(TRENTON) – Aiming to help hospitals provide care to patients without insurance or who are unable to pay, Governor Phil Murphy today signed legislation sponsored by Assemblyman John McKeon (D-Essex, Morris) to increase the annual assessment on net written premiums received by health maintenance organizations (HMOs) to support charity care subsidies.
Under the new law (A-4722), the annual assessment of HMOs will increase from three to five percent. The assessment is statutorily allocated to provide charity care payments to hospitals. With this change, revenue for charity care subsidies is projected to increase by $102.7 million, of which 90 percent will be reimbursed by the federal government to make Medicare HMOS whole. Under State law, HMOs cannot impose additional premiums to policyholders to recoup the remaining ten percent.
Assemblyman McKeon released the following statement:
“New Jersey continues to grapple with the single greatest public health crisis in recent memory. A few short months ago, our hospitals were overwhelmed with patients battling a novel disease that in some cases required weeks of hospitalization. Not every patient had the ability to pay, but our hospitals didn’t turn them away in their time of need. Charity care makes it possible for healthcare professionals to fulfill our moral obligations to one another.
“There’s never been a more important time to give our charity care system much needed support. This law will ease the burden on hospitals, making it easier for them to provide care for all who need it.”