WASHINGTON — A health care fund Congress created to cover the expected losses from federal cuts in President Donald Trump’s signature budget law is falling well short.
New Jersey will receive about $147 million this year from the fund — the least of any U.S. state. Republicans who represent large, rural states created the fund to blunt cuts to Medicaid, a national health insurance system.
“New Jersey is last in the nation for rural health funding under a system designed by the Trump administration to punish states that protect seniors, kids, and working people, and the $147 million New Jersey received doesn’t come close to what the state is losing from Republican Medicaid cuts,” Rep. Frank Pallone (D-6th) said in statement to NJ Spotlight News.
A spokesperson for the Centers for Medicare and Medicaid Services, which administers the fund declined to provide an on-the-record comment to NJ Spotlight News about why New Jersey received the least funding.
“The state hopes to receive its first round of funding in the coming weeks,” said Tom Hester, a Department of Human Services spokesman, adding that the funding could reach as much as $735 million in the next five years.
That funding will cover a sliver of the estimated $3.6 billion annual cut for health care services in New Jersey due to the new law signed by Trump and approved by the Republican-led Congress, according to an estimate from the state Department of Health Services.
The significant health care shortfall is one of several financial body blows Congress and Trump have dealt to New Jersey, a state that pays significantly more in taxes than it receives from the U.S. government.
Nationally, the law cut about $1 trillion in funding for Medicaid, which covers the poor and the disabled, and about $285 billion in food aid over the next decade.
This Congress has separately stalled on a different health insurance topic: the extension of Obamacare tax subsidies, which lowered premiums and expanded coverage nationwide.
All Democrats in Congress and a few Republicans, including Reps. Jeff Van Drew (R-2nd) and Tom Kean Jr. (R-7th), have indicated they would like to extend the subsidies, though because the parties disagree, an extension will almost certainly not occur this year.
After those subsidies expired on Jan. 1 of this year, premium payments rose about 16% on average in New Jersey.
Susan Ochs, acting commissioner of the New Jersey Department of Banking and Insurance, said tens of thousands of people who were enrolled in under Obamacare coverage have dropped off.
Together, these three elements — cuts to Medicaid and food aid in the Supplemental Nutrition Assistance Program (SNAP), and the lapse of health insurance subsidies — are reshaping the budget outlook in the early days of the Sherrill administration.
“The Trump administration is recklessly slashing critical programs –from health care and housing, to food aid and foster care, schools and infrastructure,” Sherrill said Tuesday in her budget address in Trenton. “And, yes, Trump’s massive cuts are blowing an immediate hole in our budget, hurting New Jerseyans.”
To counteract federal cuts, Sherrill proposed $100 million in state funding for New Jersey counties to meet new Medicaid and SNAP requirements.
Sherrill’s budget proposes $7.2 billion in funding for New Jersey’s Medicaid program.
To cover new costs of carrying out SNAP under the new federal law, which cut the federal share of administrative costs from 50% to 25%, the state government will step in to “assume this $71 million burden on behalf of counties,” a summary of Sherrill’s budget proposal says. That budget must be approved by the Legislature and be in place before July 1.
After a series of backroom deals to bring on reluctant Republicans, Congress last summer passed the multi-trillion-dollar tax law that is rippling this year into state budgets from coast to coast.
Perhaps the most substantial of those deals — to create a rural health fund — Republican leaders brought Alaska’s Lisa Murkowski, a fellow conservative with an independent streak, on board.
“They were just trying to find any and all ways to just give Alaska more money and resources,” Sen. Andy Kim (D-NJ) said after the vote. “Whatever they can throw Murkowski’s way.”
The fund has two halves. One half is divided among all 50 states evenly. The other half appears to be divided in part on land mass.
This year, Alaska received the second largest award under the fund: $272 million.
“Alaska likely received a relatively large award at least in part because a portion of the fund was distributed to the five largest states based on land area,” researchers KFF, a nonpartisan health policy research, polling, and news organization wrote after the Trump administration announced the first round of funding. “New Jersey, Connecticut, and Rhode Island are receiving the smallest awards in the first year. These are all states with relatively small rural populations.”
Shortly after the funding was announced, the National Republican Campaign Committee, a political organization that works to elect Republicans to the House, touted Kean’s “fierce advocacy” in obtaining the money.
“Tom Kean, Jr. continues to show that he is laser focused on what matters to New Jersey families,” Maureen O’Toole, a spokeswoman for the group, said in a statement released in January. “Delivering quality, accessible healthcare is a critical win for New Jersey, and voters won’t forget it.”
Last year, Kean voted for the law that pulled billions in dollars out of the state he represents. Kean’s office did not respond to a request for comment on the funding issue.
Before Congress passed the law last summer, Democrats targeted Kean, a member of the powerful House Energy and Commerce Committee, as a potential swing vote.
One California Democrat invited a guest from Kean’s district, a woman with cerebral palsy, a condition that affects movement and posture, to a key committee vote.
Pallone, the top Democrat on Energy and Commerce, which has oversight over health policy, said the “new Republican ‘program’ is merely an exercise in covering their backsides” after cutting national health funding.
