NJ Faces $3.6B Medicaid Funding Loss Under GOP-Led Federal Cuts
New Jersey faces a significant reduction in federal Medicaid funding, with an estimated loss of $3.6 billion in the upcoming fiscal year under a comprehensive Republican-led legislative proposal advancing in Congress. This proposal, consisting of multiple bills bundled into a 1,116-page package, aims to cut Medicaid spending by $625 billion nationwide over ten years, introducing work requirements for low-income adults and eliminating coverage for approximately 360,000 New Jersey residents. The state currently relies on Medicaid for 1.8 million residents, covering a substantial portion of nursing home care and births, with Medicaid comprising nearly 44% of the state's total budget.
The legislation includes measures to reduce hospital aid by up to $300 million and restrict states’ use of provider taxes, potentially impacting funding streams that attract federal matching dollars. It also proposes penalties for states, like New Jersey, that offer Medicaid coverage to undocumented children, reducing federal matching funds by 10% and costing the state an estimated $700 million annually. These changes aim to decrease program enrollment through more stringent eligibility verification and enrollment processes.
In addition to Medicaid cuts, a separate congressional tax committee is advancing a bill with provisions to eliminate $219 billion from ACA marketplace subsidies over ten years. This would remove tax credits that currently help over 513,000 New Jersey residents afford coverage in the ACA marketplace, leading to an average premium increase of 110% for most enrollees. National analyses project that over 4 million people could lose affordable marketplace insurance due to these changes.
The work requirements incorporated into the Medicaid legislation are intended to restrict coverage to those deemed "able-bodied adults" who meet employment criteria. However, data indicate that a significant majority of Medicaid recipients are already employed or unable to work due to caregiving, disability, or education. Critics note that many available low-wage jobs lack health benefits, which could increase uninsured rates among affected populations.
Congressional leaders aim to pass the legislation swiftly, with a target date around Memorial Day; however, the bill faces potential obstacles in the Senate, where more conservative members seek deeper cuts or may oppose the package entirely. The proposed changes carry substantial implications for state budgets, healthcare providers, and low-income populations reliant on Medicaid and ACA marketplace subsidies.