What’s New?

Big Medicaid Changes Coming Following Trump’s July 4th Budget Bill

Posted on July 24, 2025

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Mary Coogan
President/CEO

Many continue to analyze the potential impact of the One Big Beautiful Bill Act that President Trump signed on July 4 (hereinafter referred to as HR1). HR1 provisions impacting New Jersey's Medicaid population were shared at the NJ Medicaid Assistance Advisory Council (MAAC) meeting on July 17. Materials from this and other MAAC meetings are available on the MAAC website

It is not yet clear what adjustments New Jersey may need to make to NJ FamilyCare or state benefits as the new requirements are implemented, with some changes taking effect immediately and others over the next few years. Please read the statement from NJ Department of Human Services Commissioner Sarah Adelman to appreciate the breadth of changes to HR1 makes to Medicaid.

Here is what we know about changes to federal Medicaid funding
A primary goal of HR1 is to save $800 billion over the next 10 years in federal Medicaid spending. These savings will be achieved by imposing additional requirements to enroll or maintain coverage, which will likely result in recipients of health coverage through state public health insurance programs, such as NJ FamilyCare, losing their coverage. Reducing the number of New Jersey citizens enrolled will, in turn, decrease the amount the federal government pays to states to support public health insurance programs and other Medicaid-funded services. 

Every state has a public health insurance program, such as NJ FamilyCare, funded with state and federal Medicaid and Children's Health Insurance Program (CHIP) dollars. Currently, nearly 20% of New Jersey residents, including over 860,000 children, access healthcare through NJ FamilyCare, and almost 550,000 working-age adults are enrolled through the Affordable Care Act's Medicaid expansion. This Medicaid expansion population is the focus of many of the new federal requirements. 

Federal Medicaid matching payments to states for qualified medical services are based on the Federal Medical Assistance Percentage (FMAP). The FMAP varies by state and is computed from a formula that takes into account the average per capita income for each state relative to the national average. New Jersey is one of 10 states that benefits from the current law, which sets a minimum federal match level at 50%. Specific categories of health insurance have different levels of FMAP. CHIP receives a 65% federal match, and the Medicaid expansion population gets a 90% federal match. According to the New Jersey Department of Human Services, "the federal government assumes ~60 percent ('blended share') of the cost of NJ FamilyCare":  

      • 90% of the cost for low-income adults covered under the Affordable Care Act
      • 65% of the cost for moderate- to low-income children under CHIP
      • 50% of the cost for most other NJ FamilyCare members

NEW Medicaid Work Requirements and Eligibility Redeterminations
The law requires states to condition Medicaid eligibility for individuals ages 19 to 64 in the Medicaid expansion population on working or participating in qualifying activities, such as education or volunteer services, for at least 80 hours per month. Certain adults, including pregnant or postpartum members, former foster youth up to age 26, parents with children age 13 and under, and those who are "medically frail," are exempt from the requirement. If a person is denied or disenrolled from NJ FamilyCare for failing to meet their work requirements, they are also ineligible for subsidized Marketplace coverage.

Under the new law, NJ FamilyCare renewal determinations for most of the adults enrolled through Medicaid expansion scheduled on or after December 31, 2026, must be conducted every six months. Thus, most of these adults will need to prove they meet the work or community engagement requirement twice a year. This change will result in an additional workload for state and county workers who handle eligibility determinations. States demonstrating a good faith effort to comply and making progress may have until December 31, 2028, to fully implement the change. 

The New Jersey Department of Human Services estimates that up to 300,000 eligible residents may lose, or fail to obtain, NJ FamilyCare coverage due to new bureaucratic barriers, many of which stem from the difficulty in producing the required documentation. Up to 50,000 adults could lose coverage because they are unable to provide the necessary documentation to comply with the work requirement. This may result in $400 million in lost federal funding to New Jersey.  

