New Jersey Faces $19 Billion Health Care Spending Cuts Under Proposed Federal Budget

New Jersey's health care sector, valued at $53 billion and a significant driver of the state's economy, is facing substantial financial challenges due to proposed federal budget cuts. The House budget bill, which includes cuts to Medicaid and Affordable Care Act (ACA) subsidies, is projected to reduce health care spending in New Jersey by $19.2 billion over nine years. This reduction threatens the stability of the state's health care system and its economic contributions.

Medicaid, which currently covers 1.8 million New Jersey residents, would experience the largest funding cuts in its history, with estimates of annual losses ranging from $2.1 billion to $3.6 billion depending on the source. These cuts would also increase the number of uninsured residents, adding approximately $5 billion in uncompensated care costs for hospitals and providers. The bill also proposes reducing premium tax credits under the ACA marketplace, affecting over 450,000 New Jerseyans who rely on these subsidies, potentially doubling their insurance premiums. Hospitals, particularly those serving low-income populations, are expected to face revenue losses of nearly $7 billion over nine years, on top of the $1.5 billion in charity care they already provide.

These financial strains pose risks not only to health care access for vulnerable groups like seniors, veterans, and low-income families but also to employment levels in New Jersey's health sector, which comprises 13% of the state's workforce. The ongoing legislative debate includes possible further Medicaid cuts and tax extensions, complicating the fiscal outlook. The Robert Wood Johnson Foundation and the Urban Institute emphasize the extensive impact of these measures on health care delivery, economic stability, and state budgets.