{"subscriber":false,"subscribedOffers":{}} Health Insurance For People Younger Than Age 65: Expiration Of Temporary Policies Projected To Reshuffle Coverage, 2023–33 | Health Affairs

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Research Article

Health Insurance

Health Insurance For People Younger Than Age 65: Expiration Of Temporary Policies Projected To Reshuffle Coverage, 2023–33

Affiliations
  1. Caroline Hanson, Congressional Budget Office, Washington, D.C.
  2. Claire Hou, Congressional Budget Office.
  3. Allison Percy, Congressional Budget Office.
  4. Emily Vreeland, Congressional Budget Office.
  5. Alexandra Minicozzi ([email protected]), Congressional Budget Office.
  6. The Congressional Budget Office Coverage Team
PUBLISHED:Open Accesshttps://doi.org/10.1377/hlthaff.2023.00325

Abstract

The Congressional Budget Office estimates that in 2023, 248 million people in the US who are younger than age sixty-five have health insurance coverage (mostly through employment-based plans), and twenty-three million people, or 8.3 percent of that age group, are uninsured—with significant variations in coverage by income and, to a lesser extent, by race and ethnicity. The unprecedented low uninsurance rate is largely attributable to temporary policies that kept beneficiaries enrolled in Medicaid and enhanced the subsidies available through the health insurance Marketplaces during the COVID-19 pandemic. As the continuous eligibility provisions unwind in 2023 and 2024, an estimated 9.3 million people in that age group will transition to other forms of coverage, and 6.2 million will become uninsured. If the enhanced subsidies expire after 2025, 4.9 million fewer people are estimated to enroll in Marketplace coverage, instead enrolling in unsubsidized nongroup or employment-based coverage or becoming uninsured. By 2033 the uninsurance rate is projected to be 10.1 percent, which is still below the 2019 rate of about 12 percent.

TOPICS

The COVID-19 pandemic and the policy responses to it, particularly temporary policies affecting Medicaid and enrollment through the Marketplaces established by the Affordable Care Act (ACA), have resulted in significant changes to the level and distribution of health insurance coverage for the US population younger than age sixty-five. The Congressional Budget Office (CBO) estimates that in 2023 the uninsurance rate is 8.3 percent, which is the lowest it has ever been, with Medicaid and Marketplace enrollment both reaching historically high levels.1 As temporary pandemic-related policies expire under current law, coverage will reshuffle significantly again, and the uninsurance rate will rise to 10.1 percent by 2033 (exhibit 1). Throughout the 2023–33 period, employment-based coverage will remain the largest source of health insurance, with average monthly enrollment between 155 million and 159 million. In addition to policy changes over the course of the next decade, demographic and macroeconomic changes affect trends in coverage in the CBO’s projections.

Exhibit 1 Projected health insurance coverage for people younger than age 65, by calendar year, 2022–33

Actual, 2022a20232024202520262027202820292030203120322033
Population under age 65271271271271271271271271271272272273
Employment-based coverage157155155155156157157157158158158159
Medicaid and CHIPb
 Blind and disabled in Medicaid887778888888
 Children in Medicaid353532313130303030303132
 Adults made eligible for Medicaid by the ACA171715141414141414151515
 Adults otherwise eligible for Medicaid161613121212121212131313
 CHIP777777777765
 Subtotal, Medicaid and CHIP848374717171717171727272
Nongroup coverage
 Marketplacec
  Subsidized121416171211111111111111
  Unsubsidized111122222222
  Subtotal131517181513131313131313
 Off-Marketplace334455555555
 Subtotal, nongroup coverage171921222018181818181818
Basic Health Programd111111111111
Medicaree777777777777
Other coveragef333333333333
Uninsuredg242325262728282828282828
People with multiple sources of coverage222015141414141414141414
Insured people247248246245243243243243243244245245
Uninsurance rate (%)
 Including all US residents8.78.39.39.710.110.410.410.410.210.210.110.1
 Excluding noncitizens not lawfully present6.86.47.37.78.28.68.58.58.48.38.38.2