Out-of-Pocket Costs Imposed on all Medicaid Enrollees
All states currently have the option to impose out-of-pocket costs such as premiums and copayments on some Medicaid enrollees. As of October 2028, states must charge Medicaid enrollees with family incomes between 100% and 138% of the federal poverty level (FPL)–which is $15,650 for a single adult who qualifies for the program based on income alone–up to $35 per healthcare service. Certain services and providers are exempt from this cost-sharing obligation, including prenatal care, pediatric care, primary care, emergency care, and care delivered by federally qualified health centers or certified community behavioral health clinics that provide mental health care or substance use disorder services. The cost-sharing will be capped at 5% of a family's household income.

Under current law, undocumented immigrants are not eligible for Medicaid coverage. Several states, including New Jersey, use state-only funds to provide health coverage to children, regardless of immigration status–as long as the household income meets the eligibility requirements. Initial budget reconciliation proposals sought to reduce the federal Medicaid match for these states. The Senate parliamentarian ruled that this provision cannot be enacted as part of the budget reconciliation process. However, as of October 1, 2026, in the adult population, only lawful residents, Cuban/Haitian entrants, and Compact of Free Association migrants from certain Pacific Island nations will qualify for Medicaid. Approximately 15,000 to 25,000 individuals in New Jersey will lose Medicaid coverage. 

Provider Taxes
Currently, the state assesses a tax on hospitals, providers, and health plans of up to 6% of revenue, which is eligible for a federal match. New Jersey then reinvests these funds into our healthcare system. For fiscal year 2026, this assessment is projected to generate approximately $875 million in federal revenue. HR1 requires that, starting in fiscal year 2027, the cap of 6% be gradually reduced to 3.5% by fiscal year 2032. Nearly $400 million will be lost as a result of this reduction. Fourteen counties utilize the provider tax to secure additional federal funding for their hospitals. The state estimates that by 2032, approximately $800 million of this federal revenue will be lost.

Emergency Medicaid
Emergency Medicaid offers limited coverage for individuals who lack a qualifying immigration status and covers emergency services delivered in an inpatient hospital setting. New Jersey's federal match starting in October 2026 will be reduced from the current 90% match to the 50% base rate. New Jersey is likely to lose in the range of $446 million in annual federal Medicaid funding.

Clearly, HR1 will have a devastating impact on NJ FamilyCare, hospitals throughout the state, and other Medicaid-funded programs. These cuts may also impact school-based, health-related services and possibly behavioral health services provided through our state’s Children’s System of Care. 

ACNJ is working with other organizations that serve those enrolled in NJ FamilyCare to help educate members about new requirements, and with state officials to ensure compliance as these requirements are implemented. For more information, contact Mary Coogan at mcoogan@acnj.org

Redefining Repayment: The Future of Student Loans

Posted on July 24, 2025

Screenshot
Authored by:
Adriana Bland
Deborah T. Poritz Summer Public Interest Legal Fellowship Program, LSNJ

For more information on positive youth development efforts, contact Isaiah Fudge at Ifudge@acnj.org.

Access to higher education has evolved significantly, as doors have opened to welcome students from all walks of life. Institutions that were once only available to the wealthy or elite, are now available to all genders, ethnicities, cultures, and socioeconomic statuses. Increased financial aid, perceptions about the importance of higher education, and flexibility in curriculum and technology have all contributed to increased enrollment in college and graduate school programs. However, these strides may be in jeopardy with HR1. HR1 will significantly impact students’ and families’ decisions about attending college and/or graduate school in the upcoming years. HR1 changes student loan repayment options, sets new borrowing limits, and alters federal financial aid. 

Terms to Know:

  • Student Loans - money borrowed that must be paid back with interest.
  • Direct Subsidized Loans - a federal student loan where a borrower isn’t generally responsible for paying interest while in an in-school, grace, or deferment period. 
  • Direct Unsubsidized Loans - offers students a low, fixed interest rate and flexible repayment terms. It’s not based on financial need.
  • Direct PLUS Loans - available to graduate students and parents of dependent undergraduate students for which the borrower is fully responsible for paying the interest regardless of the loan status.
  • Repayment Options - different ways a borrower can pay back a loan or debt.
  • Forbearance - allows borrowers to temporarily stop making monthly student loan payments or temporarily make smaller payments for certain situations (financial difficulties, medical expenses, change in employment, other acceptable reasons).
  • Free Application for Federal Student Aid (FAFSA) - a form required to be eligible for federal student aid (i.e., federal grants, work study, loans) and must be completed every year.
  • Pell Grants - a federal grant for undergraduate students with financial need, designed to assist students from low-income households. 

