Universal health insurance plan is in the works in New Jersey

TRENTON - Declaring that public health costs are out of control, New Jersey has joined a growing number of states - including Pennsylvania - that are hammering out plans for universal health insurance.

Gov. Corzine and legislative leaders say that once they finish their property-tax overhaul, the issue will take center stage in Trenton. But as with tax reform, insuring the uninsured is a concept that is widely praised - and difficult to execute.

Under preliminary proposals, all New Jersey residents would be required to have health insurance - and could enroll in plans subsidized by the state.

The more than $1 billion price tag alone could be a deal breaker. But the costs of not overhauling the state's health-care system are much greater, said State Sen. Joseph Vitale (D., Middlesex), who is leading the legislative effort.

"We will have more uninsured, our costs will continue to spin out of control, employers will continue to drop coverage, people will get sicker, children will lose thousands of hours of school time, and the economy will suffer because adults have missed work because of preventable illness," said Vitale, chairman of the Senate Health Committee. "Hospitals will be at even greater risk of insolvency. . . . And it will only get worse."

Instead of proposing a single bill or starting with a big public announcement, "we're putting meat on the bone," Vitale said. Last year, he convened a working group to study the issue; the group includes two members of the Corzine administration.

Depending on federal dollars, Vitale said he hoped to begin with an expansion of the state's FamilyCare program, which insures nearly 700,000 low-income children and families.

Later in the year, separate legislation would be aimed at insuring around 600,000 residents who cannot afford private insurance but make too much to qualify for FamilyCare or Medicaid, he said.

The state pays nearly $600 million a year to hospitals to care for uninsured patients, who often seek care at emergency rooms because they have no access anywhere else.

David L. Knowlton, a former deputy state health commissioner who is chairing the working group, said these funds could be spent much more efficiently.

"We provide the most expensive and the worst level of care," said Knowlton, the president of New Jersey Health Care Quality Institute. "I can take an uninsured kid into an emergency room and get him treatment for asthma, but I can't give him the inhaler that will make him good forever, so he doesn't come back."

The plan would cost $1.7 billion in the first year, but the cost to the state would be less after premiums are paid.

Knowlton and Vitale said much of the rest could eventually be made up from other health-care costs now borne by the state, including aid to hospitals and other subsidies.

But not all of that could be shifted, especially not right away, they said.

Gov. Corzine said during an interview with New Jersey 101.5 FM radio last week that the state already did more to insure people than any other.

Still, "we're trying to come out with what we will call a universal system," said Corzine, who chairs the National Governors' Association health committee. "As soon as we get this property-tax issue behind us we'll pop the cork out of that bottle."

Senate President Richard J. Codey (D., Essex) said that if Vitale's financial pitch held up, "I'm all for it."

And Assembly Speaker Joseph Roberts (D., Camden) said he, too, was on board - but not necessarily with Vitale's plans.

"We have been working on ideas of our own," Roberts said. "If property-tax reform is the No. 1 problem in New Jersey, then affordable and accessible health care is the second biggest problem."

Republicans are far more skeptical. State Sen. Robert Singer (R., Ocean), a hospital executive who sits on the Senate Health Committee, called the concept "laudable" but said flatly that "unless they find some new pot of money, it's impossible."

President Bush used his State of the Union address last week to advocate for federal grants to states pursuing insurance initiatives, which could help New Jersey. But officials also worry that it could redirect money away from hospitals that treat a disproportionate number of uninsured patients.

In Pennsylvania, state officials say a health-insurance plan proposed by Gov. Rendell would primarily be paid for by employer and worker contributions, federal grants and increased tobacco taxes.

Though many states are trying, Massachusetts, Maine and Vermont are the only three that have enacted universal coverage laws.

Officials here are drawing some ideas from Massachusetts' complex, multifaceted plan.

Knowlton said his group agreed with Massachusetts' legal mandate that its residents obtain insurance.

But the group disagrees with its employer mandates - which it considers ineffective - and its array of different health plans. Instead, the group wants to choose two or three insurers with statewide networks to provide the plans, which it said would keep costs down.

Vitale said undocumented immigrants would be directed to federally qualified health centers and other clinics for treatment.

State consultants now are working on specifics, such as cost and affordability factors; that work will cost about $200,000, officials said.

Other interested groups said they supported the concept but awaited details.

Hospitals are concerned that in the transition to a new system, charity-care dollars could be pulled too early, said Kerry McKean Kelly, a spokeswoman for the state hospital association. New Jersey's hospitals already go unreimbursed for nearly $400 million worth of care to the uninsured, one reason 40 percent of them lose money, she said.

The effort must also include some way to keep private insurance costs affordable for small-business owners, said Christine Stearns, a vice president of the state Business and Industry Association.

A Camden doctor, Jeffrey Brenner, lauded the possible expansion of FamilyCare.

"The lack of insurance results in tremendous barriers for the working poor to be able to work and carry on their activities," Brenner said. "Uninsured diabetics end up in the hospital, uninsured women end up with cervical cancer. There's tremendous costs in the system in the end by not insuring people."