LEGISLATIVE FISCAL ESTIMATE

SENATE, No. 3374

STATE OF NEW JERSEY

218th LEGISLATURE

 

DATED: AUGUST 19, 2019

 

 

SUMMARY

 

Synopsis:

Provides Medicaid coverage to eligible pregnant women for 365-day period beginning on last day of pregnancy.

Type of Impact:

Increase in State costs and revenue.

Agencies Affected:

Department of Human Services, Division of Medical Assistance and Health Services.

 

 

Office of Legislative Services Estimate

Fiscal Impact

Annual 

 

State Cost

Indeterminate significant increase

 

State Revenue

Indeterminate significant increase

 

 

 

 

·         The Office of Legislative Services (OLS) estimates that this bill may cause the State to incur significant annual costs to extend the coverage of Medicaid services to certain pregnant individuals from a 60-day period to 365-day period beginning on the last day of a woman’s pregnancy.  Such costs will be offset by an identical increase in federal Medicaid matching funds.

 

 

BILL DESCRIPTION

 

      Current State and federal law provides that Medicaid-eligible pregnant women are to be provided with continuing Medicaid coverage for 60 days following the last day of the pregnancy.  This bill extends this coverage to provide that eligible pregnant women will retain Medicaid coverage for a 365-day period following the end of the pregnancy.  The bill additionally specifies that the extended coverage applies to pregnant individuals whose income does not exceed the highest income eligibility level established for pregnant women under the State Medicaid plan, which is currently 199 percent of the federal poverty (FPL).

FISCAL ANALYSIS

 

 

EXECUTIVE BRANCH

 

      None received.

 

OFFICE OF LEGISLATIVE SERVICES

 

      The OLS estimates that this bill may cause the State to incur significant annual costs to extend the coverage of Medicaid services to certain pregnant individuals from a 60-day period to 365-day period beginning on the last day of a woman’s pregnancy.  Such costs will be offset by an identical increase in federal Medicaid matching funds.

      Under federal law, all states must provide Medicaid coverage for pregnancy-related services to pregnant women with incomes up to 138 percent of the FPL through the end of the month in which a 60-day period ends following the termination of the pregnancy.  New Jersey has expanded this provision to include full Medicaid coverage for pregnant women with incomes at or below 199 percent of the FPL – the maximum income eligibility limit for pregnant women under the State Medicaid Plan – during the 60-day period.  Under the bill, these existing State provisions would extend to a 365-day period.

      Under the Affordable Care Act (ACA), pregnant woman who earn less than 138 percent of the FPL are eligible for continuous Medicaid coverage.  Therefore, the bill’s provisions would only apply to those pregnant women who earn between 138 percent and 199 percent of the FPL.  According to the Department of Human Services’ NJ FamilyCare Data Dashboards (http://www.njfamilycare.org/analytics/home.html), as of June 2019, 295,456 adult women in New Jersey are eligible for Medicaid through the ACA expansion, while 82,274 adult women (other than those who qualify in the Aged, Blind, and Disabled category) – or approximately 28 percent of the ACA expansion group – qualify for Medicaid through other pathways. 

      According to evaluation data in the Fiscal Year (FY) 2020 Budget, the average anticipated annual cost for Medicaid (non-ACA expansion) parents in FY 2020 is $8,865.31, which suggests that extending postpartum coverage by 305 days will cost the Medicaid program an additional $7,408 per eligible beneficiary.  In Calendar Year 2017, 30,547 of the births in the State were covered by Medicaid.  Assuming 28 percent of Medicaid births are for beneficiaries covered under the provisions of this bill, and all births are for single gestation pregnancies, the Medicaid program would incur the above per beneficiary cost for 8,553 beneficiaries annually, resulting in $63.4 million in additional expenses for the program.  Of these expenses, the State would be responsible for $31.7 million, with federal matching funds providing the remaining $31.7 million.  The OLS notes that this extrapolation of available data does not reflect the actual cost of the bill, and that the fiscal impact on the State may shift depending on the actual number of applicable beneficiaries and the cost for such beneficiaries’ benefits over the extended postpartum period provided in the bill.

 

Section:

Human Services

Analyst:

Anne Cappabianca

Assistant Fiscal Analyst

Approved:

Frank W. Haines III

Legislative Budget and Finance Officer

 

This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.

 

This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).