$700,000 Income Earners: The New New Jersey Poor?
Posted April 4, 2008

Last week, we touched on State Senator Joseph Vitale’s (D-Middlesex) high-dollar proposal to establish universal health care in New Jersey. If the potential $1 billion-a-year plan was disturbing a week ago, the findings of two audits of the state’s Medicaid and NJ FamilyCare programs make the proposition downright alarming.

According to the AP’s Tom Hester, Jr., the audits “found shocking displays of wasted money” in our current state-run health care program. Among the findings Hester reports, the state:

• Paid $43.1 million to NJ FamilyCare participants without confirming their continued eligibility for the program;
• Spent $2.1 million on medical equipment that should have been funded by nursing facilities;
• Overspent $6.7 million on oxygen equipment rental and adult incontinence briefs purchase, and
• Failed to seek recovery of $4.6 million owed to NJ FamilyCare by 16,300 former beneficiaries.

Additionally, while both Medicaid and NJ FamilyCare are intended to provide health care assistance for the state’s poor and low income residents, the Bergen Record notes that “… NJ FamilyCare failed to check the eligibility for all of the program’s more than 204,402 enrollees, allowing 873 people with gross incomes of more than $85,000 to enroll…. In the most extreme instances, the three-year audit found three enrollees reported net gains of more than $700,000 on their 2006 state tax returns.”

According to the report issued by State Auditor Richard Fair, “Although beneficiaries authorize the Division of Taxation to release their tax returns to the NJFC program when signing their application, the division does not currently perform a computer match of all beneficiaries with state tax files.” In other words, the state isn’t even checking the tax files of all applicants to make sure they’re eligible(!), thus fostering the waste of untold amounts of state and federal money.

Commenting on the mess, Assistant State Auditor Stephen Eells stated in the Record, “The report speaks for itself. It just means that people lied [on their application], and [the department] didn’t do a match that was readily available to them.”

State Senator Vitale – the Chair of the Senate Health, Human Services and Senior Citizens Committee and the man who would have the New Jersey government oversee health care for all state residents – said, “Those who are found to be in violation and to be downright fraud [sic] should be prosecuted and the money returned to the state.” Others, like Assemblyman Richard Merkt (R-Morris), however, point to a bigger problem. “The audit’s findings are very troubling,” Merkt stated, “They call into serious question the state’s competence to run health insurance programs.”

Indeed, these recent findings are but another indication of the state’s utter incompetence when it comes to fiscal responsibility. The Record reports that NJ FamilyCare “costs roughly $535 million a year.”  If the state can’t take basic steps to monitor how it is spends and accounts for this money, it’s wishful thinking to imagine the state will be able responsibly to administer a universal healthcare program that might well cost double this.

Perhaps the best reflection on this fiasco, however, came from State Senator Loretta Weinberg (D-Teaneck), who is herself a supporter of expanded state-run healthcare. In words applicable to all too many recent fiscal scenarios in New Jersey, Weinberg said, “I’m surprised that I’m still surprised about anything that goes on in this state.”

Sadly, on this statement, we agree with the senator 100 percent.

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