Press of Atlantic City
By Derek Harper

State health officials are seeking federal approval to significantly change the way New Jersey handles Medicaid, as Gov. Chris Christie’s administration looks to save $300 million on the health care program for low-income and disabled residents.

The conceptual proposal, which state officials said they would formally seek approval for in July, was met with mixed reactions from health care officials.

“There remain a lot of unanswered questions and we so need to see more detail before we can get a handle on some of the potential impacts,” New Jersey Hospital Association spokeswoman Kerry McKean Kelly said.

She pointed out that the proposal comes at a time when recent federal health care legislation will mean major changes in coming years.

“I don’t know if anyone can predict where it will all end up,” Kelly said.

The New Jersey proposal would sharply reduce the income threshold needed for new enrollees to qualify for Medicaid, dropping that from 133 percent of the federal poverty threshold to between 25 and 30 percent.

For a family of three, that translates into lowering the yearly income eligibility ceiling from $24,645 to between $4,633 and $5,559, and from $39,887 to between $7,498 and $8,997 for a family of six.

If approved by the Obama administration, the change would affect only new applicants, leaving everyone currently receiving health benefits untouched.

Department of Human Services spokesperson Nicole Brossoie said what she termed “freezing enrollment” was “an initiative that has been utilized in previous budget years to contain Medicaid costs and preserve entitlement benefits for the most vulnerable residents — children, seniors and people with disabilities.”

State officials have said they estimated the changes would result in about 23,000 fewer people enrolling in Medicaid and FamilyCare, the state-run program for people who earn somewhat more than Medicaid limits.

As of April 2011, 245,268 adults and 674,094 children are enrolled in either Medicaid or FamilyCare, DHS Commissioner Jennifer Velez’s budget testimony shows. Locally, that includes 39,141 adults and 105,132 children in Atlantic, Cape May, Cumberland and Ocean counties.

Democrats and liberal organizations attacked the proposal. Assemblyman John J. Burzichelli, D-Cumberland, Salem, Gloucester, on Friday called the proposal to lower the threshold “pennywise and pound-foolish.”

“The income threshold essentially shuts the program down to a large group of people who need it,” said Burzichelli, a member of the Assembly budget committee. He said he expected it would drive up the cost of Charity Care Assistance, the state program for low-income residents that assists with the cost of hospital care.

Raymond Castro, a senior policy analyst for the liberal-leaning think-tank New Jersey Policy perspective, said the new levels meant an uninsured parent working part-time at a minimum-wage job wouldn’t be eligible for health insurance through Family Care. He wrote, “This creates a disincentive for parents who want to play by the rules and work to support their family.”

While the eligibility threshold has attracted the most attention, the state is also proposing imposing a $25 co-payment for Medicaid recipients who use emergency room visits improperly, as well as enhancing programs that aid people with premiums with the goal of ensuring Medicaid is the program of last resort.

Other goals include consolidating different programs, promoting home- and community-based services and attempting new pilot programs.

Kelly said the hospital association was glad to hear talk of expanded Medicaid payments to doctors, as low payments have meant a growing number of physicians rejecting Medicaid patients.