Credit: (NJ Spotlight News)With Medicaid funding set to be cut dramatically in the Republican-led Congress, Democratic members have tried to focus on the impact spending cuts would have on patients like Sasha, a girl with cerebral palsy from central New Jersey, who on Tuesday told a Congressional committee the program providers for her “health, independence and dignity.”
Medicaid, the state and federally funded health insurance for some 1.9 million New Jersey residents, also serves as a lifeline for hospitals, particularly those in low-income communities. Gov. Phil Murphy’s budget proposal for the year that begins July 1 – which state lawmakers must finalize and approve before then – calls for more than $3.5 billion in hospital aid, funneled to the state’s 70 acute-care facilities through various programs, several of which are tied to Medicaid.
Starting in 2018, the state enabled hospitals and nursing homes in a dozen counties with high health-care costs to collect a fee on admissions. The funds collected by these fees paid by patients and nursing residents are then used by the state to generate a federal match through the Medicaid program, more than doubling its investment in these facilities. In the current budget this ‘county-option’ program is slated to provide nearly $1 billion and Murphy anticipates it will generate $2.4 billion in the fiscal year that begins in July, budget documents show.
Republicans in Congress have proposed legislation that would eliminate more than $880 billion from the Medicaid program over the next decade to free up funding for tax cuts promised by President Donald Trump. Among the changes under discussion is a measure to curb how states use fee-based revenue programs like New Jersey’s county option initiative, according to a draft of the bill under discussion Tuesday.
New Jersey has also restructured how it assists hospitals that treat high numbers of uninsured patients in recent years. The state has shifted from its focus on the charity care program, which reimburses facilities based on a percentage of their uncompensated care, to a growing reliance on Medicaid, which allows hospitals to collect more for outpatient care. While charity care generates a 50% match from the federal government, New Jersey can collect closer to 66% on Medicaid dollars.
For the fiscal year that begins in July, Murphy is expecting hospitals to share in more than $605 million in state and federal aid. Of that total, some $61.3 million is payments to hospitals for charity care expenses and nearly $543.8 million in the Medicaid outpatient payment program. The allocations are based on formulas that account for hospitals’ payer mix, or the percentage of patients they treat who have Medicaid or lack insurance entirely.
A detailed list of the proposed funding allocations is here:
Editor’s note: This graphic has been updated with the correct proposed funding allocations.
