Insurance & Financial Advisor

Senator Crafting Plan To Provide Health Insurance To All New Jersey Residents

Insurance & Financial Advisor — Thursday, March 13, 2008

By Molly Greeley

New Jersey state Sen. Joseph F. Vitale is crafting a health insurance proposal to provide coverage to all uninsured New Jersey residents.

The Democrat's plan looks to "cover the uninsured with a product that is affordable and portable," according to his Web site dedicated to the plan. The cost to cover uninsured individuals under the state-sponsored plan would be $1.7 billion, Mercer Government Human Services Consulting estimated.

Vitale, who represents Woodbridge, N.J., said in his Web posting that "the framework has been established and the details are now being refined" for the plan.

Under the plan, those eligible for Medicaid or New Jersey FamilyCare will be enrolled, and those residents who currently receive coverage from an employer will continue to do so. All other residents would be required to enroll in a state-sponsored commercial insurance plan, whose premiums would be subsidized based on household income, according to the proposal's framework.

The plan's cost could prove to be problematic, with a projected $3 billion state budget deficit looming.

However, Vitale, who chairs the Senate Health, Human Services and Senior Citizens committee, said less money would need to be invested in the Charity Care Program, which is meant to lessen hospitals' financial burden when they meet "their legal obligation to turn away no one regardless of their ability to pay."

Eve Weissman of the citizen watchdog coalition New Jersey Citizen Action agrees that funds currently allocated to Charity Care are possible sources of funding for the plan. If everyone had health insurance, less money would be spent on reimbursing hospitals on emergency care for the uninsured.

Weissman said she still sees potential difficulties in getting Vitale's plan passed once the details are ironed out and the legislation is officially introduced.

"Other states trying to pass similar legislation have faced significant hurdles," Weissman said. "It's challenging on multiple levels, and New Jersey sees its own challenges, with a looming budget deficit. I go to these meetings that talk about fiscal restructuring, and a big sentiment seems to be wanting to cut back government. I'm unclear whether people really understand the ramifications of that kind of restructuring."

Under the senator's plan, non-citizens would not be eligible for subsidized insurance, and "citizens who are homeless or transient, even with the best efforts, are difficult to reach and will likely remain uninsured," according to the framework. Hospitals would continue to provide emergency care to such individuals, referring them to free clinics for non-emergency care, according to the plan's Web site.

Vitale's plan could potentially reduce the cost of individual health insurance by 75% by requiring comprehensive statewide provider networks of commercial insurers, as well as requiring employers that do not offer health insurance to establish flexible spending accounts, which would allow employees to get insurance using pre-tax dollars.

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