Good evening, Chair Pintor Marin/Sarlo and members of the Committee. Thank you for this opportunity to provide my testimony in opposition to A5324/S4533. My name is Jennifer Spiegel, and I am a policy analyst at New Jersey Policy Perspective (NJPP). NJPP is a non-partisan, non-profit research institution that focuses on policies that can improve the lives of low- and middle-income people, strengthen our state’s economy, and enhance the quality of life in New Jersey.
New Jersey Policy Perspective strongly supports raising additional revenue to protect NJ FamilyCare and preserve access to health care for New Jersey families. The state must find sustainable revenue to maintain coverage, especially as federal Medicaid funding faces new threats.
NJPP opposes this particular approach and urges the committee to reconsider the structure of any fee designed to support Medicaid — one that raises revenue without creating new risks for the workers the program is meant to serve.
The goal of raising revenue is right. The structure of this proposal is not.
By assessing employers based on the number of workers enrolled in NJ FamilyCare, the legislation creates incentives that could harm the very residents the Medicaid program is intended to help. A fee tied to individual workers’ health coverage status risks discouraging employers from hiring workers who have or may need Medicaid coverage. Employers may start screening out applicants they perceive as likely to enroll in NJ FamilyCare, creating new barriers for low-income workers and families seeking employment.
The proposal may also discourage eligible residents from enrolling in health coverage. If workers believe their enrollment could create costs for their employer or jeopardize employment opportunities, they may hesitate to sign up for benefits for which they are legally eligible. This is especially true as the federal government is cutting access to Medicaid with new work requirements. Public policy should be making it easier for residents to enroll, not harder.
Additionally, by applying the assessment to workers’ dependents who are enrolled in Medicaid, this proposal undermines the tremendous progress New Jersey has made through the Cover All Kids initiative in expanding health coverage for children regardless of their family’s circumstances. For many working families, employer-sponsored insurance is simply not affordable because dependent premiums and cost-sharing far exceed what their household budgets can absorb. Medicaid often provides the only affordable, comprehensive coverage option for children even when a parent is employed. New Jersey should not be penalizing families who are prioritizing health care coverage for their children.
The proposal also fails to recognize the unique challenges facing nonprofit employers. Many nonprofit organizations operate on thin margins and already struggle to offer affordable health insurance because of limited funding and rising health care costs. This legislation should take into consideration the variety of types of employers that are going to be impacted and make sure that organizations like nonprofits providing essential services in communities across New Jersey are not going to be harmed.
The assessment reinforces harmful stigma around Medicaid by treating workers enrolled in NJ FamilyCare as a problem to be solved rather than residents accessing an essential public program. NJ FamilyCare provides critical coverage for working families across the state, and workers who rely on Medicaid should not be viewed as a financial liability.
This proposal does not expand coverage or improve affordability for the residents who still lack it — and New Jersey has no shortage of those residents.
The state already has more effective tools available to generate comparable revenue — and examples to learn from. Massachusetts uses broader-based health care financing that spreads responsibility across the workforce rather than targeting workers enrolled in public health programs. Closing Corporation Business Tax loopholes, reducing ineffective business tax subsidies, and strengthening enforcement against corporate tax avoidance would provide a broader and more sustainable revenue base — without putting workers at risk.
New Jersey has the resources to protect NJ FamilyCare and ensure that all residents have access to quality, affordable health care. Achieving that goal will require asking profitable corporations to contribute more through broad-based, sustainable revenue sources — not through a per-employee Medicaid assessment that would harm the workers it is intended to help.
Thank you for your time and consideration.
