NJ Officials Urge Congress to Extend Expiring Health Insurance Tax Credits, Warn of Sharp Premium Hikes

Loss of enhanced federal subsidies would raise costs for over 450,000 New Jerseyans and strip away more than $500 million in annual financial assistance.

New Jersey officials are calling on Congress to act swiftly to extend enhanced federal premium tax credits that have made health insurance more affordable for hundreds of thousands of residents. In a letter to the state’s Congressional delegation, Department of Banking and Insurance Commissioner Justin Zimmerman warned that failure to renew these subsidies could result in premium increases for more than 450,000 New Jerseyans, threatening access to affordable care and undermining recent enrollment gains.

The enhanced premium tax credits, first introduced under the American Rescue Plan Act of 2021 and extended through the Inflation Reduction Act of 2022, are set to expire unless Congress intervenes. These subsidies have been instrumental in supporting the success of Get Covered New Jersey, the state’s official health insurance marketplace. Enrollment in the program has grown 108 percent since its launch, reaching a record 513,217 enrollees in 2024.

Without federal action, New Jersey would lose more than $500 million in annual federal support used to reduce premiums. As a result, 88 percent of marketplace enrollees—454,016 residents—would face premium increases, some exceeding 200 percent.

“Since establishing the marketplace, New Jersey has worked to maximize financial support to reduce health insurance costs — opening the door to quality, affordable coverage for hundreds of thousands of residents, and, as a result, Get Covered New Jersey has seen extraordinary enrollment numbers. If these enhanced premium tax credits are allowed to expire, nearly half a million New Jersey residents would see their cost of health insurance skyrocket,” said Commissioner Zimmerman. “We have seen the significant impact these expanded tax credits have had on lowering the cost of health coverage for New Jersey residents and their families — more people than ever are now covered by health insurance, and they are paying less for it. I strongly urge Congress to prevent the cost of health insurance from increasing for hundreds of thousands of New Jerseyans and work toward renewing or making permanent these vital tax credits as soon as possible on behalf of residents who rely on them for quality, affordable health coverage."

Impact on New Jersey Families

Currently, nearly half of all enrollees pay $10 or less per month, with 43 percent paying $1 or less, a dramatic improvement from before the credits were expanded. The rollback would disproportionately affect older adults, working-class families, and those approaching Medicare eligibility. Key estimates include:

• A Union County couple in their early 60s with an income of $83,386 would see premiums increase by $17,439 annually—a 161 percent increase consuming over a third of their income.

• A family of four in Ocean County earning $131,386 would face a $20,189 increase, a 239 percent spike, consuming 23 percent of their household income.

• On average, individuals would see a 110 percent increase, or $1,260 more per year, with families paying $4,168 more annually.

Zimmerman and 19 other state-based marketplace leaders have submitted a joint letter urging federal lawmakers to preserve the tax credits, arguing that doing so is vital to maintaining coverage gains and avoiding destabilization of state insurance markets.

“Congress has the power to prevent the inevitable increases in health insurance costs for New Jersey residents,” Commissioner Zimmerman wrote. “Since its launch, the state invested in GetCoveredNJ’s growth, and, as a result, we have achieved the goal of providing consumers with the quality, affordable health insurance that they deserve. Possible inaction by Congress coupled with the proposed federal rule places at risk the success of New Jersey’s program and access to coverage for more than half a million consumers."

Additional Federal Proposals Could Further Restrict Access

Compounding concerns, the Centers for Medicare and Medicaid Services recently proposed changes that would reduce the annual enrollment period from three months to six weeks. The shorter window could disproportionately impact low-income residents and those with limited access to enrollment assistance. The rule also proposes to restrict eligibility for Deferred Action for Childhood Arrivals (DACA) recipients.

New Jersey has voiced opposition to the changes, submitting a formal comment letter warning that the rule could undermine the state's initiatives aimed at expanding affordable coverage, especially for vulnerable populations.

The Broader Significance

The expiration of enhanced tax credits, paired with restrictive federal policy changes and potential cuts to Medicaid funding, could reverse years of progress in expanding health coverage. Since taking effect, enhanced subsidies have helped ensure that more than three-quarters of current enrollees could afford insurance for the first time.

Open enrollment for Get Covered New Jersey occurs annually from November 1 to January 31. Outside that period, residents can enroll only under certain circumstances, such as pregnancy, marriage, job loss, or through the Expanded Access Special Enrollment Period for low-income households.

Plans offered through the marketplace provide comprehensive benefits, including preventive care, emergency services, prescription drugs, and maternity and pediatric care. Coverage is guaranteed regardless of pre-existing conditions.

State officials stress that Congressional renewal of the tax credits is essential to maintaining health coverage affordability and access for working families, seniors, and individuals across the state.