FAFSA and Pell Grants
Starting in 2024, students and families who were completing the FAFSA were required to list certain assets (i.e., family farms, fishing enterprises, small businesses, etc.). As of July 1, 2026, these assets will no longer be part of the federal financial aid eligibility calculation, making it easier for some individuals to qualify for aid. 

Another change under HR1 will greatly impact Pell Grants. The Federal Pell Grant program is the largest federal grant program available only to undergraduate students who demonstrate exceptional financial need on their FAFSA. Unlike loans, Pell Grants typically do not need to be repaid. Also, award amounts tend to change yearly–for the 2025-2026 award year, students could receive a maximum of $7,395. Under HR1, the use of Pell Grants has been expanded, allowing individuals to use their award money for non-degree programs, such as job training, at accredited institutions starting July 1, 2026. While this change expands access to the workforce for low-income students, if a school awards a student financial aid that equals or exceeds the cost of attendance, that student will not receive the Pell Grant. 

New Borrowing Limits
Both graduate students and their parents will be limited in how much money they can borrow for student loans. Before HR1, students and their families could borrow up to the school’s cost of attendance, minus other financial aid received. The use of the federal Grad PLUS loan program and federal Parent PLUS loan program made college and graduate school more accessible. However, effective July 1, 2026, parents will only be able to borrow $20,000 per year, at a lifetime cap of $65,000 per student. Additionally, the Grad PLUS program will no longer accept new borrowers and will impose caps. For professional school degrees, borrowers will be limited to $50,000 per year and $200,000 total (not including undergraduate debt). For other graduate degrees, the cap will be $20,500 per year and $100,000 total, also not including undergraduate debt. For graduate student borrowers this is especially troubling as little financial aid is often available for graduate school. Taking away the Grad PLUS program makes it more difficult for graduate students to afford tuition and/or living expenses. 

Student Loan Repayment Options
HR1 will streamline student loan repayment options, however, borrowers may pay more than before. Beginning on July 1, 2026, borrowers will have the choice between a “refashioned” standard repayment plan or the Repayment Assistance Plan (RAP). The standard repayment plan requires fixed payments that are made over a term of years based on the amount of the loan. The larger the loan, the longer the term; with payments ranging from 10 to 25 years. RAP is most similar to what some borrowers know as the Income-Driven Repayment (IDR) plan, tying payment amount to a borrower’s adjusted gross income. These payments will range anywhere from 1% to 10%, while previously existing IDR plans will cease to exist for new borrowers. 

HR1 also eliminates the Saving on a Valuable Education (SAVE) plan, the Biden-Era repayment plan that was the most affordable option for many borrowers. Almost 8 million student loan borrowers are currently under this plan which will be defunct starting August 1, 2025. Under SAVE, payments were based on 5% of a borrower’s income. Now, with the repayment plan changes, some borrowers will not be able to afford their payments. Further, HR1 eliminates loan deferments for individuals experiencing economic hardship and unemployment and decreases how long students can be in forbearance from 12 to 9 months.

Current students and those assessing higher education affordability must stay on top of their loans and further information about how student loans will be impacted by HR1. Low-income students, and those of color especially, may see significant reductions in access to college and graduate school. While students will still have access to private loans, these loans often have much higher interest rates, reduced protection for borrowers, and sometimes require certain credit scores. One thing is for sure, borrowers will be forced to make tough choices regarding their degrees.

Alert: State Budget Shortfall Cuts Child Care Access For Thousands of Families

Posted on July 23, 2025

Child Care Budget Shortfall

Thousands of New Jersey families will lose access to child care assistance due to a $30 million funding gap in the state budget.

$30M

State Budget Shortfall

Aug. 1

Changes Take Effect

6%

Higher Co-Payment Rate

New Applications Paused

You may have heard about the recent changes to New Jersey’s Child Care Assistance Program (CCAP), which is administered by the Department of Human Services, Division of Family Development (DFD), and distributes subsidies to providers through their local Child Care Resource and Referral (CCR&R) agency. This is the result of a $30 million state budget shortfall needed to fully fund the program.

