Corruption & Waste in New Jersey’s State Health Plans

Back in September, President Bush held the line on Congressional Democrats’ (and many Republicans’) irresponsible plan to make more American kids dependent on government health care. Congress proposed to expand SCHIP (state government health insurance program) grants into the middle class, which drew a rare response of relative fiscal responsibility from the White House. I noted that the states which were most upset by the President’s shoving them away from the trough were those that the most out of control Medicaid and other state government health care programs: New York and New Jersey (which rank at the bottom of the U.S. Index of Health Ownership).

I’ve scribbled about how necessary it is to restore some fiscal discipline to New York’s state health programs, and now a new state audit shows how critical it is to do the same for its neighbor. NJ FamilyCare, meant for the poor, has enrolled three beneficiaries earning over $700,000 annually! Three people may be trivial, but get this: the state was also unable to recover $4.6 million from people who received benefits after they were no longer eligible, and the auditors discovered that $43.1 million was spent on beneficiaries whom the state did not know were eligible or not. That’s over 8% of program spending!

The situation is so out of control that the NJ Division of Criminal Justice has subpoenaed records from a state Medicaid program that paid a contractor to refurbish and sanitize used medical equipment – but that contractor only inventoried new equipment!

I suppose the good news is that the state had even ordered an audit, and then allowed the auditor to publish the results. Maybe the fact that the President pushed the New Jersey away from the federal spending trough forced the state’s politicians to find money elsewhere?

I’m sure this won’t shame them from their continuous bleating for more federal tax dollars, but as long as the President keeps a lid on the spending, I’m sure Garden State politicans and bureaucrats will keep finding health care dollars in places they’d never think to look – if they didn’t have to.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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