The Coverage Reshuffle: Health Insurance Projections & Health Care Spending, 2023-33

The end of COVID continuous coverage requirements for Medicaid and the expiration of enhanced Obamacare premium subsidies after 2025 will affect both health-care spending and sources of coverage. The Congressional Budget Office in late May released its latest estimates for Americans younger than age 65.

By 2033 the uninsured rate is projected to have increased to 10.1%, which is still below the 2019 rate of about 12%, according to the CBO.

These are the 10 key takeaways from the report, according to Forbes:

Medicaid enrollment will significantly decline over next two years. CBO expects Medicaid enrollment to fall to 75.9 million in 2023, 67.2 million in 2024 and 64.3 million in 2025.

Most people who lose Medicaid will enroll in employer coverage. The most common dual enrollment situation is coverage in Medicaid and an employer plan. According to CBO’s projections, slightly more than half of people who lose Medicaid (an estimated 7.8 million people out of 15.5 million people who lose Medicaid overall) will enroll in an employer plan.

There will be an increase in the number of people without health insurance, but most of them are eligible for subsidized coverage. Those who are removed from the program because they may not have returned renewal paperwork but remain eligible for Medicaid are effectively still covered through Medicaid retroactive eligibility.

Obamacare spending will be $214 billion this year. According to CBO, federal spending on Obamacare’s Medicaid expansion will be $123 billion and spending on Obamacare’s premium subsidies will be $91 billion this fiscal year.

Obamacare’s spending will be $2.5 trillion over the next decade CBO estimates that federal spending on the Medicaid expansion will be $1.45 trillion from 2024 to 2033, while spending on Obamacare premium subsidies will be $1.05 trillion.

Obamacare is exacerbating annual federal deficits. The new estimates are a reminder that Obamacare is significantly contributing to annual federal deficits despite the promise that the law would be paid for. The only two aspects of Obamacare that reduce federal deficits are the law’s reductions in Medicare payments and its investment tax, which are nowhere near the amount of Obamacare spending.

Per enrollee, Obamacare is three times more expensive for taxpayers than employer coverage. Premiums for employer coverage are not subject to federal income or payroll tax, which results in a revenue loss to the federal government. Overall, people migrating from Obamacare to employer coverage is a large net positive for the federal budget.

Almost everyone buying coverage in the exchange receives a subsidy. CBO estimates that 15.1 million people will receive coverage through an exchange in 2023. Of these, 14.1 million people — or 93% — will receive subsidies.

Obamacare exchange enrollment will rise and then fall. CBO projects that overall Obamacare exchange enrollment will rise to 17.9 million people in 2025 (up from 15.2 million this year) and then decline to 12.8 million in 2027.

Stability of employer coverage. CBO expects that between 57.1% and 58.2% of people under the age of 65 will enroll in an employer plan for every year between 2022 and 2033. The average over this period is 57.8%.


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