Hospitals See Benefits in Universal Insurance

Hospitals and insurers, the health care players at the center of a bill to cover uninsured New Jerseyans with government-funded health insurance, stand to be financial winners under the plan, industry insiders say.

The measure (S-1557) would put New Jersey in the forefront of health care reforms being enacted by states and debated on the presidential campaign trail. The plan, proposed by Sen. Joseph Vitale (D-Middlesex), would make New Jersey the second state after Massachusetts to require all residents to have health care coverage.

There are almost 1.3 million uninsured people living in New Jersey, 242,000 of whom are children, according to a team that was spearheaded by Vitale to research universal health care. Uninsured residents would be automatically enrolled in a state-sponsored plan at places like emergency rooms and pharmacies.

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Len Nichols, a health care economist with the New America Foundation, says “there’s no question that [Vitale’s plan] is good” for hospitals and insurers. “Hospitals end up delivering the great bulk of the uncompensated care that the uninsured get,” he says. “If everyone is covered, and hospitals are giving up their [under-funded] subsidies, they should be able to reduce that cost shift to the privately insured and save money.”

Meanwhile, insurers that are “very good” at attracting market share and managing their costs efficiently “may end up making more money than before,” says Nichols.

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