Dive Brief:
- The U.S. uninsured rate is expected to hit a historical low this year due to Medicaid continuous eligibility requirements and enhanced subsidies in the Affordable Care Act marketplaces, but the number of Americans without health insurance will increase over the next five years as those policies expire, according to new projections from the Congressional Budget Office.
- The CBO projects the uninsured rate for Americans under the age of 65 will reach 10.4% in 2027, before dipping to 10.1% in 2033. By comparison, only 8.7% of U.S. residents didn’t have insurance coverage in 2022.
- Despite the increase, that uninsured rate is still lower than the pre-pandemic rate of 12% in 2019, said Caroline Hanson, a principal in the CBO’s health analysis division, during a Wednesday press briefing.
Dive Insight:
The U.S. is projected to hit a record-low 8.3% uninsurance rate, or 23 million people, in 2023 due to government actions during the COVID-19 pandemic that increased the number of Americans in health insurance plans.
Lower-income Americans have benefited the most, according to the analysis.
The CBO estimates the uninsurance rate for people with income below 150% of the federal poverty line fell from 17% in 2019 to 10% in 2023. For people above that income cutoff, the uninsurance rate fell from 9% to 8% over that time.
As federal aid expires, lower-income Americans — who saw the largest recent gains — will likely be affected the most, according to experts.
“I think we would expect the uninsurance gap to widen” between income groups as the policies expire, Hanson said.
Over the next decade, employment-based coverage is expected to remain the largest source of health insurance, while Americans in government programs like Medicaid and the ACA marketplace experience more upheaval.
Medicaid enrollment swelled during the pandemic partially due to rules requiring states to provide continuous enrollment to Medicaid beneficiaries in exchange for more generous federal funding. Enrollment in the safety-net insurance reached a record high of almost 77 million people in 2022.
As those policies unwind, 15.5 million people are expected to leave Medicaid over the next year and a half, according to the CBO. Of those, 6.2 million are expected to lose insurance altogether, some of which would have remained eligible if they’d completed the administrative requirements associated with redeterminations, Hanson said.
It’s too early to draw general conclusions about how many people are losing coverage due to issues with the application process, such as not filling out the right form or failing to receive notice, said Claire Hou, a CBO economist, during the briefing. But “we are seeing people being disenrolled from Medicaid for all of those reasons,” she said.
In addition, more generous financial aid for marketplace plans enacted by the American Rescue Plan increased marketplace enrollment by an estimated 4 million people in 2023, the CBO found. Record enrollment is projected to continue in the next two years, before the subsidies expire in 2025.
Marketplace enrollment should grow that year, also helped by people moving off Medicaid into marketplace plans, before falling off in 2026 and beyond, the CBO projects.
Analysts also took a look at projected insurance premium trends.
CBO expects “relatively high” short-term growth rates for private health insurance premiums, due to inflation and a return in medical utilization post-pandemic, Hanson said.
Around 2026 to 2027, premium growth in the nongroup market is expected to exceed that for private insurance premiums, mostly because healthier enrollees are disproportionately more likely to leave the nongroup market when the more generous federal subsidies lapse.
The report’s conclusion faces a number of limitations due to the complex interactions of factors that affect health insurance enrollment, analysts said. It assumes current laws remain in place, even as lawmakers in Washington debate a number of changes to programs like Medicaid in negotiations over the debt ceiling.
