Billions in federal Medicaid cuts could leave up to 700,000 New Jersey residents without coverage, state officials warn. Hospitals also face major financial losses if Congress follows through on proposed reductions to the program.
Gov. Phil Murphy’s administration says the cuts proposed by the Republican-led Congress could have “devastating consequences” for health care providers and residents, according to Human Services Commissioner Sarah Adelman. Medicaid, which funds services from routine doctor visits to nursing home care, is among New Jersey’s costliest programs, covering 1.8 million residents. This year’s $24 billion budget includes $14 billion from the federal government and $10 billion from the state.
GOP and Trump Push Forward on New Budget Plans
Congressional Republicans, led by former President Donald Trump’s push for cost reductions, propose cutting Medicaid to fund other initiatives, including tax cuts. Democrats strongly oppose the plan. Donald Trump’s last tax cut in 2017, The Tax Cuts and Jobs Act, added $1.9 trillion to the deficit and provided significant cuts for the top 1%. The TCJA is still in affect today.
Under the proposed plan, federal reductions could range from $2.2 billion to $5.2 billion in New Jersey. One scenario under discussion would cap federal contributions, forcing the state to cover overages or reduce services. Another proposal would tighten eligibility requirements, potentially removing thousands from the program.
Hospitals statewide are expected to take a financial hit, with projected losses ranging from:
RWJBarnabas: $205 million – $650 million.
Hackensack Meridian: $144 million – $456 million.
St. Joseph’s Health: $35 million – $108 million.
Atlantic Health: $32.5 million – $103 million.
Holy Name Medical Center: $11 million – $36 million.
Englewood Hospital: $13 million – $41 million.
The Valley Hospital: $6 million – $18 million.
NJ Medicaid Cuts, Who is Affected?
The cuts could affect children, elderly nursing home residents, disabled individuals, and low-income adults who rely on Medicaid.
New Jersey’s Medicaid program, NJ FamilyCare, provides hospital, dental, prescription, and mental health services. The federal government currently covers 90% of costs for low-income adults under the Affordable Care Act and 50% for most other recipients. Changes in matching rates could shift billions in costs to the state.
One Republican proposal includes work requirements for Medicaid recipients. A Kaiser Family Foundation study found 64% of recipients already work, while others are caretakers, disabled, or unable to work.
Murphy is expected to address the issue in his upcoming budget proposal. U.S. Rep. Mikie Sherrill, D-N.J., vowed to fight the cuts, calling them a threat to New Jersey’s health care system. She released a full statement on the matter here.
Speaker Mike Johnson has called for a House vote on the budget proposal this week, while the Senate has already passed its version. The GOP can only afford to lose two votes from their side on the proposal because of the narrow majority they hold. Several Republicans in Congress have expressed weariness surrounding the proposed budget. The final bill will be negotiated in Congress.
The New Jersey Digest is a new jersey magazine that has chronicled daily life in the Garden State for over 10 years.