Issue Brief: Medicaid in New Jersey

UPDATED: SEPTEMBER 5, 2025 | BY LSNJ’S POVERTY RESEARCH INSTITUTE

All New Jerseyans deserve equitable access to affordable, quality, localized, and timely health care. Unfortunately, adequate health care is out of reach for far too many, especially those with low incomes. Individuals in poverty face barriers to care, lower quality of care, and poorer health outcomes. The Medicaid program serves as a bridge to decrease health inequities by providing comprehensive health care coverage to low-income and other qualified individuals—and produces significant benefits for individuals, health systems, communities, and economies.

The Basics: Medicaid and New Jersey Family Care

Medicaid is America’s national health insurance program that covers low-income individuals and other qualified persons. While the program is jointly funded by state and federal governments, Medicaid is administered by states within general federal guidelines. For example, states must provide certain mandatory services including hospital and physician care, laboratory and X-ray services, home health services, nursing facility services, and regular checkups.[i] States have broad flexibility to expand covered services, determine additional eligibility, and set provider reimbursement rates.[ii] New Jersey’s Medicaid program is New Jersey Family Care.

Who is eligible?

New Jersey Family Care provides coverage to individuals based on a set of eligibility criteria.[a1]

• Children under 19, regardless of immigration status, with incomes under 355% FPL
• Adults aged 19-64 with incomes below 138% FPL
• Pregnant people with incomes up to 205% FPL
• Immigrants who have been a Legal Permanent resident for at least 5 years, and have a qualifying income
• Refugees and asylees may also be eligible
• People with certain disabilities may also qualify

What services are covered?

NJ Family care provides comprehensive health coverage, with services including doctor checkups, treatment for illness, emergency care, inpatient and outpatient treatment, home health care, vision care, dental care, and more.[iv]

How is NJ Family Care Funded?

New Jersey Family Care is dually funded by both the federal government and the state of New Jersey. In Fiscal Year (FY) 2024, New Jersey Family Care cost a total of $98,396,000.[v] Total funding came from a variety of sources: $54,363,000 from the general fund; $30,849,000 from federal funds; $11,602,000 from other state funds; and $1,582,000 from bonds.[vi] The program accounted for 17.7 percent of the state’s budget in FY 2023.[vii]

For traditional Medicaid recipients, the federal government covers 50 percent of expenditures, while New Jersey covers the other half. For enrollees in the Medicaid expansion group, the federal government covers 90 percent of costs and New Jersey covers 10 percent.[a2]

How is Medicaid Spending Distributed?

On average, the state spent $8,934 per enrollee in 2021.[ix] However, costs varied by type of recipient, with seniors and individuals with disabilities incurring significantly higher expenses. On average, spending per senior was $22,367 and expenditures per individual with a disability were $32,257. In comparison, average spending per adult was $5,719, per child was $3,146, and per ACA Expansion adult was $6,533.[x]

Consequently, while seniors and persons with a disability represent a minority of Medicaid recipients, their care accounts for over half of program spending. Adults and children account for 83 percent of New Jersey Family First enrollees, but just 48 percent of spending. Individuals who are elderly or disabled make up 17 percent of enrollees, but 52 percent of expenditures.[xi]

In addition, the Medicaid program is especially important for pregnant women and seniors. In New Jersey, Medicaid covers around 30 percent of all births and 60 percent of nursing home residents.[xii] Further, the majority of the state’s Medicaid spending goes towards managed care, at 65 percent. Long-term care accounts for 16 percent, acute care makes up 12 percent, Disproportionate Share Hospital Payments[1] take up 4 percent, and payments to Medicare comprise 3 percent. [xiii]

About New Jersey Family Care Recipients

In January of 2024, the New Jersey Department of Human Services reported 2,065,982 NJ Family Care enrollees in the state.[xiv]

The vast majority of Medicaid recipients lived in True Poverty.

In 2023, data from the U.S. Census Bureau indicates that 75 percent of New Jersey Family Care recipients lived below True Poverty. In addition, a large proportion of New Jerseyans relied on NJ Family Care for health insurance—two in five (40.3 percent) received health insurance through NJ Family Care.

Medicaid by Race

In 2023, more than one-third of Medicaid recipients were Hispanic; around one-third were white; just over one-fifth were Black, and around six percent were Asian.

