N.J. moves closer to universal health care

By Adrienne Lu

New Jersey took an important step this week toward becoming one of the first states with universal health care when lawmakers approved a bill expanding a health insurance program for low-income families.

Legislators trimmed funding in many areas of the budget this year after Gov. Corzine prescribed “cold-turkey therapy” for the state’s chronic overspending.

But they included $8.9 million in a bill that would require all children in the state to have health insurance and expand FamilyCare, the state health insurance program, to include more poor parents.

The measure won bipartisan support Monday, passing unanimously in the Senate and in the Assembly by a vote of 59-18. Corzine is expected to sign the bill into law.

“It’s the only way that literally hundreds of thousands of New Jerseyans who are uninsured will ever have access to affordable health insurance,” said Sen. Joseph Vitale (D., Middlesex), who championed the bill. “It’s a gateway to care that’s dependable and affordable and reliable.”

Nationally, the issue is a hot topic on the presidential campaign trail. Maine, Vermont and Massachusetts are the only states with some form of universal health care, although a dozen others are working on proposals.

In Pennsylvania, Gov. Rendell and Senate Republicans are pushing competing approaches to make more Pennsylvanians eligible for health insurance.

Rendell wants to expand coverage to an additional 275,000 residents. The plan would be open to small businesses and individuals with premiums paid on a sliding scale, based on income. Grants would be provided to help offset costs to businesses.

The cost of the program is expected to exceed $1 billion by the 2012-13 fiscal year, and would be paid for through the tobacco-settlement fund and other state and federal funding sources.

A competing plan from Senate Republicans would cover 500,000 uninsured people at a cost of $100 million that would be financed annually by existing revenue from a 25 cents-a-pack cigarette tax and traffic-ticket surcharges.

New Jersey’s path to universal health care is by no means set in stone. The legislature voted Monday on only the first phase of Vitale’s proposal. The initial phase is expected to be the least expensive and least controversial.

Phase one is expected to cost close to $29 million. Some of those costs would be covered by federal and state funds that are already allocated for health care but that are not being used, Vitale said.

“The governor is of the opinion that this is one of the most important things we’re taking on,” Corzine spokesman Jim Gardner said. “It’s his hope that the program is so successful that we will do a supplemental appropriation because it will mean more children are getting proper health care and we’ll be spending less on charity care.”

Those who believe they can’t afford the insurance premiums could apply for hardship exemptions.

The details of the second phase of the plan are still being worked out, Vitale said, but it would require all New Jerseyans to have some form of health insurance within three years.

Vitale argues that it would cost taxpayers less to insure the state’s 1.4 million uninsured residents than it does to pay for their care now in hospitals, where they frequently require expensive emergency-room care that earlier doctor visits might have prevented.

David Knowlton, president of the New Jersey Health Care Quality Institute, which advocates to improve the quality of patient care, led a team that worked with Vitale to come up with the proposal.

The team consulted more than 100 stakeholders, Knowlton said, and came up with three key goals for the state: to enroll the estimated 300,000 New Jerseyans who are qualified for Medicaid or FamilyCare but who are not enrolled; to reform the health-insurance market in New Jersey to make it more affordable, particularly for younger people who can help drive costs down for everyone; and to create an alternative for everyone else who remains uninsured.

The first phase of the Vitale proposal addresses the first two goals. Market reforms will include allowing health-insurance companies to charge based on age for people who buy their own insurance, which current rules do not allow.

The second phase would create a self-funded state-sponsored health plan for residents who don’t qualify for care under the other government health-insurance programs.

Residents would be required to show proof of health insurance when they file state tax forms and those who do not would be automatically enrolled in the plan and charged according to income.

Vitale and Knowlton estimate phase two would cost just under $1 billion, but they say that when it is fully implemented, the state would not need to subsidize care for the uninsured in hospitals because there would theoretically be no uninsured patients. (The hospitals say they would still care for non-U.S. citizens, whom the state plan would not cover.)

The state spent $605 million to subsidize $950 million in care for the uninsured at hospitals this year, according to the New Jersey Hospital Association.

Among critics of the Vitale plan is Assemblyman Jay Webber (R., Morris). He said the FamilyCare program was plagued by misspending and abuse, as documented recently in a review by the state auditor’s office. “The Democrats’ response to the discovery of this mismanagement seems to be: If it’s broke, let’s expand it,” Webber said. “I think we should fix it first.”

Webber is pitching an alternative bill, which would allow New Jerseyans to buy health insurance from out of state.

A wide variety of stakeholders have already jumped aboard at least the first phase of Vitale’s plan, however, ranging from insurance companies and hospitals to advocates for the poor.

Many have specific concerns, particularly about what the second phase of the proposal might look like.

But most seem to agree some sort of overhaul of the health-care system is needed.

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