NJ Fiscal Folly

Thursday, March 23, 2006

How Liberals Go Broke

Gov Corzine wants to add 50,000 children to NJ FamilyCare, a health insurance program. This may in fact be a laudable idea.

However, he tells us it will only cost $14.3 million (including $9.3 million in Federal funding). This is laughable, not laudable.

As I noted in a prior post, the NJ Hospital Association estimates that NJ hospitals spend $250-300 million per year providing medical care to illegal immigrants. Since there are approximately 350,000 illegal immigrants in NJ, this works out to about $785 per person per year.

Let's be conservative, and assume $500 per child per year. Multiply $500 by 50,000 and you get $25 million per year.

Now the difference may not seem like very much, but the program's financial requirements will only grow in the future. Medical costs are difficult to control (would $500 cover your child?). Politicians and interest groups will constantly push to expand enrollment. Unless Corzine can guarantee that Federal funding will continue to cover 65% of program costs forever (anybody want to make that bet?), NJ is once again increasing the fixed cost base.

Good intentions and bad math are a ruinous combination.

As I said, Corzine's idea may be laudable. But let's start with a realistic estimate of program costs, and let's identify the spending cuts elsewhere that will make this program affordable on a continuing basis.

Footnote: Some participants in NJ FamilyCare pay small monthly premiums. Corzine's budget commentary does not indicate that this would be true for his new initiative.

2 Comments:

At 12:12 PM, Blogger Enlighten said...

You may be interested in this – “Twenty-four percent of New Jersey’s children are enrolled in Medicaid. It costs New Jersey just $1,925 per year, on average, for each Medicaid-eligible child compared to the average costs per adult Medicaid enrollee of $9,362." Link.

 
At 11:43 PM, Blogger Kate said...

I would love to know how many children in New Jersey are on Medicaid and NJ Family Care. From that population I would like to knmow how many have single family homes. From there I would like to know how many have dead beat parents who refuse to pay child support.

I wonder if all of the dead beats actually paid their support when they were ordered to, how much we would be saving our tax payers?

 

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