WASHINGTON D.C. – Two Republican U.S. Representatives from New Jersey, Tom Kean Jr. and Jeff Van Drew, are co-sponsoring bipartisan legislation aimed at preventing a significant increase in health insurance costs for hundreds of thousands of Americans. The bill seeks to extend federal tax credits that subsidize Affordable Care Act (ACA) marketplace plans, which are set to expire at the end of 2025. Without congressional action, these crucial health subsidies could lapse, leading to substantial premium hikes and potentially causing millions to lose coverage.
Looming Premium Hikes and Coverage Gaps
The enhanced premium tax credits, first expanded in 2021 and extended through the Inflation Reduction Act, have made health insurance more affordable for many American families. These subsidies cap the amount individuals and families pay for their monthly premiums, preventing them from exceeding a certain percentage of their income. Since their implementation, enrollment in the ACA marketplaces has surged, reaching a record 24.3 million people in 2025.
However, if Congress fails to act, these enhanced subsidies will expire, and eligibility will revert to less generous, pre-enhancement rules. This scenario, often referred to as the “subsidy cliff,” is projected to cause significant financial strain. Insurers nationwide are already proposing average premium increases of around 18% for 2026, with some states facing much higher requests. For subsidized enrollees, the expiration of these credits could lead to out-of-pocket premium increases exceeding 75% on average. Nationally, estimates suggest that as many as 4.1 million Americans could lose their health insurance coverage if the subsidies lapse.
New Jersey residents are particularly vulnerable. The state’s Department of Banking and Insurance has reported that average premiums for 2026 could increase by 15.9%. With approximately 513,000 residents enrolled in the state’s Get Covered NJ marketplace, roughly 454,000 are expected to face higher costs if the federal subsidies expire.
Bipartisan Effort to Extend ACA Subsidies
Representatives Kean and Van Drew are backing H.R. 5145, the Bipartisan Premium Tax Credit Extension Act, which proposes a one-year extension of the enhanced subsidies. This legislative push is driven partly by concerns among Republican lawmakers in swing districts. With the 2026 midterm elections on the horizon, potentially sharp increases in healthcare costs could pose a significant political challenge for incumbents.
This bill has garnered support from a coalition of moderate Republicans, recognizing the potential impact on their constituents. However, the path forward is not without obstacles. Hardline conservative factions within the House Republican conference have expressed opposition to extending the subsidies, viewing them as an expansion of government spending.
Political Crosscurrents and Negotiation Leverage
The debate over extending the ACA subsidies is unfolding against a backdrop of broader budget negotiations. House Speaker Mike Johnson and Senate Majority Leader John Thune have indicated potential openness to an extension, though the specifics remain uncertain. Democrats, led by Senate Minority Leader Charles E. Schumer, are advocating for the subsidy extension to be included in must-pass government funding bills, using it as leverage to secure legislative priorities. The looming deadline for funding the government, September 30, adds urgency to these discussions.
Some Republicans point to national data regarding potential fraud and abuse within the ACA marketplaces as justification for letting the subsidies expire, while insurer groups and advocates argue that such claims are overstated and that the subsidies are critical for market stability.
Adding to the complex political landscape, Representatives Kean and Van Drew, along with other Republicans, have previously voted for budget resolutions that included significant cuts to Medicaid. Critics argue these actions, coupled with the potential lapse of ACA subsidies, could severely impact health care access for millions of Americans, particularly low-income families and vulnerable populations.
The Urgency for Consumers and the Market
With the open enrollment period for 2026 coverage set to begin on November 1, the uncertainty surrounding the ACA subsidies creates significant challenges for consumers and insurers alike. Insurers have submitted their proposed rates for 2026, and many have factored the potential expiration of enhanced tax credits into these filings. If the subsidies are not extended, the resulting premium shock could lead many individuals and families to drop their health insurance altogether, potentially reversing years of progress in expanding coverage.
The co-sponsorship of H.R. 5145 by Kean and Van Drew highlights a growing recognition among some Republicans that protecting health care affordability is crucial, even if it involves supporting elements of the ACA. The ultimate fate of these vital subsidies will likely be determined through intense negotiations in the coming weeks, with significant news expected as Congress grapples with funding deadlines and legislative priorities.
