States may adopt New Jersey's Medicaid fee

New Jersey is launching a new fee on companies whose workers have Medicaid health coverage instead of being covered by their employers. Other states are considering it, too.

- GEOFF MULVIHILL

Democratic lawmakers and governors see it as a way to help pay for the joint federal and state insurance program that covers low-income residents as federal policy changes are expected to make the program more expensive for states and may lead to a reduction in the number of people with coverage.

Proponents also say it's about fairness because employers benefit from having some lower-income workers with taxpayer-funded health coverage.

Business groups object, and so do do some liberal policy organizations.

New Jersey puts the fee in place

New Jersey Gov. Mikie Sherrill signed a measure Tuesday night to charge employers that have at least 50 workers covered by Medicaid, and the state budget she approved earlier in the week counts on raising $145 million this year from the program.

Under the plan, companies will be billed for each employee and employees' dependent receiving Medicaid, the joint state-federal insurance program.

The fees per person would start at $325 a year for companies with 50 to 249 Medicaid beneficiaries and top out at $725 annually for employers with at least 500 recipients.

A bill passed this week in California doesn't impose a charge now, but it does direct the state administration to present lawmakers with options for doing so next year. Finishing the job would fall to the successor of Gov. Gavin Newsom, a Democrat who is leaving office in January. Democratic gubernatorial candidate Xavier Becerra has made an employer charge part of his election platform.