These changes are devastating but your voice still matters. While the state budget has been finalized, lawmakers need to hear how it’s hurting your business, your staff, and the families you support.

SPEAK OUT NOW! Your stories can spark change and shape future funding opportunities.

Just because changes have been made doesn’t mean they are permanent. You can still make an impact.

WANT TO DO MORE?

📞 Call or email your State Assemblymembers and Senators today and tell them how these changes affect your program and the families in your care.

View script to call your legislators

I'm [Your Name], director of [Center Name] in [Town], where we serve [X] children—[X]% of the children we serve rely on subsidy. The recent CCAP changes are deeply harmful. Please prioritize funding and call a special session now.

📣 Encourage parents to speak up too. Volume and personal stories matter.

📝 ACNJ would like to hear about parents' and child care providers' experiences accessing the New Jersey Child Care Assistance program to understand the challenges they face and inform our advocacy efforts.

Key changes that will significantly impact both providers and families across New Jersey starting August 1, 2025:

Co-Payment Increases:

  • New co-payments will take effect for families starting August 1, 2025, at the time of redetermination.
  • Most full-time co-pays will be around 6% of a family's income, although actual amounts will vary.
    • Families under 100% FPL will continue to have no co-pay.

No Changes for:

    • Children from families receiving Work First New Jersey (WFNJ) cash assistance.
    • Children involved in child protective services or post-adoption services.

Application Closure:

  • DFD will pause new applications and additional child applications for CCAP starting 11:59 PM on July 31, 2025.
  • Applications received before the deadline will be processed, and payments for all active cases will continue.
  • The online portal (https://mynjhelps.gov/home) and state child care websites will be updated to reflect these changes (https://www.childcarenj.gov/).

THIS REDUCTION IN SERVICES IS A DIRECT RESULT OF INSUFFICIENT FUNDING IN THE STATE BUDGET

The final New Jersey state budget did not include the additional $30 million needed to fully fund the Child Care Assistance Program (CCAP) and continue accepting new families. While CCAP received an $80 million increase, this fell $30 million short of what was required to maintain open enrollment and serve additional children from existing families.

It is essential to note that this additional funding would have been allocated from the state budget, not federal sources.

Unpacking the NJ State FY26 Budget on New Jersey’s Kids and Families

Posted on July 16, 2025

Highlights of FY26 State Budget Spending on Children and Families

The State Fiscal Year 2026 Budget was approved by the Legislature and signed into law by Governor Murphy before the June 30th deadline, with total appropriations of $58.8 billion and a projected surplus of $6.7 billion. The budget allocates resources, programs, and services that will benefit New Jersey residents in the upcoming year.

Advocates for Children of New Jersey (ACNJ) engaged throughout the process, advocating for critical investments that support children and families. Below are key highlights.

Child Care

  • $565.8 million in the NJ Child Care Assistance Program to help low-income families cover the cost of child care for children ages 0 - 13.

Public Preschool Expansion

  • $34.6 million in new funding to expand free, universal pre-K across New Jersey communities.
  • $10 million specifically to help launch new preschool programs.

K-12 Education

  • Fully funds New Jersey’s schools under the School Funding Reform Act (SFRA) for the second year in a row, with an additional $386 million in aid for FY 2026—the largest school aid contribution in state history.
  • $3 million in incentive grants to help school districts transition to phone-free learning environments, supporting academic success and student well-being.
  • $7.5 million in new grant funding for school districts to provide high-impact tutoring for students needing extra academic support.

Hunger and Food Insecurity

  • $30 million to maintain a minimum monthly $95 in SNAP benefits for approximately 40,000 households.
  • $85 million in aid for the state’s food banks and emergency feeding organizations.

Maternal Health

  • $10 million to ensure State employees can take parental leave at full pay to care for a newborn.
  • Nearly $36 million to expand Family Connects NJ, offering free home visitations for postpartum mothers and newborns.
  • Over $50 million—the single largest investment in New Jersey history—for women’s health care programs beyond state-sponsored insurance. This will provide safety-net family planning services, upgrade family planning facilities, and grow the reproductive health care workforce.
  • $5.2 million for the newly created Maternal and Infant Health Innovation Authority.

