NJ Spends $10M to Keep Residents on Medicaid

New Jersey has roughly 350,000 residents at risk of losing Medicaid coverage once federal work requirements kick in, and Gov. Mikie Sherrill is putting more than $10 million on the table to keep them enrolled.

Sherrill tucked the money into her $60.7 billion budget proposal, a direct shot at Trump administration rules that will require certain Medicaid recipients to regularly hand over pay stubs, school records, or other paperwork proving they still qualify. The mandate hits low-income adults who aren’t disabled. That’s a substantial share of New Jersey’s Medicaid rolls, and the deadline is January.

“The federal policy change makes people jump through hoops to stay on Medicaid,” Sherrill said when she laid the budget out for lawmakers. The $10 million goes toward new technology to help people clear what she called “burdensome paperwork requirements.” State officials said they’d pursue a federal match on portions of that spending, which could stretch the total considerably.

State Human Services Commissioner Stephen Cha has been working the ground level, meeting with community groups who deal with Medicaid members directly. He doesn’t sugarcoat it. The state can’t block Washington. What it can do is run its own systems as well as possible.

“It’s up to us, as a community, here in New Jersey,” Cha said. “The final magnitude of coverage losses will depend largely on how effectively our systems perform. We will do everything possible to minimize harm to residents.”

The national picture is sobering. An Urban Institute analysis found that without state intervention, as many as 10 million people could lose coverage across the country. Two-thirds of those at risk fall between 50 and 64 years old. More than half either live with a disabled household member or are in poor health themselves. Nearly three-quarters are self-employed. One in five has a child under 14.

Don’t let anyone tell you these are people gaming the system.

In New Jersey, Medicaid is administered as NJ FamilyCare, and the Sherrill budget commits nearly $26 billion to the program. State taxpayers cover roughly $7.2 billion of that. The federal government picks up about two-thirds of Medicaid costs nationwide, a formula that Trump’s team has already flagged for cuts.

Sherrill’s got a second piece of this puzzle working through the legislature. She wants to raise $145 million by fining large companies whose workers lean on NJ FamilyCare instead of employer-provided insurance. Business groups aren’t having it. Some advocates for low-income workers have raised concerns too. That argument won’t be settled quietly.

The full budget lands in lawmakers’ laps now. They’ve got to pass something before fiscal year 2027 starts on July 1, which puts the Medicaid provisions squarely in the middle of spring negotiations. Expect it to get loud.

The New Jersey Monitor has been tracking how the state navigates the federal changes as they develop.

What’s clear right now: Sherrill is a Democrat running a state with one of the most expensive Medicaid programs in the country, trying to limit the damage from Washington while also closing a budget gap. The $10 million for enrollment systems is real money, but it’s modest compared to the $26 billion total program cost. If the federal government reduces its share, New Jersey’s 2026 and 2027 budgets could face a hole that dwarfs anything on the table today.

Cha’s community meetings are the unglamorous part of this. Nobody’s cutting ribbons. It’s caseworkers, nonprofits, and county health offices trying to build a system that can absorb a paperwork avalanche without dropping 350,000 people off their health insurance.