Massive Medicaid Cuts Threaten Healthcare for Millions in New Jersey

TRENTON, N.J. — A proposal to cut $880 billion from the federal Medicaid program over the next decade could have severe implications for New Jersey‘s vulnerable populations, including children, the elderly, and individuals with disabilities. State Human Services Commissioner Sarah Adelman reported that New Jersey could lose $5.2 billion annually, affecting up to 700,000 residents.

Adelman highlighted that the changes in federal funding rules would devastate healthcare accessibility for New Jerseyans. “Our Medicaid program ensures that 1.8 million New Jerseyans — children, working families, older adults, and individuals with disabilities — receive critical health care services,” Adelman said in a memo posted on the state website.

The new federal cuts are intended to offset expenses incurred during President Trump’s first term. The state’s Medicaid program, known as NJ FamilyCare, currently supports approximately 1.8 million low-income and disabled constituents. Costing $24 billion annually, the program consists of $10 billion financed by the state and $14 billion by the federal government.

Medicaid services are extensive, covering hospital and physician visits, prescription drugs, nursing care, mental health services, and care for developmental disabilities. The significance is underscored by the fact that nearly a third of all infants in New Jersey rely on the program for health coverage. However, changing federal reimbursement allocations could require the state to make difficult choices about financing or potentially exclude individuals from the program.

Should the state lose the 90% federal match for individuals insured under the Affordable Care Act, it would translate to a staggering $2.2 billion loss. Conversely, a loss of the 50% federal match for other New Jersey FamilyCare members would cost $2.3 billion. These cuts would undoubtedly place a heavy burden on the state’s healthcare system.

Additionally, Congressional Republicans are advocating for work requirements for adults to qualify for Medicaid. A 2021 Kaiser Family Foundation study reflected that 12% of low-income adults did not work due to caretaking responsibilities for disabled or sick family members, while 10% were themselves sick or disabled.

“It’s crucial for stakeholders, advocates, policymakers, and recipients to fully understand the potential repercussions on health care and services if these proposals are enacted into law,” Adelman emphasized, urging Congressional leaders to safeguard Medicaid’s integrity.

Hospitals would similarly experience financial strains as matching funds are diminished. For instance, Atlantic Health System could face losses between $32.5 million and $101.1 million, while RWJ Barnabas Health’s 13 facilities could incur costs as high as $650.4 million.

U.S. Rep. Mikie Sherrill (D-N.J.) has pledged to combat these proposed cuts. “Medicaid is critical to ensuring that nearly two million New Jerseyans have access to quality, affordable health care,” Sherrill stated. “These cuts will lead to worsening staff shortages and limit access to health care for New Jerseyans in our most vulnerable communities.”

The implications of these funding cuts could lead to significant hardships for many New Jersey residents who depend on Medicaid. As pressure mounts on the state’s budget amid these federal changes, stakeholders are advocating for a protective approach to funding that prioritizes the needs of vulnerable populations.