This Opinion Editorial (Op-Ed), written by Star-Ledger Guest Columnist Suzanne Ianni, MPH, was distributed by nj.com on December 30, 2014 and updated on January 7, 2015.
After its first full year of operation, the Affordable Care Act (ACA) has attained some highly publicized successes. In New Jersey, the ACA has helped provide approximately 500,000 residents with health insurance, and the peace of mind that comes with that insurance.
But despite those successes, nearly 1 million of our residents remain uninsured, and many of the newly insured are covered under a system that does not fully reimburse hospitals for the treatment they provide. This is a looming issue with serious consequences for all New Jersey hospitals, especially safety nets.
The ACA is not a panacea for all problems of healthcare access and affordability. For New Jersey hospitals, recent articles that focus on the accomplishments of the ACA have obscured the continuing costs borne by hospitals to provide care to those without health insurance, those who remain underinsured, and those insured through Medicaid.
New Jersey’s 1 million uninsured represents 11.5% of our State’s population, according to a Robert Wood Johnson survey. Of those who have recently obtained some level of health insurance under the ACA, as of November 2014, more than 382,000 are new Medicaid beneficiaries.
Yes, New Jerseyans should be proud that our State expanded Medicaid to more people. The newly insured now have greater access to medical care and also seek care more regularly.
Studies have shown that patients with a Medicaid card are 35% more likely to use hospital outpatient services, 30% more likely to be admitted to a hospital, 60% more likely to have regular screening such as mammograms and 15-20% more likely to have their blood sugar and cholesterol monitored than when they were uninsured. While this increase in usage will improve health outcomes for New Jerseyans, it also places greater financial stress on our hospitals.
Medicaid payments to hospitals are substantially less than the cost of providing care. In fact, Medicaid payments in New Jersey only cover about 70 cents of every dollar it costs the hospital to treat Medicaid beneficiaries. So, while we rightly celebrate the successes of the ACA, it is important also to remember the significant increased financial burden New Jersey hospitals face.
When someone is sick or injured, being treated at a hospital is a right under New Jersey law, regardless of ability to pay, or in the case of Medicaid, regardless of the fact that hospitals are not fully paid for the care provided. That is a moral policy enacted by decent people and supported by New Jersey hospitals. But our hospitals cannot provide this care without financial support.
New Jersey must recognize the unique mission of its hospitals, and maintain or increase its reimbursement to them. Last year, New Jersey hospitals received $650 million in Charity Care funding. These payments are not a handout. They are payments for medical treatment provided by hospitals to New Jersey residents.
Charity Care is a federal and state funded program. “Medicaid Disproportionate Share” programs, like Charity Care, are intended to provide assistance to hospitals that bear the socially important, but heavy financial burden, of providing care to Medicaid patients and the uninsured.
Our hospitals provide leading-edge care whenever we need it, but we must not take them for granted. New Jersey must continue to reimburse hospitals through the Charity Care program at current levels. Given the many financial problems our State continues to face, we should not add a hospital crisis to that mix.
Suzanne Ianni is President and CEO of the Hospital Alliance of New Jersey, which advocates for urban and teaching hospitals.