12 NJ Hospitals Could Face Closure After Federal Medicaid Cuts, New Report Shows

Twelve hospitals in New Jersey are among 446 across 44 states and Washington, D.C., facing a heightened risk of closing, cutting services or laying off workers due to federal medicaid funding cuts, according to a new report.

The cuts to Medicaid were included in the "One Big Beautiful Bill" signed by President Donald Trump on July 4, 2025.

The report by Public Citizen, a nonprofit consumer advocacy organization, says the law will cut $911 billion in federal spending on Medicaid and CHIP over 10 years, according to estimates from the Congressional Budget Office.

Currently, New Jersey provides Medicaid to adults and children who qualify based on their incomes via NJ FamilyCare, and uses Medicaid for Performcare, a system that connects children who have urgent psychological needs with providers.

Federal Medicaid requirements, approved to take effect next year, may shake 300,000 New Jersey residents out of the system, state officials have warned.

The analysis identifies hospitals as at risk if they had a Medicaid, SCHIP and low-income government program payer mix of at least 20 percent on average from 2022 through 2024 and negative net profit margins over that same period.

Hospitals At Risk

In New Jersey, Public Citizen identified these 12 hospitals at a higher risk of closing, cutting services, or laying off workers:

• Palisades Medical Center, North Bergen
• East Orange General Hospital, East Orange
• Inspiria Medical Center, Vineland
• St. Michael's Medical Center, Newark
• Capital Health Regional Medical Center, Trenton
• Bayonne Medical Center, Bayonne
• Clara Maass Medical Center, Belleville
• Trinitas Hospital, Elizabeth
• Robert Wood Johnson University Hospital, New Brunswick
• Monmouth Medical Center, Lakewood
• Hoboken University Medical Center, Hoboken
• Newark Beth Israel Medical Center, Newark

" While there is no immediate threat of closure or reduction in services, the report highlights the significant impact HR 1 has on local community hospitals, which already struggle with tight operating margins. Cuts in resources not only have an impact on the ability to deliver care, but they stymie economic growth and job creation. We join systems across New Jersey and the country in advocating for policies that once again make the required investments in healthcare providers," stated George Helmy, Executive Vice President, Chief External Affairs and Policy Officer for RWJBarnabas Health.

The report says communities served by the at-risk hospitals have larger shares of Black and Hispanic residents and people living below the poverty line than communities served by other hospitals.

It found that those hospital service areas were 20.2% Hispanic and 13.3% Black on average, compared with 13.0% Hispanic and 8.9% Black for other hospitals. Nearly 20% of the at-risk hospitals, or 85 facilities, serve high-poverty areas, according to the report.

New Jersey Closures, Cuts

The Garden State has already seen one hospital close recently, and another is looking to slash staff.

Hudson Regional Health, based in Secaucus, took over Bayonne, Christ Hospital in Jersey City, and Hoboken University Hospital after their prior owner filed for bankruptcy.

After Hudson Regional Health took over the three facilities in the summer, they said Christ Hospital — renamed Heights University Hospital — would have to close due to lack of funding. They had kept the emergency room open until last month, then closed that, too.

Additionally, Hudson Regional Health will issue notices to nearly 1,000 employees of Bayonne Medical Center by June 29, according to WARN notices filed with the state this month.

Addressing Medicaid Cuts

In Governor Mikie Sherrill's budget address in March, she floated changes that would increase the burden on corporations that employ people using Medicaid. She also talked about new mental health programs for children.

Sherrill's budget includes $7.2 billion in state funding for NJ FamilyCare, which provides health care to over 1.8 million residents, according to her office. The program is used by nearly half of the state's children, state officials said Tuesday

Congress also added a $50 billion Rural Health Fund to the law to "stabilize and strengthen rural hospitals and providers," according to the report. But the analysis says there is uncertainty about whether that funding will be enough to prevent closures or service reductions.

— With reporting by Caren Lissner