SOURCES Congressional Budget Office (CBO); staff of the Joint Committee on Taxation (JCT). NOTES Unless otherwise indicated, all numbers are millions of people. The table shows coverage for the civilian noninstitutionalized population younger than age 65 residing in the fifty states and Washington, D.C. The components might not add up to the total population because some people report multiple sources of coverage. Estimates reflect average monthly enrollment over the course of a year and include spouses and dependents covered under family policies. ACA is Affordable Care Act. CHIP is Children’s Health Insurance Program.

aActual amounts are estimated preliminary data and are subject to revision. For more information on the individual data sources and how the CBO develops its integrated estimates of enrollment, see Congressional Budget Office. Health insurance coverage for people under age 65: definitions and estimates for 2015 to 2018 [Internet]. Washington (DC): CBO; 2019 Apr 18 [cited 2023 Apr 13]. Available from: https://www.cbo.gov/publication/55094.

bIncludes noninstitutionalized enrollees younger than age 65 with full Medicaid benefits. Estimates are adjusted to account for people enrolled in more than one state.

cMany people can purchase subsidized coverage through Marketplaces established under the ACA, which are operated by the federal government, state governments, or partnerships between the two.

dCreated under the ACA, this program allows states to establish a coverage program primarily for people with income between 138 percent and 200 percent of the federal poverty level. To subsidize that coverage, the federal government provides states with funding equal to 95 percent of the subsidies for which those people would otherwise have been eligible through a Marketplace.

eIncludes noninstitutionalized Medicare enrollees younger than age 65. Most Medicare-eligible people younger than age 65 qualify for Medicare because they participate in the Social Security Disability Insurance program.

fIncludes people with other kinds of insurance, such as student health plans, coverage provided by the Indian Health Service, or coverage from foreign sources.

gThe CBO and the JCT staff consider people uninsured if they are not covered by an insurance plan or enrolled in a government program that provides financial protection from major medical risks. See the CBO publication referred to in table note a.

In this article we describe the estimated distribution of health insurance coverage in 2023 by income group and by race and ethnicity, and we discuss how the expiration of temporary policies affecting Medicaid and Marketplace coverage will reshuffle enrollment during the next few years. Finally, we describe the trends that the CBO is projecting for major coverage categories (including uninsurance) and for health insurance premiums during the coming decade.

Study Data And Methods

CBO Modeling

The CBO’s projections described here apply to the civilian noninstitutionalized population younger than age sixty-five residing in the fifty states and Washington, D.C.2 The CBO projects coverage under the assumption that laws as of February 15, 2023, governing health insurance coverage remain in place. The CBO’s estimates, including historical estimates, are produced, in large part, using version 2 of the Health Insurance Simulation Model (HISIM2), a structural expected utility model used to generate estimates of health insurance coverage and to project future premiums. The model is updated at least annually to incorporate the most recent survey and administrative data on enrollment and premiums; recently enacted legislation, judicial decisions, and regulatory changes; and the CBO’s most recent macroeconomic forecast, which projects economic growth and employment. Estimates from HISIM2 are augmented by estimates from other models, such as the Joint Committee on Taxation’s tax models and the CBO’s Medicaid and Medicare models. For more information about HISIM2, see the online appendix.3

Limitations

Although these projections are based on the CBO’s best assessment of the available evidence, they reflect complex interactions among many entities—including federal and state policy makers, employers, households, and insurers—and are therefore inherently uncertain. They depend on economic conditions, which depend, in turn, on a wide variety of national and global forces. They assume that current laws remain in place, but changes to laws could significantly alter the distribution of coverage. For example, there is uncertainty in the actions that policy makers might take as the temporary pandemic-related policies affecting Medicaid and Marketplace coverage expire under current law. Moreover, there could be error in the CBO’s estimation of individuals’ responses to changes in their Medicaid or Marketplace eligibility.

