Last month, House Republicans introduced a budget resolution that would drastically cut funding for social welfare programs such as Medicaid and the Supplemental Nutrition Assistance Program (“SNAP”) if passed. Unfortunately, our polarized political climate draws substantial attention away from the healthcare crisis these funding cuts would cause, so the purpose of this article is to refocus the conversation on the real-life implications of the current House proposal on New Jerseyans specifically.
Medicaid programs in New Jersey fall under the umbrella of “NJFamilyCare” which serves approximately 1.8 million New Jerseyans statewide. This population includes the elderly, disabled, those who require long-term care, those with serious mental illness, individuals with developmental disabilities, as well as low and moderate-income children and adults. In other words, Medicaid serves as a critical resource for some of the most vulnerable members of our society.
Funding for NJ FamilyCare is split between the state and federal government, with the latter currently contributing approximately $14 billion per year, and the State of New Jersey contributing approximately $10 billion per year. With these numbers in mind, the subject budget resolution seeks to reduce Medicaid funding by $880 billion, which will result in a massive reduction in funding allocated to the states. States like New Jersey are anticipating a loss of anywhere between $2.2 billion and $5.2 billion per year as a result. Make no mistake about it: service providers (hospitals, nursing homes, rehab facilities, etc.), individual Medicaid recipients and non-Medicaid recipients alike will feel the effects. For example, hospitals that rely on a steady stream of Medicaid dollars to meet their bottom line will face deficits resulting in layoffs, staff shortages, and ultimately a decrease in the quality of care and services provided to all patients.
It is unclear how these cuts will be implemented at the moment. One method currently being proposed (in combination with dollar-for-dollar reductions allocated to the states) is an alteration of Medicaid’s eligibility rules in the form of work requirements. This concept was previously introduced (but ultimately overturned) during the previous Trump administration in three separate federal lawsuits. Nevertheless, the New Jersey Department of Human Services estimates that up to 700,000 low-income, working age adults will be terminated from their Medicaid programs if these work requirements are implemented. If implemented, work requirements will disproportionately effect individuals with mental illness, substance abuse disorders, and those who are voluntarily unemployed due to family obligations.
In sum, the GOP-led effort to reduce the federal budget deficit is a noble pursuit; however, cutting funding for programs such as Medicaid is wholly the opposite.