Source: LSNJ PRI Analysis of U.S. Census Bureau 1-Year PUMS Estimates, 2023

A disproportionate share of people of color rely on Medicaid for health insurance coverage. Around one in three Black and Hispanic New Jerseyans use Medicaid, compared to just over one in 10 white and Asian New Jerseyans.

Source: LSNJ PRI Analysis of U.S. Census Bureau 1-Year PUMS Estimates, 2023

Medicaid and Age

The majority of Medicaid recipients are adults, representing nearly half of all NJ recipients. Children made up 38.4 percent of Medicaid recipients, while 12.8 percent were seniors.

Source: LSNJ PRI Analysis of U.S. Census Bureau 1-Year PUMS Estimates, 2023

While adults represent the greatest share of Medicaid recipients, a disproportionate number of New Jersey’s children receive health coverage through the program. Medicaid covers 34 percent of New Jersey’s children, 15 percent of New Jersey’s adults, and 14 percent of New Jersey’s seniors.

Source: LSNJ PRI Analysis of U.S. Census Bureau 1-Year PUMS Estimates, 2023

Medicaid and Disability

Medicaid is vitally important for individuals with a disability to access health care. In fact, 34.3 percent of New Jerseyans with a disability receive Medicaid.[xv]

Benefits of Medicaid

Medicaid has expansive benefits that help individuals, health systems, communities, and state economies. Research shows that Medicaid leads to healthier people, supports functional health systems, builds stronger communities, and bolsters robust economies.

Individuals

Medicaid provides significant benefits for recipients, including improved health, better outcomes for children, and increased financial wellbeing.

Medicaid Recipients Experience Improved Overall Health

Research shows that Medicaid coverage significantly improves the health of enrollees. By providing comprehensive health coverage, Medicaid enables recipients to access preventative, supportive, and emergency care. Studies indicate that with better access to care, individuals are less likely to postpone care, go without care, or use emergency medical services.[xvi] Improved access leads to better overall health, fewer and better managed chronic conditions, fewer hospitalizations and emergency room visits, and lower mortality.[xvii]

• Screenings and Preventative Care: Medicaid recipients are much likelier than their uninsured counterparts to have access to care. In fact, just 14.2 percent did not see a doctor or health care professional, compared to nearly half of uninsured individuals. Additionally, just 11.4 percent did not have a usual source of care, compared to more than two in five uninsured persons. Only eight percent of Medicaid recipients postponed care due to cost, compared to around one in four without insurance.[xviii]

In 2021 and 2022, data shows that Medicaid recipients were more likely to be up to date on cancer screenings. In fact, 78 percent of Medicaid recipients were up to date on breast cancer screenings, 76 percent on colorectal and cervical cancer screenings. In contrast, a far smaller share of uninsured individuals were up to date on screenings, at 43 percent, 57 percent, and 30 percent, respectively.[xix]

• Diabetes and High Blood Pressure Management: In 2023, Medicaid patients were more likely to have blood sugar within a healthy range than uninsured patients—67 percent compared to 54 percent. In addition, 83 percent of Medicaid patients had controlled blood pressure compared to just 75 percent of uninsured patients.[xx]
• Mortality Rates: Medicaid expansion led to lower mortality rates. In fact, the overall mortality rate fell by 3.6 precent for adults aged 20 to 64, and by 9.4 percent for adults aged 55 to 64.[xxi]

Children who Receive Medicaid Experience Improved Life Outcomes

Studies show that Medicaid coverage leads to significant life-long benefits for children.

• Better health outcomes. Medicaid coverage of children leads to lower infant mortality rates, higher birth rates, and better overall health than eligible children without Medicaid.[xxii] Medicaid coverage is also shown to reduce the number of emergency rooms visits and hospitalizations in adulthood.[xxiii]
• Lower likelihood of disabilities. Disability rates and applications for disability assistance were lower among adults who received Medicaid as children—compared to their counterparts who did not receive Medicaid coverage.[xxiv]
• Improved educational outcomes. While attending school, Medicaid recipients had lower absence rates due to illness or injury than their counterparts, and performed better academically.[xxv] Children who received Medicaid were more likely to graduate high school, graduate on time, enroll in college, and graduate from a four-year college.[xxvi]
• Increased earnings in adulthood. Child recipients of Medicaid experienced higher earning potential in adulthood.[xxvii] Research shows that children who received Medicaid contributed more in taxes and were less likely to use the EITC. [xxviii]

Enrollees Experience Improved Financial Wellbeing

Research finds that low-income individuals who receive Medicaid experience better financial outcomes.

