicaid, given ongoing federal efforts to scale it back through changes to the Affordable Care Act, and he called for adding $244 million to FamilyCare, as Medicaid is known in New Jersey. FamilyCare, which is slated to cost $4.4 billion in state funds next fiscal year and an estimated $10 billion in federal dollars, now covers 1.8 million Garden State residents.

“We took action to ensure as many people as possible have access to affordable, comprehensive health insurance, and directed our state agencies to educate more New Jerseyans on the options available to them under the Affordable Care Act. I look forward to working with all of you to fight against continued assaults from Washington,” Murphy told a joint session of the state Legislature at the State House in Trenton.

Lukewarm response

The Legislature must still approve the
$37.4 billion proposal for fiscal year 2019, which starts in July. Democrats, who control both houses, initially gave it a lukewarm response, promising to review the package, and Republicans blasted the tax hikes involved.

But the Democratic governor, who took office in January, barely mentioned the opioid epidemic — a topic that dominated the last year of former Gov. Chris Christie’s second term — and his staff was unable to explain how the $100 million he included for the Division of Mental Health and Addiction Services would be spent. Officials could also not say if this was new money or a reassignment of existing money; Murphy’s budget identified three areas of reductions to current opioid spending that totaled more than $102 million, but no additional detail was made available yesterday.

“We will substantially invest in both preventative and treatment programs that will combat an opioid epidemic that has ravaged communities across our state,” Murphy said in his speech, one of only two times he mentioned opiate addiction. (The other, in which he noted the opioid epidemic has been “devastating our urban centers long before it made headlines,” received a rare standing ovation.)

In addition, Murphy made no mention of hospitals, even though acute-care facilities are set to get significant sums — albeit at the same level these line items were funded under Christie for this year. Charity Care, which helps hospitals pay for uninsured patients, is budgeted at $252 million, Graduate Medical Education aid is to get $218 million, and another $166.6 million is allocated to encourage reforms at hospitals and other long-term care facilities.

Hospitals give thanks

Hospital leaders thanked the governor for his support, although advocates for safety-net facilities noted that Charity Care had been cut significantly in recent years, in part because costs have declined as more patients have received coverage under the ACA, or Obamacare. In 2015, Christie budgeted $650 million for this hospital-aid program alone, dollars that are allocated by formula to most of the state’s 72 acute-care facilities.

“But good health is not just clinical care — now more than ever it’s about what’s occurring in our communities,” added the New Jersey Hospital Association, the industry trade group. “We applaud the Governor’s commitment of $100 million to fight the state’s opioid crisis and additional budget items that support good health not just in our facilities but in the communities where we live, work and play.”

Debra Wentz, president and CEO of the New Jersey Association of Mental Health and Addiction Agencies, which represents community providers, urged the administration in general to invest more in local caregivers by increasing reimbursement rates for key services, adding capacity, and expanding early-intervention programs. “Investing sufficiently in community-based services is the right thing to do for the state’s fiscal viability, as well as the health and well-being of New Jersey residents,” Wentz said.

When compared to current spending, the state Department of Health — which now includes DMHAS, after Christie shifted it from the Department of Human Services last year in a controversial agency reform — would see its budget rise 0.4 percent, or $6 million, to a total of $1.52 billion in state funding under Murphy’s FY19 plan. Another $1.34 billion in federal and other dollars would also be allocated to DOH programs.

Human Services, the state’s largest department, would get an extra $220 million, or 3.8 percent, for a total of $5.96 billion in state funds next year. The DHS is also slated to receive nearly $12 billion more from the federal government and other sources, much of which is tied to the Medicaid program.

Women’s services

One item that received significant attention yesterday was Murphy’s pledge to restore funding for women’s healthcare services with a $7.5 million allocation for services at Planned Parenthood and other community clinics. (The money is prohibited from being used for abortions.) This comes on top of $7.5 million the governor committed for the current year, in his first bill-signing last month. Christie had suspended what had become an annual line item for women’s care during his tenure, prompting an outcry from healthcare advocates and Democratic leaders.

“We will live up to our promise of providing $7.5 million for women’s health care. “Cutting access to primary care, critical health screenings, and family planning services to tens of thousands wasn’t fair and it certainly didn’t make us stronger. We reversed this, and we will keep our word,” Murphy said, praising Senate Majority Leader Loretta Weinberg for her leadership on this issue.

“He wouldn’t have walked off that platform if he didn’t include that,” Weinberg joked after the speech.