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Oliver & Prieto Bill to Expand Medicaid Coverage for Hundreds of Thousands of Low Income Residents Gets Final Legislative OK

Feds to Cover Majority of the Cost Under Affordable Care Act

Legislation sponsored by Assembly Speaker Sheila Y. Oliver and Assembly Budget Committee Chair Vincent Prieto that would expand Medicaid coverage for some of New Jersey’s poorest residents received final legislative approval 46-32 by the General Assembly on Monday.

“Studies have shown that states that have expanded their Medicaid coverage over the last decade have vastly improved their mortality rates and overall public health,” said Oliver (D-Essex/Passaic). “With the help of the Affordable Care Act, we have the opportunity to improve the lives of hundreds of thousands of low-income New Jerseyans at a relatively small cost to our state.”

Specifically, the bill (A-4233) would increase the Medicaid income eligibility limit to 133 percent of the federal poverty level (FPL) for all non-elderly adult citizens and legal residents in New Jersey, effective January 1, 2014, pursuant to the Medicaid expansion authorized under the federal Patient Protection and Affordable Care Act.

In terms of 2013 annual gross income, 133 percent of the FPL is $15,282 for a single person, $20,628 for a family of two, and $31,322 for a family of four.

“This is a sound financial investment that will dramatically improve the health and well being of low-income residents struggling with little to no insurance,” said Prieto (D-Bergen/Hudson). “Doing so will help us boost preventative care, improve mortality rates, reduce the number of uninsured hospital visits and lessen the state’s expense to help offset these visits.”

Enactment of the bill will:

  • Enable New Jersey to qualify for the enhanced federal match provided under the Affordable Care Act Medicaid expansion. The federal match for state funds expended on newly eligible persons under the Medicaid expansion will: be 100 percent from 2014 through 2016; 95 percent in 2017, 94 percent in 2018, 93 percent in 2019, and 90 percent in 2020; and remain at 90 percent in subsequent years;
  • Provide New Jersey with the opportunity to reduce the amount of uncompensated care provided by hospitals for uninsured patients and thereby lessen the amount expended by the state on charity care subsidy payments to hospitals; and
  • Ensure that New Jersey receives the federal Medicaid funds to which it is entitled under the Affordable Care Act, so that New Jersey taxpayers are not simply paying to meet the Medicaid expansion costs incurred by the federal government in other states.

According to an August 2011 report by the Rutgers Center for State Health Policy, if New Jersey were to increase its Medicaid income eligibility limit to 133 percent of the FPL, Medicaid would expand from covering 13.6 percent to 16.7 percent of the non-elderly population in the state. This would increase the Medicaid-eligible population in New Jersey by approximately 234,000 persons, of whom some 132,000 would be non-parent adults and some 102,000 would be children under 19 years of age.

A recent study published in The New England Journal of Medicine concluded that State Medicaid expansions to cover low-income adults were significantly associated with reduced mortality, improved coverage, access to care, and self-reported health. The researchers found a 6.1 percent reduction in mortality among low-income adults between 20 and 64 years of age in three states that substantially expanded adult Medicaid eligibility since 2000 (Maine, New York, and Arizona), compared with similar adults in four neighboring states that did not do so (New Hampshire, Pennsylvania, Nevada, and New Mexico).

The measure now heads to the Governor’s desk for consideration.