New Jersey residents who buy health insurance through the state’s marketplace will face sharply higher premiums next year, with costs projected to rise nearly 175 percent on average, the Murphy administration announced Monday.
The spike comes as enhanced federal health insurance subsidies are set to expire amid the ongoing federal government shutdown. Congressional Democrats have sought to tie the shutdown’s resolution to extending the subsidies, while Republicans want to handle the issue separately.
According to the New Jersey Department of Banking and Insurance (DOBI), roughly 500,000 New Jerseyans receive health coverage through the state’s exchange, Get Covered New Jersey, and about 60,000 residents stand to lose federal assistance entirely if the subsidies lapse.
“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,” DOBI Commissioner Justin Zimmerman said in a statement. “Continued Congressional inaction on extending the enhanced premium tax credits will result in higher insurance costs for New Jersey residents who count on Get Covered New Jersey for health coverage for themselves and their families.”
The looming expiration of the subsidies has become a flashpoint in the budget impasse that triggered the shutdown. Democrats argue the federal government should not reopen until a deal is reached to preserve the health care aid, while Republicans insist on separate negotiations.
The subsidies, originally expanded through pandemic-era legislation, were key to lowering premiums for middle- and lower-income families. Without them, state officials said, average health care costs will rise by roughly $2,780 per household next year.
The Murphy administration had warned of a surge in premiums earlier this year, estimating in May that the lapse could double health insurance costs. Monday’s announcement revealed the increase to be far worse than anticipated.
New Jersey’s own subsidy program, known as New Jersey Health Plan Savings, will remain in place but provides a fraction of the federal assistance. The state program is valued at about $215 million, compared to $500 million in federal funding set to expire, according to state budget documents.
Democratic Gov. Phil Murphy’s administration has been urging members of the state’s congressional delegation to back a federal extension, warning that Trenton cannot “backfill” the shortfall.
Republicans, meanwhile, are divided. Some — including Rep. Jeff Van Drew (R-N.J.) — have called for extending the enhanced subsidies to avoid alienating middle-class voters who benefited from the program. Van Drew said he recently spoke with President Donald Trump about pursuing a one-year extension.
The extent of the premium increases will vary based on income level, family size, and geography, but the Murphy administration said the overall jump represents the steepest annual rise since the exchange was established.
State officials are advising residents to begin comparing plans early and to consider adjusting coverage levels ahead of the new plan year.
