"Affordable" Health Care Will Cost the State a Bundle
Posted July 10, 2008

As the state continues to reel under a monumental debt load, Governor Corzine signed legislation on Tuesday that will dramatically expand New Jersey’s state-run (and, ergo, taxpayer funded) health care program. According to the Bergen Record, “The bill’s sponsors see it as the first step toward universal health coverage in New Jersey….”

The bill (S1557/A2624) extends eligibility for NJ FamilyCare to parents earning 200 percent of the federal poverty level or, in real dollars, $28,000 for two-member households up to $56,800 for six-member households. This is an increase from the current eligibility cap of 133 percent of the federal poverty level, or approximately $28,000 for a family of four.

Additionally, the new law mandates that all children 18 years of age or younger have heath insurance either through a private carrier or through one of several state programs (i.e. Medicaid, FamilyCare or the FamilyCare buy-in program). As the governor’s office explained in a press release last December, the buy-in program allows children in families with incomes greater than the eligibility limit to enroll in the program. Families pay out-of-pocket monthly premiums that are “significantly lower than private health insurance premiums.” As a condition of participation in the program, families must enroll all children and must be able to show that the children were without health care coverage for the previous six months.

As the Atlantic City Press reports, the bill also:

1. “Requires hospitals to bill FamilyCare, rather than Charity Care, for emergency room visits for people younger than 19.
2. “Revises rating system for individual plans, in an attempt to make plans more affordable for younger people.
3. “Allows insurers to offer fewer plans to individuals and small employers, while requiring greater marketing of individual policies.
4. “Revises eligibility, terms and administration of coverage to dependents younger than 30 while requiring proof of previous coverage to continue coverage under FamilyCare.
5. “Expands marketing and promotion of FamilyCare and its elements.”

Bill sponsor Senator Joseph Vitale (D, Middlesex), Deputy Majority Leader and Chair of the Senate Health, Human Services and Senior Citizens Committee praised the passage of the law, stating, “New Jersey is taking a dramatic step forward in ensuring that quality health care is a fundamental right – not a privilege – for all state residents.”

Of course, we question the basis of Senator Vitale’s statement, as neither the New Jersey State Constitution of 1947 nor the original New Jersey Constitution of 1776 contain any allusion to a so called “right” to health care. (Neither, incidentally, does the United States Constitution.)

Legal precedents, which obviously have little bearing on Trenton, aside, many are concerned over increased costs to the state that the law will produce. As MyCentralJersey.com (the new website of the Home News Tribune and the Courier News) reports, the new state budget contains $8.9 million to fund the start-up of the program. Once this is exhausted, however, where will the state find funds to run the program?

In Massachusetts, where the state’s health mandate just reached its one-year anniversary, costs have already exceeded expectations. USA Today reports,

Most of the newly insured are lower-income residents who quality for low- or no-cost coverage through the state, and there were more uninsured than the state anticipated. Both factors pushed costs to $625 million the first year, up from an estimate of $472 million, according to figures from the state agency overseeing the program.

Indeed, the article adds, “In the fiscal year that starts Tuesday [July 1, 2008], the governor has requested $869 million for the program, up from the 2006 estimate of $725 million.

Here in New Jersey, MyCentralJersey.com notes, “The projected annual cost of the program within three years is expected to reach $68 million, according to the Department of Human Services.” If Massachusetts (or most other government programs for that matter) is any indication, actual costs will exceed estimates.

Where does the state intend to get this money? The state government – like any government entity in this country – cannot generate revenue on its own. Anything it gives to the people it must first take from the people in one form or another. And healthcare is no exception. Instead of increasing state spending, Trenton should have focused on initiatives such as cracking down on the frivolous lawsuits that so often drive up the costs of healthcare in the first place.

Don’t be fooled. The NJ FamilyCare bill will prove to be yet another “reason” for Trenton to hike taxes.

 

 

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