CBO published new health insurance coverage projections from 2023 to 2033

CBO was released today Current forecasts Health insurance coverage for people under the age of 65 in the magazine Health issues. In that paper, CBO analysts detailed the agency’s May 2023 health insurance baseline projections, mostly using CBO’s health insurance simulation model, or HISIM2. The model is updated annually to incorporate the most recent data, recent legislative and other policy changes, and CBO’s demographic and economic projections. Assumptions They were added from HISIM2 with estimates from the Joint Committee on Taxation (JCT) staff and CBO’s Medicaid and Medicare models. Also today at the press conference Health issues Organized, CBO analysts offered. An overview of the current forecastsAnd the agency was posted Updated base tables On federal subsidies for health insurance.

The share of uninsured people under the age of 65 is historically low.

Enrollment in Medicaid and marketplace plans reached historic highs in 2023, largely due to temporary policies (in effect during the pandemic) that kept beneficiaries enrolled in Medicaid and increased subsidies for health insurance purchased in the marketplaces. The uninsured share of people under the age of 65 dropped 8.3 percent. Medicaid enrollment will grow from 60.5 million in 2019 to 76.6 million in 2022. By 2023, Medicaid will cover 28.1 percent of those under 65, and subsidized marketplace plans will cover 5.2 percent. Employment-based insurance covers more than half (57.3 percent) of the population.

Low-income people saw the largest gains in coverage and the uninsured the largest declines. For people with incomes below 150 percent of the federal poverty level, the share of uninsured people will decrease from 17 percent in 2019 to 10 percent in 2023.

In recent updates to its microsimulation model, CBO expanded its capabilities for racial and ethnic distribution analysis. Many factors drive coverage disparities by race and ethnicity, but employment, income, and immigration status are particularly important. According to CBO estimates, the share of the Hispanic population that is uninsured, at around 15 percent, is the highest among the groups surveyed.

The share of uninsured people is expected to increase

Over the next year and a half, CBO expects significant enrollment declines in Medicaid as continuing eligibility provisions take effect during the pandemic. CBO projects that 6.2 million people who will drop out of Medicaid will be uninsured. Additionally, if the revised subsidies end after 2025, as planned, an estimated 4.9 million fewer people will enroll in marketplace coverage, instead of being in the unsubsidized group or job-based coverage or uninsured. By 2033, the share of uninsured people is projected to be 10.1 percent.

Projected growth in private health insurance premiums is high in the near future.

Private health insurance premiums are an important part of the agency’s coverage projections. CBO projects higher short-term growth rates for premiums (6.5 percent in 2023 and an average of 5.9 percent in 2024 and 2025), reflecting in part a recovery in medical spending from suppressed utilization levels during the pandemic. Then, CBO projects lower growth rates (an average of 5.7 percent in 2026 and 2027 and 4.6 percent in the 2028-2033 period).

Federal subsidies for health insurance reached 1 trillion dollars

CBO is published today Updated base tables Federal subsidies for health insurance coverage for people under 65. According to CBO and JCT projections, the net federal subsidy for people under 65 in 2023 is $1.0 trillion. By 2033, that annual amount is expected to reach $1.6 trillion (or 4 percent of GDP). Over the 2024–2033 period, subsidies are projected to total $12.5 trillion—40 percent of employment-based coverage; Medicaid and the Children’s Health Insurance Program, 39 percent; Medicare, 13 percent; and subsidies for coverage obtained through marketplaces or basic health programs, 8 percent.

In early fall, CBO plans to publish a report expanding its analysis of health insurance. The report includes information on health insurance coverage and federal subsidies for people of all ages and for people in states, nursing facilities, and correctional facilities.

Carrie H. Colla is CBO’s Director of Health Analysis, and Sarah Massey is a Senior Advisor in the Division of Budget Analysis.

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