The expiration of federal subsidies for health insurance plans, at the center of a D.C. budget fight, is to blame for the coming increase, the state says. (Getty Images)
Premiums for health insurance plans purchased through the New Jersey marketplace will rise 174% next year because of the expiration of enhanced federal subsidies, according to the state Department of Banking and Insurance.
The staggering price hikes, which would come alongside market-driven rate increases of 17%, would kick in after the enhanced premium tax credits approved during the pandemic expire at the start of 2026.
“Consumers will soon be shopping and comparing health plans, and without these enhanced tax credits, they will be confronted by startlingly higher prices for coverage. We are significantly concerned that many households will be forced to choose plans with lesser coverage or choose no coverage at all as a result,” said the department’s commissioner, Justin Zimmerman.
Andy Kim likens Donald Trump’s shutdown behavior to ‘mafia tactics’
The news comes as the federal government shutdown stretched into its 28th day on Tuesday, with congressional leaders at odds over whether the tax credits should continue. Democrats have sought to use a continuing resolution that would restore funding to the government to extend the credits. Republican officials have so far largely declined to negotiate, though they lack the Senate votes to advance a funding measure on their own absent changes to the chamber’s rules, which require a 60-vote majority for continuing resolutions.
The Department of Banking and Insurance said new analysis showed the subsidies’ expiration would spike premiums for all individuals enrolled in plans traded on Get Covered NJ, New Jersey’s health insurance exchange, by 174%, adding more than $2,780 to premiums annually.
Individuals receiving financial assistance to subscribe to an exchange-traded plan — that’s 91% of enrollees who purchase health insurance through Get Covered NJ — would see a 163% increase, with rates rising by $1,850 on average.
“For the upcoming plan year, it is essential for all consumers to carefully shop and compare health plans to secure coverage that best meets their needs and budgets,” Zimmerman said.
The impact will be broad. More than 510,000 New Jerseyans are enrolled in plans obtained through the state’s marketplace, and more than 466,000 of those receive the enhanced subsidies, the department said.
Overall, New Jersey expects to lose more than $500 million in federal premium assistance, state officials said. New Jersey will still provide $215 million in state assistance.
The increases could be far greater for families and individuals who are risky to insure.
Rates for a family of four in Ocean County with an annual income of $131,000 could see their premiums rise by $26,000 annually as a result of the expiring subsidies, the department said.
A Middlesex County couple in their early 60s with $94,000 in income could see an increase of more than $22,000, the department said.
At 28 days, the shutdown is already the second-longest in U.S. history. The only shutdown to last longer occurred during President Donald Trump’s first term in 2018 and 2019, and lasted for 35 days.
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