Commissioner Stephen Cha told lawmakers that federal Medicaid and SNAP changes could increase costs for New Jersey, counties, providers, and residents who rely on health coverage or food assistance.
MORRISTOWN, NJ – New Jersey Human Services Commissioner Dr. Stephen Cha told the Senate Budget and Appropriations Committee on May 6, 2026, that federal changes affecting Medicaid and the Supplemental Nutrition Assistance Program could create new eligibility barriers, funding losses, and administrative costs for the state and counties. The testimony was part of the department’s presentation on the proposed Fiscal Year 2027 budget.
The Department of Human Services is New Jersey’s largest state department and supports 2.1 million people, including about one in five New Jerseyans and one in three children, according to Cha’s testimony. The department administers or supports programs including NJ FamilyCare, SNAP, aging and disability services, behavioral health supports, and child care assistance.
Cha said the budget comes amid “significant uncertainty” tied to federal changes under H.R. 1, which the department said will reduce funding, narrow eligibility, and increase administrative responsibilities for the state, counties, providers, and partner agencies. He said the changes could affect tens of thousands of families by adding barriers to health care, nutrition assistance, and related services.
For Medicaid, the department cited estimates that more than 300,000 New Jerseyans could lose NJ FamilyCare because of new federal requirements. If state and county systems work perfectly, models estimate the reduction could be 165,000 or lower, according to the testimony. Cha also said provider cuts could reach $2.6 billion a year in later years, while New Jersey could lose $6 billion in annual federal health care revenue once the changes are fully implemented.
The department also warned of new SNAP pressures. More than 800,000 New Jersey residents rely on SNAP, and federal provisions could reduce monthly participation in New Jersey by as many as 47,000 people between 2025 and 2034, according to the testimony. The department said SNAP assistance reductions could amount to $150 million this state fiscal year, with an estimated $240 million economic impact.
The testimony also flagged a county-level cost shift. Beginning in 2027, Cha said the federal government will reduce its share of SNAP administrative costs to 25%, leaving counties responsible for 75%. He said that the shift could place financial pressure on counties and affect property taxes or service capacity. The governor’s proposed budget includes $71 million to support county social service agencies and help process applications efficiently.
The budget proposal also includes $34.6 million to offset reduced federal Medicaid funding for emergency services and more than $10 million to strengthen coordination among state agencies, counties, and vendors ahead of new work requirements and more frequent eligibility checks. The department said the goal is to prevent eligible residents from losing benefits because of paperwork, missed notices, or administrative delays.
Other Human Services budget items include an additional $18 million for the Child Care Assistance Program, which the department said would support about 77,500 children under current enrollment trends. The budget also supports a $30.2 million SNAP minimum benefit, $397 million in long-term care growth under NJ FamilyCare, $22.4 million for pharmaceutical assistance programs, and $28.8 million for the 9-8-8 behavioral health crisis response continuum.