Uninsured Rate Expected To Hit 8.9% Over Next Decade, CBO Finds

The projections reverse how insurance coverage ballooned during COVID-19. The number of Americans without health insurance dropped by about a fourth from 2019 to 2023, thanks to government policies bolstering coverage, according to National Center for Health Statistics data released Tuesday.

One such policy is enhanced marketplace subsidies passed in the American Rescue Plan in 2021 and extended by the Inflation Reduction Act one year later. The laws expanded eligibility for premium tax credits to people with incomes greater than 400% of the federal poverty level, and increased subsidies for people who were previously eligible.

The number of people enrolled in ACA plans have soared as a result, and is expected to keep rising. Enrollment in the exchanges is expected to reach a historic high of 23 million people next year, according to the CBO — at which point the subsidies are scheduled to expire.

If they expire, ACA enrollment will decline by about 7 million to 8 million people, the report estimates. Some of those people will find insurance through their job. However, about 5 million people will become uninsured, CBO analyst Sean Lyons said during a Tuesday media briefing.

There has been some movement in Washington to extend the subsidies, including from President Joe Biden, who has made doing so a key part of his healthcare platform in the 2024 presidential election. 

However, Republican opponents point to the dramatic increase in federal spending as a result of the more generous financial assistance. If the subsidies are extended, it could increase the federal deficit by $335 billion over the next decade, Lyons said.

Medicaid is another insurance program that’s expected to see its membership drop significantly in the near-term.

Enrollment in the safety-net program skyrocketed to cover one in four Americans during COVID-19, as states agreed not to boot individuals off Medicaid in return for higher federal funding.

However, that agreement ended in April 2023, allowing states to once again assess the eligibility of their Medicaid beneficiaries. At least 23 million people have lost Medicaid coverage to date as a result, according to a tracker by health policy research nonprofit KFF.

As Medicaid unwinding continues, the number of people with multiple sources of insurance coverage is also expected to decline, according to the CBO. Research has shown that many Medicaid beneficiaries didn’t know their coverage continued during the pandemic, leading them to turn to other types of plans.

Last year, an estimated 29 million people had overlapping coverage. That’s expected to drop to 21 million after this year, according to the report.

Over the next decade, the CBO expects job-based coverage will continue to be the largest source of health insurance, covering between 164 million and 170 million people.

However, Medicare enrollment will grow most significantly as the population ages, from 60 million people last year to 74 million in 2034.

More baby boomers aging into Medicare is expected to put more stress on the federal entitlement program’s finances, absent congressional action. A key trust fund underpinning Medicare’s hospital benefit is forecast to run dry by 2036.