NJ human services chief warns Congress’ proposed Medicaid/SNAP cuts could force billions in state cuts; budget keeps investments under current law

Commissioner Sarah Edelman of the New Jersey Department of Human Services told the Assembly Budget and Appropriations Committee that the governor’s proposed FY2026 human services budget is built on current federal rules, and warned that pending congressional proposals to trim Medicaid and SNAP would force painful statewide cuts if enacted.

In an opening statement, Edelman said congressional proposals under discussion seek roughly $880 billion in Medicaid savings and $230 billion in food‑program savings over 10 years and that, depending on the package enacted, New Jersey could lose an estimated $2 billion to $10 billion in federal Medicaid funding annually. She said New Jersey Medicaid is a roughly $24 billion program composed of about $14 billion in federal funds and $10 billion in state funds.

The governor’s proposal does not assume those federal cuts, Edelman said; instead it reflects what the department recommends under existing federal law. But she cautioned that “if massive federal funding losses occur,” the state, the governor and the Legislature would need to work together to respond.

Why it matters: A large, sudden loss of federal Medicaid dollars would force the state to choose among reducing provider payments, narrowing eligibility or cutting covered benefits — steps that would affect hospitals, nursing homes, people who rely on long‑term supports and families that use SNAP.

What the budget includes: Edelman highlighted several targeted investments in the proposed plan: - Primary care reimbursement: About $45 million in combined state and federal funds would raise pediatric and adult primary‑care Medicaid rates from roughly 58% to about 70% of the Medicare fee schedule, a step toward the 80% benchmark CMS encourages. - Workforce and wage investments: The budget continues wage increases across several programs, including $18.6 million for the Personal Preference Program, additional funding for direct support professionals and $1.8 million for child‑care worker wages. - Long‑term care and nursing facilities: Continued investments include more than $192 million to meet growing Medicaid long‑term‑care needs, a continuation of last year’s $67 million increase for nursing facilities and an ongoing $50 million quality‑incentive payment program. - 988 crisis system: The department is proposing a 40‑cent monthly telecom fee projected to generate about $61 million annually to support the state’s 988 suicide and crisis lifeline; full, long‑term operation of the expanded 988 continuum is estimated at about $67 million per year at full implementation.

Federal grant disruption: Edelman told lawmakers the department is still managing the fallout from the March 24 federal decision to terminate nearly $11 billion in public‑health grants nationwide — about $350 million that had been slated for New Jersey — a move that halted services for some providers and is the subject of litigation.

Department posture and request: The commissioner said New Jersey is submitting federal approvals early and monitoring approvals from CMS closely. She urged legislators to press federal members of Congress to oppose proposed cuts and protect Medicaid and SNAP funding.

What’s next: The proposed budget will be negotiated by the Legislature. Edelman said the department stands ready to work with lawmakers, and that if federal rules change the state will need to pivot and seek legislative direction.

Speakers quoted in this article are drawn from the hearing: Commissioner Sarah Edelman, who presented the budget and fielded questions from the Assembly committee.