by TRENTON, N.J. — Approximately 350,000 New Jersey residents — nearly one in five of the state’s Medicaid recipients — could lose their health coverage under sweeping federal legislation signed by President Donald Trump, according to the New Jersey Department of Human Services.
The measure, known as the “Big Beautiful Bill,” slashes nearly $1 trillion in Medicaid spending over the next decade and introduces significant eligibility restrictions and cost increases for low-income Americans enrolled in the government health insurance program.
Major Changes Coming to NJ FamilyCare
In New Jersey, Medicaid operates under the NJ FamilyCare program, which provides health coverage to low-income residents, including families, seniors, and individuals with disabilities. The new federal law, signed by Trump on July 4, will impose major changes on the state’s Medicaid system in the coming years:
- Work Requirement: Starting as early as January 2027, “able-bodied” adults must work at least 80 hours per month to maintain coverage. Exemptions will apply to students, caregivers, and individuals with disabilities.
- Out-of-Pocket Costs: Beginning in October 2028, individuals in the Medicaid expansion group — those earning up to 138% of the federal poverty level (approximately $21,597 for an individual) — will face higher out-of-pocket expenses for medical care.
- Eligibility Redetermination: Eligibility reviews for Medicaid expansion recipients will increase from annually to every six months, starting in January 2027.
- Retroactive Coverage Reduction: Retroactive Medicaid coverage will be limited to one month before the application for expansion recipients and two months for traditional enrollees, effective January 2027.
- Restrictions for Noncitizens: Beginning October 2026, certain noncitizens — including refugees, individuals granted asylum, and abused spouses and children — will lose Medicaid eligibility under the new rules.
Impact on Hospitals and State Budget
New Jersey officials warn the bill will significantly strain the state’s healthcare system:
- An estimated $3.3 billion annual cut to hospitals and public health programs.
- A $360 million annual reduction in the state budget due to lost federal funding and provider assessments.
National Impact and Debt Concerns
Nationwide, nearly 12 million people are expected to lose Medicaid coverage over the next decade, according to the Congressional Budget Office (CBO). Other estimates place the figure as high as 20 million.
The $1 trillion in Medicaid cuts, however, will not offset the bill’s tax reductions and increased spending in other areas, including defense and immigration enforcement. The CBO projects the legislation will add $3.4 trillion to the national debt over 10 years.
Partisan Divide
The bill passed the House by a narrow margin, 218-214, with votes largely falling along party lines. New Jersey’s three Republican representatives — Tom Kean Jr. (7th District), Chris Smith (4th District), and Jeff Van Drew (2nd District) — voted in favor, while the state’s nine Democratic members opposed it.
As the changes roll out in the coming years, health advocates warn that vulnerable New Jersey residents could face significant barriers to accessing medical care.
