CBO Projects Additional Uninsured Through 2028 After ACA Changes

A new report from the Congressional Budget Office (CBO) and the Joint Committee on Taxation outlined health insurance coverage losses between 2018 and 2028 for people under age 65 as a result of changes to the Affordable Care Act (ACA) by the Trump administration, as the percentage of those who are uninsured will rise from 11% in 2018 to 13% by 2028.

Between this year and next year, the agencies project that the number of uninsured people will rise by 3 million, mainly because the elimination of the individual mandate premiums in the nongroup market will contribute to pushing premiums higher.

President Trump eliminated the mandate in December 2017 as part of his tax package. The administration also cut cost-sharing reduction (CSRs) subsidies to health insurers last October. The CSRs were used to compensate insurers for providing lower-income consumers with silver-level ACA plans.

Thursday’s report outlined the effect of federal subsidies for health insurance for people under 65, including the cost of preferential tax treatment for work-related insurance coverage, the cost of Medicaid and Medicare coverage for people under age 65, and government payments for other kinds of health insurance coverage, mainly those purchased through ACA exchanges.

CBO said, since its last such report in September 2017, the projection of the number of people with subsidized coverage through the ACA marketplaces in 2027 has fallen by 3 million, and the projection of the number of uninsured people in that year has risen by 5 million.

In an average month in 2018, about 244 million of those people will have health insurance, and about 29 million will not. Most of those with coverage will have it through an employer, and about 25% will have it from Medicaid or the Children’s Health Insurance Program (CHIP).

By 2028, about 243 million are projected to have health insurance and 35 million will not.

Projected net federal subsidies for health insurance from 2018 to 2027 have fallen by 5%.

Net federal subsidies for insured people in this year will total $685 billion. That amount is projected to reach $1.2 trillion in 2028. Medicaid and CHIP account for about 40% of that.

Rising Premiums

The report said that the average premium for a benchmark plan this year—the gross amount not including any premium tax credits—is about 34% higher than it was in 2017. The jump was caused by the fact that insurers are no longer reimbursed for CSRs. A large percentage of the US population lives in areas with only 1 insurer available, and some insurers expected less enforcement of the individual mandate in 2018,

which might cause healthier enrollees to leave the market, with sicker, more expensive enrollees remaining.

From 2018 to 2019, premiums for benchmark plans are expected to rise 15% from 2018 to 2019, an increase that exceeds projected growth in overall spending for private health insurance. From 2019 to 2028, they are expected to rise 7% annually.

Nongroup Market Trends

The nongroup health insurance market (nonemployer—based insurance bought individually) is expected to be stable in most areas of the country over the next 10 years, although the CBO said the “stability may be fragile in some places. In 2018, insurers are offering coverage in all areas, but about one-quarter of enrollees have access to only one insurer’s plans. Stability would be threatened if more insurers exited markets with limited participation than entered them.”

There are trends that could increase enrollment, the report said. One is that more people will purchase subsidized coverage because they will be eligible for larger tax credits that cover a greater share of premiums for certain plans offered through the marketplaces. The higher tax credits are cause by the higher premiums, which in themselves are created since insurers are no longer being reimbused for them.

In addition, the administration has moved to expand insurance offerings outside of the ACA marketplace, such as short-term, limited duration insurance and association health plans. The goal is to offer insurance policies with less expensive premiums, although they do not cover many of the same health benefits as ACA health plans.