In GetCoveredNJ, a shift toward bronze plans in 2026

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This year's NJ marketplace has feet of bronze

GetCoveredNJ, New Jersey’s state ACA marketplace, has released its final enrollment snapshot for OEP 2026. Enrollment is down less than 1% from OEP 2025, but attrition when people have to make their first premium payments — and, if they get that far, sustain higher payments year-long — will probably drop average monthly enrollment well below the 2025 level. * In particular, the 211,289 renewing enrollees who passively auto-re-enrolled may react to sticker shock. (Conversely, a very sharp spike in active re-enrollments, from 85,177 in 2025 to 219,933 in 2026, points to a large potential well of resilience — people who noted the premium spikes and made a conscious choice.)

As the enrollment report emphasizes, premiums rose sharply for most enrollees in 2026, whether or not they lost subsidy eligibility. In 2025, 44% of all enrollees had paid less than $10/month in premiums; this year, just 10% will. Last year, 28% of enrollees paid more than $100/month; this year, 44% have crossed that threshold. This year, 18% of enrollees obtained no federal subsidy ; last year, just 9% went without APTC. (A third of those who are ineligible for federal subsidies obtained smaller state supplemental subsidies, available at incomes up to 600% FPL.) See Gaba for a finer-grained breakdown of net-of-subsidy premiums paid.

I want to focus here on coverage degradation in 2026 — a down-shifting in metal level. In New Jersey, that means almost entirely a switch from silver plans to bronze, because in NJ, gold plans are effectively unaffordable, chosen by just 1% of enrollees in 2025 and 2026 alike. The Jersey marketplace has always been dominated by silver plans, but in 2026 silver selection dropped to 74.1%, down from 83.3% in 2025.

New Jersey poised to add state premium subsidies to federal in ACA marketplace

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New Jersey's tweeter-in-chief

The New Jersey bill that would replace the ACA's repealed health insurance assessment with a similar state tax, S2676/A4389, has passed out of all committees and is scheduled for floor votes in the state Senate and Assembly tomorrow (July 30). Update, 7/31: the bill passed the New Jersey Assembly and Senate yesterday on a near-straight-party vote, after withstanding a late $1 million dark money assault. 

The bill levies a 2.5% tax on fully insured employer plans and individual market plans operating in New Jersey and deposits that revenue in a Health Insurance Affordability Fund devoted to

increasing affordability in the individual market and providing greater access to health insurance to the uninsured, including minors, with a primary focus on households with an income below 400 percent of the federal poverty level [FPL], expanding eligibility, or modifying the definition of affordability in the individual market, through subsidies, reinsurance, tax policies, outreach and enrollment efforts, buy-in programs, such as the NJ FamilyCare Advantage Program, or any other efforts that can increase affordability for individual policyholders or that can reduce racial disparities in coverage for the uninsured.

The bill was amended late to exempt the New Jersey small group market  -- which also means that that market is excluded from benefiting from the Affordability Fund (MEWAs and dental plans were also exempted).

In the immediate term, the New Jersey Department of Banking and Insurance (DOBI) has indicated that it plans to spend the entirety of an estimated $224.4 million* in revenue collected in 2021 on the New Jersey's individual health insurance market. $77 million would go toward the state's share of the reinsurance program implemented in 2018 (designed to reduce premiums to 15% below where they'd be without the fund). The remaining $147.4 million would be used to supplement ACA marketplace subsidies with state subsidies for all New Jersey marketplace enrollees with incomes below 400% FPL.** Those subsidies would be on offer during Open Enrollment this fall, when the state's new state-based marketplace is set to be unveiled and New Jersey bids farewell to HealthCare.gov, the federal exchange.

As of February 2020, 174,978 New Jerseyans were receiving premium subsidies in the New Jersey health insurance marketplace. Were the extra subsidies to boost enrollment at incomes below 400% FPL to 200,000, the per-person state supplemental subsidy would come to about $60 per month. DOBI has floated a lower estimate, $42 month [see update 4 below]. Supplemental subsidies in this range -- $40-60 per month -- could have a substantial impact.

Surprise! New Jersey ACA marketplace outperforms the national market

When CMS reported enrollment totals in the ACA marketplace at the end of Open Enrollment last December, the news for New Jersey was disappointing.

Despite (or per below, partly because of) a 9% average reduction in premiums last year, fruit of a new reinsurance program and a state-enacted individual mandate, on-exchange enrollment dropped 7.1% -- a performance that lagged the national marketplace (down 2.7%) and the 39 states that rely on the federal HealthCare.gov platform (down 3.8%) -- though right at the median for HealthCare.gov states that have expanded Medicaid (and so get less juice from silver loading)*.

When the state released off-exchange numbers in June, the results provided a measure of consolation. Off-exchange enrollment was up 3%, shrinking the total individual market enrollment loss to 4% from Q1 2018 to Q1 2019.

The main cause of the contrary results is not hard to find. Three quarters of on-exchange enrollment in New Jersey is subsidized.  In David Anderson's pithy formulation, "Reinsurance, all else being equal, helps the unsubsidized and hurts the subsidized." That's true of any measure or market force that reduces average premiums. When the benchmark (second cheapest silver) plan premium goes down, subsidies are reduced accordingly, and price spreads between the benchmark and cheaper plans tend to shrink, reducing discounts.

The problem with silver loading in New Jersey

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New Jersey's ACA marketplace disappointed in 2019. Prior to open enrollment, the state passed an individual mandate to replace the zeroed-out federal mandate and also stood up a reinsurance program. Together, these measures dropped premiums 22% below where they would otherwise have  and 9% net compared to 2018. Governor Murphy also directed all state agencies to encourage enrollment outreach and devoted a small sum of state funds to partly offset massive federal cuts to advertising and enrollment assistance.  

Nonetheless enrollment dropped 7% from 2018 levels -- higher than the overall 4% drop in the 39  states using the federal exchange, HealthCare.gov, though right at the median for states on the platform that had expanded Medicaid.

Silver loading* effects were likely a key factor in a wide performance gap between expansion and nonexpansion states on HealthCare.gov in 2019. In states on the platform that have not expanded Medicaid, 2019 enrollment was 99% of the 2018 total and 95% of 2017. In expansion states, enrollment in 2019 was 93% of 2018 and 87% of 2017. Why do nonexpansion states have a silver loading advantage? As I outlined in January (with a hat tip to Dave Anderson):

In states that have refused to expand Medicaid, silver loads are larger, because eligibility for marketplace subsidies begins at an income of 100% of the Federal Poverty Level (FPL), as opposed to 139% FPL in expansion states. More than one third of enrollees in nonexpansion states have incomes below 139%, which qualifies them the for highest level of CSR [94% AV]  -- and close to 90% in this income range select silver plans. Hence the estimated cost of CSR, priced into silver plans, should be higher, rendering bronze and gold plans relatively cheaper.

In New Jersey, the silver loading gap is particularly acute; the practice has yielded essentially no discounts at all for subsidized buyers, though in 2019 it did generate discounted off-exchange silver for unsubsidized enrollees.