The expiration of a federal program offering premium reductions on health insurance plans has left thousands of middle-income New Jersey residents facing higher monthly costs, according to state officials and healthcare advocates. The program, established during the COVID-19 pandemic, provided financial assistance to those who did not qualify for Medicaid but still struggled to afford coverage through the state’s health insurance marketplace.
New Jersey secured an estimated $22.155 billion in federal revenue in fiscal year 2024, supporting 609 state-administered programs, according to a report released by the State Department of Treasury’s Grants Management Office. While federal funds were down 6% from the prior year due to the winding down of some COVID-era programs, overall federal funding remained 56% higher than pre-pandemic levels in 2019.
The decline in federal aid, however, is acutely felt by those who benefited from programs like the premium reduction initiative. State Treasurer Elizabeth Maher Muoio acknowledged the challenges posed by the expiration of these funds, stating that New Jersey’s agencies proactively pursued federal funding opportunities to mitigate the impact. “By actively seeking and securing valuable grant opportunities, we are ensuring critical state programs have the resources they need to support New Jerseyans and fulfill their missions,” Muoio said in a statement last year.
The majority of federal funds allocated to New Jersey in fiscal year 2024 – 72% – were directed to programs administered by the Department of Human Services. The Department of Education received the second-largest share, at 12%. Medicaid accounted for the largest single program expenditure, receiving $13.913 billion in federal funding. Other federally supported programs included school breakfast and lunch initiatives, preschool support, violence prevention services, water and land conservation efforts and cancer prevention programs.
A report from NJBIA highlighted the significant increase in federal aid to New Jersey, but also noted the impending challenges as pandemic-related funding streams diminish. The state and other states faced a December 31, 2024, deadline to obligate federal pandemic relief and stimulus funds, a deadline that has now passed.
The New Jersey Recovery Plan allocated $111 million in direct aid through the Excluded New Jerseyans Fund and ITIN Direct Assistance Program to assist residents excluded from earlier federal pandemic relief stimulus measures. However, this aid did not extend to offsetting the costs of health insurance premiums for middle-income families who were not eligible for these specific programs.
As of February 25, 2026, the state has not announced any new initiatives to replace the lost federal premium reduction program, leaving many residents to absorb the increased costs or seek alternative coverage options. The Department of Human Services has not responded to requests for comment regarding potential solutions.
