Unable to reach consensus on an alternative financing method, New Jersey lawmakers have tentatively agreed to continue funding hospitals' charity-care costs through the state's unemployment insurance trust fund.
To labor and business groups, the compromise amounts to another broken promise (See related story, p. 53).
In December 1992, when lawmakers approved legislation allowing the trust fund to be tapped for charity-care purposes, labor and business leaders said they were told it would be a temporary solution. But the measure expired last December with no consensus on how to replace that funding mechanism.
In a letter to state legislators, leaders of the New Jersey State AFL-CIO accuse the Legislature of a lack of leadership and inventiveness on the charity-care funding issue. They contend that siphoning money from the $1 billion fund could lead to increased payments by business and workers at a time when the state is experiencing an unemployment rate of 7.3%.
According to the AFL-CIO, workers and small businesses contribute $340 million a year to the fund.
Numerous charity-care funding schemes have been proposed.
Last week, the AFL-CIO, joined by the New Jersey State Chamber of Commerce and the Business and Industry Association of New Jersey, reiterated its support of legislation to fund charity care through "access fees" tacked onto claims filed by health facilities and providers.
Another proposal would fund charity care from the proceeds of video blackjack and poker. A constitutional amendment would be needed to allow video lottery games to operate in the state.
Hospitals stopped receiving monthly payments from the trust fund on Feb. 15. Based on 1995 charity-care outlays, the New Jersey Hospital Association estimates that the missed payments translate to a loss of $33 million.
The compromise measure proposed by state Sen. Robert Littell (R-Sussex) and Assemblywoman Charlotte Vandervalk (R-Bergen) would provide $300 million in charity-care payments for hospitals. It also calls for $50 million in aid to hospitals that sponsor special programs for the poor and $50 million in health insurance subsidies for the working poor. Over four years, trust fund money would be replaced with payments from the state's general fund.
In a joint statement, Gary S. Carter, president of the NJHA, and Tom Terrill, president of University Health System, commended the compromise bill and urged business and labor to embrace it.