IN THE STATES: New Jersey Unveils New Coverage Proposal

Can New Jersey afford health reform? Can New Jersey afford to do without health reform? We traveled north to the Garden State today as our very own Len Nichols, (see Len's presentation here) the AARP, the Rutgers Center for State Health Policy, Governor Jon Corzine, Representative Frank Pallone, and a host of state lawmakers addressed those two key questions.

Most of the buzz surrounded New Jersey State Senator Joseph Vitale, chairman of the health committee, who has introduced legislation that would seek to cover all New Jerseyans in two phases during a three-year-period:

• Phase 1: Vitale would require all children to have coverage. He would expand eligibility for New Jersey FamilyCare (the State Children's Health Insurance Program expansion), and introduce reforms to revive New Jersey's struggling individual market.
• Phase 2: Vitale would require all individuals to have coverage and create a new insurance option for uninsured residents.

While the reaction to Vitale's proposal is largely positive, some, including Governor Corzine, have expressed concern with the state's ability to finance reform over the long-term. Although Corzine, a former U.S. Senator, regards covering everyone in his state as a policy goal and spoke favorably of Vitale's approach, he views health reform as largely a federal responsibility.

Federal reform is tough but at least Washington lawmakers have access to financing levers—mainly the federal tax system—that are not available to the states. Still, the question on everyone's mind here: Can we really afford health reform amid an economic downturn?

In 2000 the Institute of Medicine put the cost of the poor health and diminished lifespan of the uninsured at between $65 and $130 billion a year (Our own update at New America, which we'll be putting out next week, put the cost at between $102 and $204 billion in 2006). Many health economists believe this is enough money to cover the entire uninsured population. Meanwhile, rising health care costs undermine the competitiveness of U.S. businesses, threaten the stability of middle class jobs, and place increasing strain on federal, state, and local budgets. So the answer New Jersey seems clear: we cannot afford to ignore our struggling health system any longer.