New Jersey stands to lose more than $3.3 billion in annual Medicaid funding under federal changes that impose new work and immigration status requirements, eliminate subsidies, and change access to health coverage. The New Jersey Department of Human Services has also estimated that these new regulations would cut $360 million per year from the state budget.
Local advocates say the state’s response, while meaningful, falls short of what residents will need.
Maggie Garbarino, a spokesperson for Gov. Mikie Sherrill (D), said in a written statement that the Trump Administration’s “reckless Medicaid cuts and blatant disregard for the health of the American people” will put 304,000 New Jerseyans at risk of losing their benefits.
“Many will remain eligible for assistance but will lose their Medicaid coverage simply due to bureaucratic hurdles imposed by the Trump Administration and designed to kick people off their health coverage,” Garbarino added.
In response to these looming funding cuts, Sherrill released a $60.7 billion budget proposal for Fiscal Year 2027 that includes measures to keep eligible residents on NJ FamilyCare, the state’s Medicaid program, which provides health benefits to 1.8 million residents.
The budget proposal included $34.6 million in additional state costs resulting from the federal government reducing its Medicaid match for emergency services from 90% to 50%. The budget will also feature $10.5 million for state agencies, counties, and vendors as they prepare for new Medicaid work requirements and more frequent eligibility checks.
Laura Waddell, health care program director at New Jersey Citizen Action, said that the state must also look for ways to raise revenue and keep as many health care programs running as possible.
Due to higher premiums, 70,000 New Jerseyans have already dropped their health insurance since Jan. 2026. New Jersey Citizen Action also reported that 20,000 more NJ FamilyCare enrollees will lose coverage on Oct. 1 due to new immigrant status requirements.
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