Battle Ends On Free Care For Uninsured

For the first time since January, New Jersey will be sending out reimbursement checks to the 84 hospitals that provide free medical treatment to the uninsured, now that the state has finally agreed on a financing plan.

Ending a five-month debate over how to pay for hospital care for the uninsured, Gov. Christine Todd Whitman signed the bill into law about an hour after it was approved 32 to 7 by the State Senate. The two-year plan continues to rely on payroll taxes designated for the state's unemployment fund and seeks to move the uninsured into a managed-care network that has yet to be created.

Governor Whitman also signed a bill that extends unemployment benefits from 26 weeks to 39 weeks through the end of this year.

The Legislature included an extension of unemployment benefits to win the support of organized labor leaders who had joined with business leaders to oppose diverting any more payroll taxes designated for the unemployment fund to pay for hospital care for the uninsured. Since 1993, the state has paid for so-called charity care with $1.6 billion in payroll taxes that had been earmarked for the unemployment fund.

Under the new plan, the state would take $660 million more out of the unemployment fund over the next two years. The rest of the charity care bill would be paid with $56 million from the state budget. The bill also includes a $300 million reduction in unemployment taxes for employers, but several business executives said they were unhappy that the Legislature and the Governor had not reached a permanent solution that relied less on the fund. Business leaders worry that unemployment payroll taxes will increase because so much money has been diverted from the fund.

"We are disappointed," James F. Leonard, a vice president of the New Jersey Chamber of Commerce, said. "The opportunity to make a solution permanent was missed."