Child Health

  • Continued funding for Cover All Kids and NJ FamilyCare, projected to provide free health insurance coverage to up to 867,000 children.

Mental Health

  • Building a statewide system of mental health resources with $43 million for the NJ Statewide Student Support Services (NJ4S) Network.

Positive Youth Development and Other Supports

  • Approximately $20 million to maintain the Alternative Responses to Reduce Instances of Violence and Escalation (ARRIVE) Together program, which pairs police officers with mental health professionals when responding to mental health crises.

ACNJ will continue to provide post-budget updates as additional information becomes available. Stay tuned!

Update NJ Preschool Expansion

Governor Phil Murphy signed significant legislation to expand access to early childhood education on July 11, 2025.

“I Need to Go to Work, But I Can’t Find Child Care!”

Posted on July 11, 2025

cindy shields
Cindy Shields
Senior Policy Analyst for Early Childhood Education

This is a common cry across the country, and New Jersey is no exception. Families are struggling to find quality child care, and when they do, the cost is often unaffordable. What’s driving this crisis, and how do we begin to fix it?

A Broken Market

In other industries, companies might cut staff or raise prices to cope. But in child care, cutting staff isn’t an option due to licensing regulations. You need ample staff to maintain safe and nurturing learning environments. And raising tuition? Many families are already financially stretched to the limit.

Worse yet, there's no room to trim wages. Early educators, mostly women and disproportionately women of color, earn less than dog walkers, with a national average of just $15.41/hour according to the U.S. Bureau of Labor Statistics. Burned out and underpaid, many early care educators are leaving the field for less stressful, better-paying jobs in retail or warehouses. That means fewer open classrooms, longer waitlists, and even more pressure on parents trying to access and afford child care.

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The Cost of Child Care to Families

Wages account for about 80% of a child care center’s budget, leaving razor-thin margins to cover everything else. The pandemic pushed the child care industry past its breaking point.
Today, New Jersey families face impossible choices. The average cost of center-based care is:

  • $20,213 per year for an infant
  • $19,448 per year for a toddler

For a dual-income family earning the NJ average of $167,018, that’s 12% of their income; more than they might spend on housing or even college tuition. For a single parent earning the state average of $44,800, child care eats up 45% of their income.

NJ working class left behind high child care costs

By comparison, the U.S. Department of Health and Human Services recommends that families spend no more than 7%of their income on child care. Clearly, something is wrong.

A Squeeze on the Middle Class

In New Jersey, only families earning approximately $300,000 or more can afford the average annual cost of center-based infant care—about $20,000—without spending more than 7% of their income.

For families earning less than 185% of the federal poverty level (roughly $64,300 for a family of four), the New Jersey Child Care Assistance Program offers vital help covering child care costs for children up to age 13.

But New Jersey’s working middle class is being left behind. These families earn too much to qualify for assistance, yet far too little to absorb the staggering cost of child care. They’re falling through the cracks.

The burden often lands hardest on mothers, many of whom are pushed out of the workforce entirely. Parents are forced into impossible choices: pay for housing and food, or pay for child care. Too often, they are working multiple jobs just to get by, with no good options in sight.

Child Care Is Essential Infrastructure

New Jersey’s economy cannot function without child care. Without a stable child care system, the workforce suffers, and so does the economy.

But here’s the good news. By investing in early care and education, New Jersey could save upwards of $3.6 billion annually. With a return on investment of $7–$13 for every dollar spent, child care is not just a moral imperative; it’s a smart financial strategy.

Our children deserve safe and enriching child care environments with well-compensated educators. Our working, economically contributing families deserve choices, not compromises.

This Election Year: Ask the Candidates
As we head to the polls, child care must be a central issue in every candidate’s platform. We urge every voter to ask:

  • What will you do to ensure equitable access to high-quality early care and education for all working families in New Jersey?
  • How will you support the child care workforce to ensure they are qualified, respected, and fairly compensated?
  • What policies will you champion to preserve and grow options for families, especially given the challenges child care providers face today?

New Jersey’s children, families, and economy are depending on it.