OBBBA Impact

New Jersey officials have spent the past year modeling what it looks like when a state absorbs a trillion-plus dollars in federal healthcare and food-assistance cuts. A year in, those projections are starting to feel like reality.

The One, Big, Beautiful Bill Act, signed by President Trump on July 4, 2025, cut federal Medicaid funding by roughly $1 trillion nationwide and food assistance by close to $200 billion, financed partly by making earlier tax cuts permanent. New Jersey didn't gain much on the tax side of that trade, and it is absorbing the spending cuts almost in full.

State officials estimate as many as 375,000 New Jerseyans could lose Medicaid coverage outright, with another 454,000 paying more for insurance through GetCoveredNJ, the state's ACA marketplace. Much of that comes down to paperwork rather than eligibility: starting this fall, adults ages 19 to 64 must log 80 hours a month of work, school, or volunteering to keep NJ FamilyCare coverage, and check back in every six months instead of annually. Immigrants without citizenship status lose eligibility altogether.

Hospitals take a separate hit, with the state projecting a $3.3 billion drop in federal funding for hospitals and public health programs, plus at least $360 million less for the state budget overall. SNAP recipients face similar new work rules, and starting in 2028, New Jersey will owe a share of SNAP benefit costs for the first time, as the state's share of administrative costs jumps from half to three-quarters.

Governor Mikie Sherrill's plans to spend money to keep people enrolled in the program, with space allocated into the budget she signed earlier this month. This involves $7.2 billion in state Medicaid funding and over $10 million for enrollment technology. She also wants a fee on large employers whose workers end up on Medicaid, which is expected to raise $145 million a year.

On the other hand, New Jersey’s middle and upper-class residents will benefit; the SALT deduction cap climbs to $40,000 through 2029, though it phases out above $500,000 in income and disappears above $600,000.