Official: N.J. Can Make Up for Loss of Federal Reimbursement with Other Medicaid Savings

TRENTON, N.J. -- While waiting for federal approval to overhaul New Jersey's Medicaid program, state Human Services Commissioner Jennifer Velez said Wednesday the state will reach its goal of saving $300 million this year without having to impose service cuts or reducing the number of people insured.
Velez acknowledged "it was a big disappointment" when the U.S. Centers for Medicare and and Medicaid Services declined the state's request last year for $107.3 million that New Jersey mistakenly paid for decades by providing disability insurance coverage for low-income people. Every state had hoped to recoup millions this way, under a mistake the federal government has acknowledged, she noted.
But Velez assured the Assembly Budget Committee in Trenton the lost reimbursement would be made up in other unanticipated ways, unrelated to the overhaul, formally known as the "comprehensive Medicaid waiver." Enrollment slowed down, and pharmaceutical drug companies paid more rebates to help offset the cost of prescription drugs, she said. Moving about 155,000 of senior citizens and people with disabilities into managed care plans also saved more money than expected.