• Reduced medical debt. Medicaid helps ensure people have access to health care they otherwise could not afford. For many low-income individuals and families, health care is an out-of-reach luxury. Without affordable health coverage, many choose to forgo seeing a doctor—routine check ups and screenings go by the wayside, and even serious health concerns may be put off due to cost. If a health concern escalates, an uninsured individual may have no choice but to seek care in an emergency room, threatening their ability to work, and incurring insurmountable medical debt. Studies show that Medicaid helps to reduce medical debt and unpaid bills.[xxix] In fact, medical debt fell by an average of $1,200.[xxx]
• Increased financial stability. Medicaid also helps to improve financial stability for eligible individuals and families.[xxxi] First, it enables individuals to maintain employment. Individuals with Medicaid are likely to effectively manage chronic conditions. As a result, recipients are better able to find and keep a job.[xxxii] Second, it enables recipients to spend their money on other essential goods, instead of health needs.
• Mitigated consequences of poverty. Medicaid helps to lessen the harms of poverty for enrollees. Research shows that in places that expanded Medicaid, recipients have experienced decreased income inequality, along with fewer evictions and bankruptcies. In fact, studies found that recipients were 11 percent less likely to be evicted and 13 percent less likely to overdraw on their credit cards.[xxxiii]

Health Systems

Medicaid funding helps health systems function. The Medicaid program contributes to lower overall health care costs, reduces the risk of hospital closures, ensures providers are compensated for the care they provide, and finances a large portion of Long-Term Services and Supports (LTSS).

Health Care Costs Fall with Access to Care

Medicaid coverage leads to lower health expenditures. Providing access to health care increases the likelihood that patients get screenings and preventative care, which enables early detection and better management of chronic conditions. The result? Less costly diagnoses and subsequent care.[xxxiv] For example, the average annual cost of breast cancer treatment diagnosed at stage one is $60,637, compared to $134,682 at stage four.[xxxv] In addition, preventative care and chronic disease management lower the risk a patient will need costly emergency care.[xxxvi]

Health Care Systems Receive Vital Support from Medicaid

Medicaid provides essential funding for hospitals and service providers across the country.[xxxvii] Because low-income individuals are more likely to be uninsured, they are often unable to afford medical expenses, meaning that their care would often be uncompensated. By giving health coverage to low-income individuals, Medicaid helps ensure providers get reimbursed for their services to patients in poverty.[xxxviii] Ultimately, this results in higher reimbursements, decreased uncompensated care, and increased revenues.[xxxix] In fact, data shows that Medicaid provides 1 in 6 dollars spent on health care.[xl]

Along with hospitals and health care providers, Medicaid supports employment in the health care industry—which is often one of the largest employers in communities.[xli] Medicaid is especially important in underserved and high poverty areas. In NewJersey, there are 117 Health Professional shortage areas and 42 Medically Underserved Areas.[xlii] Medicaid helps to fund hospitals in underserved areas, along with helping to “recruit and retain more qualified health professionals by providing adequate rates and supporting medical education and training opportunities.”[xliii]

Long Term Services and Supports Obtain Essential Funding through Medicaid

Medicaid is the largest payer for long-term services and supports in America. In fact, around 61 percent of all spending on LTSS is covered by Medicaid.[xliv] Other research shows that Medicaid provides one in two dollars spent on long-term services and supports.[xlv] Without this funding, many nursing homes and long-term care facilities would not be able to stay open; and many elderly individuals would go without essential care and assistance.  

Communities and Economies

Medicaid promotes strong communities and economies. Studies show that increased Medicaid coverage leads to better community health, improves access to care, decreases health disparities, and strengthens local and state economies.

Community Health and Access to Care Improve with Medicaid Coverage

Medicaid improves the overall health of communities and helps to maintain access to care while supporting health care professionals and providers.[xlvi] By reimbursing hospitals who serve a large number of low-income individuals, Medicaid helps ensure that hospitals remain open and continue to provide care in higher poverty areas. As such, Medicaid expands local access to care, especially in areas with higher poverty rates.[xlvii] This helps ensure equitable access to quality care for all residents, not just Medicaid recipients.

