New Jersey Newsroom

Proponents Claim New Jersey To Get Big Financial Boost From Health Care Reform

They say New Jersey would receive $30.3 billion between 2014 and '19

New Jersey Newsroom — Monday, March 29, 2010


A report made public Monday by Health Care for America Now — the nation's largest pro health care campaign — maintains that federal health care reform will provide New Jersey a $28 billion increase in federal aid for health care costs between 2014 and 2019.

The governments of the 50 states will receive a total of $900.8 billion in new federal funds between 2010 and 2019, with $473 billion allocated to help families afford private health insurance coverage and $427 billion to supplement state Medicaid programs, according to a state-by-state analysis of the new health care legislation.

The second of two health reform bills just passed — the Reconciliation Act of 2010 — will provide an additional $51.5 billion in federal support for health insurance coverage beyond that provided in the Senate health care bill alone.

For New Jersey, that means $13.5 billion in additional aid for Medicaid and $12.5 billion for subsidies between 2014 and 2019, according to the report.

"We are paving a path for economic recovery here in New Jersey, and enactment of comprehensive health care reform is an integral part of helping us relieve the tremendous and growing pressures from the uninsured," said Adam Sherman, Central Jersey Organizer from New Jersey Citizen Action.

"With reform, New Jersey will see a dramatic reduction in the number of uninsured over time, and immediately with the passage of the jobs bills, we will receive new funds that will help relieve the budgetary burdens we're struggling with today. This report proves the stimulus bill, the jobs bill, and comprehensive health care reform are the right prescription for relieving growing state budget pressures — including New Jersey's — over the next decade."

In return for the new injection of money, on average, states will be required to provide a match estimated to equal only 2.2 percent of the new federal funds. In comparison, nationally, states customarily match federal Medicaid dollars at an average rate of about 43 percent.

With reform legislation, for low- and moderate-income residents receiving assistance for private health insurance coverage, no state match is required. For residents gaining health insurance coverage under the expanded Medicaid eligibility, the federal contribution for these costs will be 100 percent in the initial years of 2014, 2015, and 2016 and will be set at 90 percent for 2019 and beyond.

How much each state receives will depend on the number of people eligible for Medicaid and the number of people who qualify for private health insurance subsidies.

For instance, according to the report, from 2010 to 2019, health reform will direct $90.1 billion to Texas, the state with the highest uninsured rate, and $1.7 billion to Wyoming, the least populous state.

The revised report titled "Federal Health Reform Provides Critical Long-Term Help to States, Reconciliation Update" also takes a look at the $87.7 billion currently flowing to the states through the American Recovery and Reinvestment Act of 2009 and the additional relief provided by the House- and Senate-passed jobs bills now pending final action by Congress.

In New Jersey, the stimulus bill will provide a total of $1.4 billion this year to relieve state Medicaid costs. The additional pending jobs bill, if finalized by Congress, will provide an additional $613 million that will flow to New Jersey in 2011. Together, the two pieces of legislation could save the state government a total of 2.9 billion from 2009 through 2011.

These two short-term sources of federal funding — together with health care reform — would inject a total of $1.05 trillion in federal assistance into state economies over 10 years and result in a net reduction in state Medicaid spending of $91.2 billion over the 2009 to 2019 period. New Jersey would receive a total $30.3 billion in federal funds over this period.

The report can be read here.

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