NJ can't afford to delay Medicaid reform
By: Danielle Zanzalari
Your Turn
Guest columnist
..... New Jersey currently spends over $6 billion more coming form the federal government. Roughly 2 million residents - 1 in 5 people - enrolled in the state's Medicaid program, NJ FamilyCare, which coves 30% of births and 60% of nursing home care statewide.
.....
But recent federal reforms to Medicaid, including a new per capita spending cap and a rollback of enhanced Affordable Care Act match rates, are projected to reduce federal support for New Jersey by $12.3 billion over the next decade, 41.2 billion per year in lost aid. The state must start reforming Medicaid into emergency cuts access the board.
..... My new report on the Garden State Initiative's website offers a clear path forward with three bold but achievable reforms to put NJ FamilyCare on a sustainable path.
..... First, New jersey must rein in spending by enforcing eligibility rules and tightening income thresholds. NJ FamilyCare currently allows enrollment up to 350% of the federal poverty level - a much more generous standard then neighboring states like Pennsylvania, Connecticut, Massachusetts and New York. that generosity comes at a high price. To contain coots, New Jersey must ensure that only those truly eligible remain in the system. This includes rigorously auditing eligibility and preparing for 2027, when federal law will require able-bodied adults without dependents to meet work or community engagement requirements to stay enrolled.
.....
Equally important, New Jersey needs stronger oversight of managed care organizations or MCOs, which deliver most Medicaid services. unlike Pennsylvanian's long-established independent board to monitor health care spending and outcomes, New Jersey has taken only initial steps toward cerate a similar body - and the legislation has yet to pass. Without accountability, MCOs have overstated provider networks, delayed dis enrollments and misused taxpayer dollars. The state should also enforce hospital price transparency and join a multi-state drug purchasing poll to reduce pharmacy expenses. Finally, New Jersey must shift reward form fee-for-service models that reward volume rate than patient outcome and quality.
..... Second, New Jersey must reform how it delivers long-term care. While most seniors prefer to age at home, 79% of long-term care Medicaid spending still goes to institutional nursing homes, where the average cost is $11,253 per month. In contrast, part-time home care costs just $2,534 per month. New Jersey's own task force on Long Term Care Quality and Safety recommends reducing the share of nursing home residents and expanding home and community-based care, a move that would both honor senior preferences and reduce taxpayer costs.
.....
Third, the state must invest in its long-term care workforce. Staffing shortage persist, especially for nursing home aides and registered nurses. though Governor Phil Murphy's fiscal year 2025 budget included $7.2 million in wage support for long-term nurses, far more incentives are needed. New Jersey should expand scholarships and technical programs and create career pathways to recruit healthcare workers form other states or abroad.
..... Without action on all three fronts - cost containment, long-term care reform and workforce investment - New Jersey risks being overwhelmed by rising Medicaid obligations.
..... Danielle Zanzalari is an assistant professor of economics at Seton Hall University and a Garden State Initiative contributor. She frequently researches and writes on finical regulation and public finance.