Pointing to ACA Success, NJ Plans to Reduce Hospital Charity Care Subsidies

New Jersey plans to reduce its charity care subsidies to hospitals because of high Obamacare enrollment.

By Brenda Flanagan

It boiled down to a debate over Obamacare. According to New Jersey’s Health Commissioner, so many people have gotten insurance coverage through the Affordable Care Act, the administration anticipates a dramatic 40 percent reduction in services to the uninsured and so it will slash charity care subsidies to New Jersey hospitals.

“As the number of uninsured patients declines significantly, this budget right-sizes our charity care subsidies,” said Health Commissioner Mary O’Dowd.

Assembly Democrats found that ironic.

“It’s almost fun to say, right? Gov. Christie — based on the impact of the Affordable Care Act, aka Obamacare, has reduced charity funding by $148 million,” said Assemblyman John McKeon.

But Democrats expressed alarm, noting these cuts could cost some hospitals almost 100 percent of their charity care subsidies. Of deepest concern — more than a million New Jersey residents remain uninsured.

“If you’re undocumented and you show up at a hospital, you still have to get treated under our law. So it’s still a huge concern. Again, urban hospitals take on a disproportionate amount of that, particularly because they have so many Medicaid patients,” McKeon said.

But the Health Commissioner says hospitals are getting even more money from Obamacare payments.

“Over the course of the last year, the hospitals have been benefiting from the fact that many of the individuals that they normally would’ve gotten subsidies for, through the charity care program, are getting routine payments from the Medicaid program now because they’re now insured. And so to actually not make a reduction in charity care this year would mean that we would be subsidizing hospitals more than they’re actually documenting in services provided,” O’Dowd said.

The Budget Committee also questioned funding for the New Jersey State Commission on Cancer Research. Out of $1 million granted last year, the state actually spent only $6,500, although the commissioner says it will be allocated. But the governor budgeted zero dollars for this year — that in a Big Pharma state struggling to improve its economy.

“I think there’s genuine frustration, again from an economic point of view, research and development in the prime area, industrial area that the state is looking to develop in, pharmaceuticals, etc. It just doesn’t make sense,” said Assemblyman Gary Schaer.

Talking economics, Republicans asked if the Health Department got calls from New Jersey small businesses complaining about Obamacare.

“Or actually their employees about loss of coverage and new coverages they have to obtain that are much higher with additional higher deductibles. I mean, these are middle class individuals,” said Assemblyman Christopher Brown.

Commissioner O’Dowd said her department wouldn’t get those calls.

So to answer the question, is Obamacare working? According to New Jersey’s Department of Health, it’s working well enough to justify cuts to charity care.