A federal budget bill passed by the U.S. House on May 22 could slash New Jersey’s Medicaid funding by $3.6 billion annually and strip health coverage from roughly 360,000 residents, state officials said.
The legislation, approved by a single vote, would introduce new work requirements, reduce federal matching funds, and roll back subsidies tied to the Affordable Care Act. The changes could remove about 20% of enrollees from NJ FamilyCare, the state’s Medicaid program.
Governor Murphy called the bill “a disaster for the American people and the people of New Jersey” in a statement.
New Jersey currently spends $24 billion on Medicaid, with $14 billion provided by the federal government. The program covers 1.8 million low-income residents and funds services ranging from pediatric care to nursing homes
Critics warn the bill would lead to higher insurance costs and increased strain on hospitals and clinics. Premium subsidies would expire, raising annual costs by thousands of dollars for middle-income families. Medicare could also face $500 billion in automatic cuts over a decade if the bill’s projected $3.3 trillion deficit materializes.
The legislation includes tax extensions, new deductions, and a $1,000 “Trump investment account” for children born between late 2024 and early 2029.
“Big, Beautiful Bill” Key Provisions
- Work requirements: Applicants in New Jersey and other states must work, volunteer, or attend school at least 80 hours a month.
- Loss of subsidies: Tax credits that helped reduce insurance costs for low- to middle-income residents will expire.
- Lower federal match: The federal share for covering undocumented immigrants would drop from 90% to 80%, potentially costing New Jersey $6 billion over a decade.
The bill now moves to the Senate, where changes are expected before it can be finalized.
The New Jersey Digest is a new jersey magazine that has chronicled daily life in the Garden State for over 10 years.