TRENTON – The state is applying for a federal waiver to clear $300 million from a $1.3 billion Medicaid shortfall in the FY2012 budget, and state Treasurer Andrew Sidamon-Eristoff was grilled on how this waiver process will work today by Assemblywoman Joan Quigley, (D-32), of Jersey City.
Sidamon-Eristoff told Quigley that New Jersey is just one in a group of states pleading with President Barack Obama’s administration for a new lease on these mandated health care payments
“This is probably one of the hottest topics going,” he said. “We will work with the feds to get the flexibility that we need.”
He tempered expectation that a waiver would be submitted before the budget is passed, but said the federal government is already granting “comprehensive” waivers to states like Rhode Island.
Quigley asked, “When will you begin to start seeing savings on that $300 million?”
Not until after the waiver is approved, he said, possibly at some point into the fiscal year.
“Suppose you don’t get the approval for another six, nine months,” she said. “How much are you going to save then?”
He conceded that the savings would be reduced every month that goes by without the waiver, and said the administration and legislature should be working on alternate cost reduction measures to offset any lost waiver savings. “We have to contemplate where we’re going to find the cuts,” Sidamon-Eristoff said.
Luckily, he said, the state needed no such “major mid-course corrections” last year, although the administration did cover a loss of federal Medicaid match funding in FY2011 that totaled more than $300 million.
Committee chairman Lou Greenwald (D-6) noted that while the state is asking for savings, funding might be eaten away further by the Congressional Republicans in Washington D.C.
First, those potential cuts are a separate issue than the waiver the state is requesting, Sidamon-Eristoff said.
Second, “We don’t let federal support guide our decision-making,” he said. “I thinks it’s appropriate and necessary to go forward with (reasonable assumptions about federal funding) being made.”
Greenwald cautioned doing so with a “razor-thin surplus” and uncertain revenues.