NJ health plan may need more cash

June 26, 2008 11:44:38 AM PDT
New Jersey Gov. Jon S. Corzine has been trying to cut government spending, but there's one program he wouldn't mind throwing money at - expanding a state-run health program to include more poor parents and ensure every child has health insurance. Corzine may get that chance.

The cash-strapped state has budgeted $8 million to start the program in September, raising questions about whether it would have enough money to successfully implement the plan viewed as the first step toward requiring all New Jerseyans to have insurance by 2011.

"We put our best estimate down," Corzine said of the $8 million included in the $32.8 billion budget plan he's expected to sign before Tuesday.

But, he added, "I think it's highly uncertain where we'll be."

Still, the Democratic governor said it wouldn't be a bad thing if the state has to scramble to find more money to keep the program going.

The plan mandates all New Jersey children have health insurance through government or private insurance. It would also expand a state-run health program for the poor to include more parents.

That program provides free or low-cost health care, immunizations, hospitalization, lab tests, X-rays, prescription drugs and dental and mental health services to 122,525 children and 89,050 adults. It costs $535 million per year.

Parents can join if, for instance, they come from a family of four that makes up to $27,645.

Under the new plan that would be increased to $42,400.

About 1.5 million New Jerseyans lack health insurance, or about one in seven residents. Of those 1.5 million, about 275,000 are children.

"These are kids who have to wait until they're very seriously ill or hurt before they can go to the hospital to have access to care," said Sen. Joseph Vitale, D-Middlesex, who developed the plan. "As a moral society, we cannot turn our backs on the plight of these kids."

But some question whether the state has the ability and money to implement the program, noting costs are soaring under Massachusetts' universal health care plan. Lawmakers there are weighing increasing the cigarette tax.

In 2006, a Massachusetts legislative committee estimated the law would cost $725 million in the fiscal year starting in July, but the state is now eyeing having to spend $869 million, with many acknowledging costs will rise even higher.

Assemblyman Jay Webber, R-Morris, sees the same thing happening in New Jersey.

"This bill not only compounds the problems with our health care, but it lacks dedicated funding to support it," Webber said. "The money to pay for the expanded program is not included in the budget, representing yet another example of irresponsible spending."

Corzine thinks otherwise.

He concedes adjustments may be needed, but said extra money could be found in budget surpluses, savings found through more efficient government operations and, potentially, less money needed to help hospitals pay for treating uninsured patients.

"We're going to push on this," Corzine said. "This is absolutely one of the most important things we're taking on."

Vitale, the Senate health chairman, said studies show preventive care costs less than emergency care, so he's hopeful the state can get better results for less money.

"This is a bill whose time has come in New Jersey," Vitale said. "We cannot afford the status quo, and we need to spend health care dollars smarter to make the most of our state's health investment."

Plans by the state's largest insurer, Horizon Blue Cross Blue Shield of New Jersey, to possibly convert into a for-profit company could also bring the state billions for health care needs. The company would have to pay the state back tax breaks it's received as a nonprofit, but supporters of the plan said they're not counting on that money.