NJ Lawmakers Divided Over Proposed Medicaid Budget Cuts

BySophia Johannson

New Jersey’s congressional delegation faces growing pressure as House Republicans advance budget proposals that could significantly reduce Medicaid funding, despite President Trump’s February assurance that the program would remain untouched. The state’s three Republican representatives – Tom Kean Jr., Jeff Van Drew, and Chris Smith – all supported the House budget resolution that calls for $880 billion in cuts to programs overseen by the House Energy and Commerce Committee.

The resolution, which passed on a narrow 217-215 party-line vote, targets reductions that would primarily impact Medicaid, according to NJ.com. If implemented, these cuts could affect coverage for hundreds of thousands of New Jersey residents among the state’s 1.85 million Medicaid enrollees.

Focus on “Waste, Fraud, and Abuse”

Representative Tom Kean Jr. (R-7th Dist.) has defended his support for the budget resolution by distinguishing between legitimate beneficiaries and what he characterizes as systemic inefficiencies. “I support strong Social Security, Medicare, and Medicaid programs for those who depend on them. Children, seniors, and those who are disabled rely on these crucial programs,” Kean stated. “I do not support these programs being riddled with waste, fraud, and abuse — that is a direct threat to their actual missions.”

Critics note that Kean’s statement omits mention of low-income adults without disabilities who gained Medicaid eligibility through the Affordable Care Act expansion – a group that includes approximately 550,000 New Jerseyans. These recipients appear most vulnerable to potential cuts as Republicans consider reducing the enhanced 90% federal funding match for expansion populations.

According to Axios, House Energy and Commerce Chair Brett Guthrie is considering either lowering the federal share of costs for the expansion population or implementing a per capita cap specifically for this group.

State Already Recovers Significant Funds

Data from New Jersey’s oversight agencies suggests that current fraud recovery efforts already capture substantial improper payments. The Office of the State Comptroller recovered nearly $120 million in overpayments or wrongful payments in the last fiscal year alone, with more than $1 billion recovered over the past decade, according to NJ Spotlight News.

“There is a right way to both ensure that Medicaid achieves its purposes and to find the scams,” said Kevin Walsh, New Jersey’s acting state comptroller. “An effective approach to Medicaid would involve not undermining the system and the important work it does, while ensuring that bad actors are kept away.”

The U.S. Department of Health and Human Services reports that states nationwide recovered $1.2 billion through fraud control units in fiscal year 2023. However, this figure likely understates total recoveries, as it only counts certain types of enforcement actions.

Impact on New Jersey Communities

The potential cuts would disproportionately affect certain congressional districts. In Van Drew’s 2nd District and Smith’s 4th District, more than 20% of constituents – exceeding 150,000 people in each district – receive coverage through NJ FamilyCare, the state’s Medicaid program. By comparison, Kean’s 7th District has approximately 70,000 enrollees, representing less than 10% of his constituency.

The New Jersey Department of Human Services has estimated that various proposed cuts could result in annual funding losses between $2.2 billion and $5.2 billion for state Medicaid programs. The total cost of Medicaid in New Jersey is approximately $24 billion, with about $14 billion coming from federal funds.

Work Requirements and Other Proposals

Beyond reducing expansion funding, Republicans may propose work requirements for adult Medicaid enrollees who don’t qualify for Supplemental Security Income. The Congressional Budget Office estimates this change could reduce federal spending by approximately $100 billion, primarily by reducing enrollment.

Policy analysts point out that such requirements may be misaligned with the realities of the Medicaid population. “Waste, fraud and abuse are already heavily targeted by inspectors general at the federal level and at the state level,” said Peter Chen, senior policy analyst with New Jersey Policy Perspective. “The message around fraud, waste and abuse implies the problem is way bigger than it is… There’s just not that much.”

According to the Kaiser Family Foundation, 64% of non-elderly adult Medicaid enrollees without SSI already work, while another 28% are caregivers, students, or individuals unable to work due to illness or disability.

As congressional deliberations continue, New Jersey’s Republican representatives face difficult choices between party loyalty and constituent interests in a state where Medicaid provides essential healthcare coverage to approximately one in five residents.

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