Health Inequities Decrease when Access to Care Increases

Unfortunately, racial disparities in health outcomes, access to care, and quality of care persist throughout the nation. Data shows that states with Medicaid expansion have smaller gaps in health coverage between people of color and their counterparts than in non-expansion states, indicating that Medicaid helps decrease disparities in access to care.[xlviii] Specifically, studies show that the gap in adults having trouble accessing care due to affordability decreased from 8.1 percentage points between white and Black adults and from 12.7 percentage points to 8.3 percentage points between white and Hispanic adults.[xlix] Further, studies show that Medicaid expansion was associated with decreased disparities in health outcomes. In particular, women of color saw improvements in maternal and infant health.[l]

Local and State Economies Benefit from Medicaid

Medicaid helps to strengthen state and local economies. Studies show that Medicaid has a multiplier effect, meaning that each dollar spent on Medicaid generates more than a dollar in increased economic activity.[li] Medicaid expansion resulted in significant positive benefits to state economies as increased federal dollars led to net savings for states.[lii] Additionally, Medicaid leads to increased employment, greater tax revenue at the state and local levels, and higher disposable income for recipients, enabling them to spend more on other essential goods.[liii]              

Major Cuts to Federal Medicaid Funding Will Harm New Jerseyans

Medicaid is essential for the health and wellbeing of millions of New Jerseyans—with far reaching benefits for individuals, communities, and the state. However, federal budget cuts threaten cripple the program. In March of 2025, the One Big Beautiful Bill Act was signed into law, which will cut an estimated $911 billion in federal Medicaid funding over the next 10 years.[liv] Funding cuts will result in loss of coverage, job losses, economic harm, and lower tax revenue. The New Jersey Department of Human Services (NJDHS) projects that 700,000 New Jerseyans would lose health coverage as a result.[lv] NJDHS reports that loss in health coverage would occur due to changes in eligibility and procedural barriers.[lvi] The cuts will also impact the state’s health care sector, in which one in 10 New Jerseyans are employed.[lvii]

• Medicaid Funding: Over 10 years, federal spending is projected to decrease by 18 percent in New Jersey, totaling $29 billion.[lviii]
• Job Losses: New Jersey is estimated to lose a total of 19,300 jobs due to federal cuts to the Medicaid budget. Projections indicate that 10,400 of the job losses will be in direct health sectors, while 8,900 will be in other job sectors.[lix]
• Economic Harms: The Center on Budget and Policy Priorities (CBPP) projects that New Jersey’s economic output will decline by 3,609,200,000 over the next ten years. CBPP also estimates that the state’s GDP will fall by $2,257,700,000 over the period.[lx]
• Tax Revenue: CBPP estimates that New Jersey will lose $194,200,000 in state and local tax revenue.[lxi]

Reductions in Medicaid will Disproportionately Impact Vulnerable Populations

Medicaid cuts will disproportionately impact seniors and individuals with a disability. Both groups are likelier to live on a fixed income, have high-cost health needs, and utilize Long-Term Services and Supports covered by Medicaid.[lxii] In New Jersey, over half (51 percent) of all Medicaid spending is on elderly or disabled individuals.[lxiii]

People of color are more likely to be negatively impacted.[lxiv] PRI’s analysis of data from the U.S. Census Bureau shows that Black and Hispanic residents are more likely to rely on Medicaid for health coverage. Additionally, analysis by the Economic Policy Institute finds that Black and Hispanic workers are less likely to work in a job that provides health insurance, and consequently, more likely to rely on Medicaid. What’s more? They are more likely to work in a hazardous or dangerous job, threatening their health.[lxv] Further, women of color make up a disproportionate share (48 percent) of the direct care workforce, which is heavily reliant on Medicaid funding.[lxvi] These jobs are at significant risk due to changes to the Medicaid budget, meaning job losses due to cuts will have a greater impact on women of color.[lxvii] Consequently, funding cuts will disproportionately harm Black and Hispanic New Jerseyans.  

[1] Disproportionate Share Hospital payments are “supplemental payments from state Medicaid programs and the federal government to qualifying hospitals that serve a high proportion of low-income patients. These payments help offset the hospitals’ higher costs and financial shortfalls associated with providing care to vulnerable populations, who often have lower reimbursement rate or are unable to pay for services.” (Source: Medicaid.gov)

https://public.tableau.com/views/2025-18-64TableFPL/Children?:language=en-US&:sid=&:redirect=auth&:display_count=n&:origin=viz_share_link