The Star-Ledger

N.J. Plans To Seek Federal Approval To Reduce Parent Eligibility For FamilyCare Health Insurance

The Star-Ledger — Friday, April 29, 2011

By Jarrett Renshaw / Statehouse Bureau

TRENTON —New Jersey plans to seek federal approval to reduce the number of parents eligible for a popular health insurance program aimed at poor working families, officials of the Department of Human Services said today.

The decision to close the FamilyCare program to parents with a household income above the federal poverty level — about $18,530 annually for a family of three — is part of Gov. Chris Christie's plan to save $300 million by overhauling Medicaid, the officials said.

The state also plans to raise premiums and co-pays on FamilyCare participants, they said.

The proposal, announced by Jennifer Velez, the commissioner of Human Services, received a mixed response from lawmakers and advocacy groups.

"It's unacceptable," said State Sen. Joe Vitale (D-Middlesex), who helped bring the program to the state. "This is not about personal responsibility, this is about a single mother struggling to keep the lights on, and I am going to do all I can do to fight it."

Known nationally as the Children's Health Insurance Program, or CHIP, FamilyCare is a Medicaid-sponsored program for families who do not have access to affordable employer insurance, and can't afford the steep cost of private health insurance.

As of February, there were 916,476 people enrolled in the program, which included 668,315 children who would not lose coverage.

With the loss of federal stimulus funds and the state's poor financial situation, tough choices have to be made, state officials said.

"There are no easy solutions, but the comprehensive waiver framework outlines sound policy reform principles, which will allow New Jersey to manage the program benefits in accordance with budget resources," Nicole Brossoie, a spokeswoman for the Department of Human Services, said in a written statement.

Last year, the Christie administration froze entry into the program for parents who earned above 133 percent of the poverty level — $24,645 for a family of three — a move that did not require federal approval because the money came from the state.

As a result, nearly 50,000 residents were denied coverage, according to Ray Castro, a senior policy analyst with New Jersey Policy Perspective, a research organization. He said that under the new proposal about 90,000 people would be denied coverage.

"This was a bit of a surprise," Castro said. "We were told the waiver was about redesigning, not cutting, but this is a cut. I don't care how you slice it."

Critics say the freeze is not only bad news for struggling parents who will be left with few alternatives, but for their children as well.

"There are plenty of statistics and studies that show that parents who don't have health insurance are less apt to get insurance for the children, even when they're eligible," said Mary Coogan, assistant director at Advocates for Children of New Jersey.

The parents who are being denied access to FamilyCare will be eligible for insurance under the Affordable Care Act in a few years, with the federal government paying the full cost, Vitale said.

"Can't we wait and help people who are working hard, but can't afford insurance," he said.

In announcing the new proposal, Velez said the state planned to combine all of its Medicaid waivers into one global waiver. She said streamlining the system would result in significant savings while giving the state more flexibility to control costs.

Velez said the state will also seek to move more Medicaid recipients into managed care, and try other cost-saving measures suggested by advocates for the poor and disabled.

Lowell Arye, executive director of the Alliance for the Betterment of Citizens with Disabilities, who was briefed on the plan today, applauded the state's effort to retain programs by seeking more federal funds dollars and enacting administrative changes.

"It's a reasonable proposal, though we need more information," said Arye, who in the past has been a critic of the state's handling of Medicaid.

Overall, state officials said they expected to realize $540 million in Medicaid savings without cutting services or programs.

But Robert N. Davison, executive director of the Mental Health Association of Essex County, was dubious.

"I commend their efforts," Davison said, "but getting $540 million in savings without cutting services is the type of delusion only a bureaucrat can embrace."

Copyright 2011 The Star-Ledger

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