NJ’s Health Care Tax Credits Will Expire Soon. Advocates Call For More Time.

The Enhanced Premium Tax Credits are set to expire throughout the U.S. on Dec. 31, 2025, raising concerns for New Jerseyans as their health care costs go up.

The New Jersey Department of Banking and Insurance found that the average premium increase for all GetCoveredNJ enrollees will skyrocket to over $2,780 annually (a 174% increase). In an interview with NJ Spotlight News, U.S. Congressman Herb Conaway (D-3rd) said that more than 40% of individuals could drop their health coverage if their enhanced tax credits expire.

Laura Waddell, health care program director at New Jersey Citizen Action, said that state residents are walking away from their coverage after only a month of enrollment. She also said that, due to increasing insurance costs, New Jerseyans have been forced to choose between not enrolling and choosing lower-quality coverage.

“A patient and healthcare consumers are having to base healthcare affordability and health coverage affordability to the point now where they’re making decisions of going without because they’re having to choose between, ‘Can I afford to pay my rent, or continue to pay my mortgage, or any other life sustaining bill,’ and if they’re going to be able to afford the health coverage. They shouldn’t have to make this choice,” said Waddell.

This issue has led to such a heated debate in Congress that they failed to pass a bill appropriating federal funds for 2026. Since Senate Democrats wanted to extend expanded ACA subsidies, they repeatedly blocked the bill, resulting in the 2025 government shutdown, which ran from Oct. 1 to Nov. 12.

500K covered in NJ

In New Jersey, ACA tax credits are provided to eligible residents through the GetCoveredNJ insurance marketplace. Over half a million state residents have reportedly enrolled in health coverage through GetCoveredNJ by 2025. While enrollment reached a record increase of 108% in 2025, those numbers are expected to plummet if tax credits expire and premiums soar.

Open Enrollment for GetCovered NJ began on Nov. 1, 2025, and it will run through Jan. 31, 2026. Even before enhancements for premium tax credits are set to expire, rates and premiums have already gotten higher.

Despite the looming expiration date, Larry Levitt of the Kaiser Family Foundation wrote there is no “absolute drop-dead date” for extending the tax credits. For this reason, a final decision could be made after Jan. 1.

A brief history

First implemented by the Affordable Care Act in 2014, these tax credits are federal subsidies designed to lower the cost of monthly health insurance premiums purchased through the Health Insurance Marketplace.

Former President Joe Biden temporarily expanded eligibility for the ACA tax credits and provided larger subsidies with the 2021 American Rescue Plan Act (ARPA). Americans were no longer required to have a household income less that 400% above the federal poverty line, according to the IRS. This provided greater support to people affected by the COVID-19 pandemic. 

These tax credits were then extended by three years in 2022 by the Inflation Reduction Act (IRA). Though the ACA tax credit enhancements are scheduled to expire in the New Year, the House of Representatives will vote on whether to extend them another three years.

In a recent KFF survey, over 300 health insurers for ACA-regulated plans nationwide reported an 18% premium increase for 2026, which is about 11% higher than the previous year. This report also found that ACA Marketplace insurers will raise premiums by an average of 20% in 2026.

Advocates urge action

As New Jerseyans face higher insurance costs and risk losing their coverage, local advocates have demanded a long-lasting solution from the federal government as soon as possible.

“Anything less than a…three-year or more extension, anything less is really a deliberate decision to raise costs, increase the uninsured rate, and put New Jersey families at risk,” said Waddell. “There’s no reason for this crisis, and voters will remember who stepped up and who didn’t.”