Another source of uncertainty is future health care use and how insurers will respond in setting premiums. Estimates from the Centers for Medicare and Medicaid Services’ National Health Expenditure Accounts suggest that use and spending returned to prepandemic levels of growth in 2021, but as of 2022, commercial insurers had not yet increased premiums commensurately with the increase in health spending.4

Finally, the CBO’s behavioral model is calibrated to coverage estimates from survey and administrative data, which are imperfect. There are many useful sources of data on insurance coverage, but they sometimes conflict, and estimates of coverage by income and race are especially uncertain.5 Furthermore, survey data estimates of coverage are likely to include more measurement error now than before the pandemic.6 For example, there is an increased undercount of Medicaid enrollment partially as a result of misreporting, as policy changes have increased the average time between eligibility determination and answering the survey. In particular, estimates of the income, race, and ethnicity of people enrolled in Medicaid and Marketplace coverage as a result of temporary policies are highly uncertain, as are estimates of the uninsured.

Study Results

Health Insurance Coverage By Income In 2023

By the CBO’s estimates, of the 271 million people younger than age sixty-five in 2023, 155 million will have coverage through their employer (57.3 percent), 83 million through Medicaid and the Children’s Health Insurance Program (CHIP; 30.6 percent), 14 million through subsidized Marketplace coverage (5.2 percent), and 16 million through the remaining coverage categories (5.8 percent), and 23 million will be uninsured (8.3 percent) (exhibit 1). Because an estimated 20 million people are projected to have multiple sources of coverage in 2023, the sum of the enrolled and uninsured counts exceeds the population (and the sum of the percentages exceeds 100 percent).

Those coverage patterns vary substantially by income (exhibit 2). People with lower income (less than 150 percent of the federal poverty level) are more likely to be uninsured than those with higher income (400 percent or more of poverty), and when they have insurance, it is often through Medicaid or CHIP. Those with higher income are predominantly insured through employment-based coverage. Coverage for people with income between 150 percent and less than 400 percent of poverty is more varied because eligibility for Medicaid, CHIP, and subsidized Marketplace coverage is based primarily on income, and those with higher income are more likely to have access to employment-based coverage. Moreover, tax subsidies for employment-based insurance tend to be higher for people with higher income.

Exhibit 2 Health insurance coverage for people younger than age 65, by type of coverage and income, 2023

Exhibit 2
SOURCE Congressional Budget Office. NOTES In most states, the federal poverty level in 2023 is $14,580 for a single person. For each additional person in a household, $5,140 is added. Income levels reflect modified adjusted gross income (MAGI) for the calendar year. MAGI equals gross income plus untaxed Social Security benefits, foreign earned income that is excluded from adjusted gross income, tax-exempt interest, and the income of dependent filers. In the underlying data, some Medicaid and Children’s Health Insurance Program (CHIP) enrollees appear to have income higher than the programs’ upper limits, which can be the case when, for example, income is low during Medicaid enrollment that ends partway through the year and is much higher thereafter. The share of enrollment is calculated as enrollment within a coverage category divided by the sum of enrollment across coverage categories. The sum of figures for coverage categories exceeds the population of each subgroup because some people have multiple sources of coverage. An estimated 9.8 million people with income below 150 percent of the federal poverty level (FPL), 6.1 million people with income between 150 percent and less than 400 percent of poverty, and 3.9 million people with income at or above 400 percent of poverty are projected to have multiple sources of coverage in 2023. Bar width represents category population in millions of people.

The differences in uninsurance rates by income group have narrowed since 2019, the last year before the COVID-19 pandemic.

The differences in uninsurance rates by income group have narrowed since 2019, the last year before the COVID-19 pandemic and the federal policy changes enacted in its wake. The uninsurance rate has fallen for all income groups, but it fell disproportionately for the lowest income groups. The CBO estimates that the uninsurance rate fell from 17 percent in 2019 to 10 percent in 2023 for people with income below 150 percent of poverty, whereas it fell from 9 percent to 8 percent over that time for people with income at or above 150 percent of poverty (data not shown).

Coverage By Race And Ethnicity In 2023

The CBO has developed the capacity to report estimates of health insurance coverage by race and ethnicity (exhibit 3). Although survey-based estimates of coverage by race and ethnicity are comprehensive, they suffer from measurement error, and those based on administrative data typically require some degree of imputation and are focused on certain enrollment groups such as Marketplace and Medicaid enrollees.710 The CBO reconciled those sources and replicated them in its models. The projections for health insurance coverage by race and ethnicity in 2023 that are presented here reflect the effects of temporary Medicaid and Marketplace policies.

Exhibit 3 Health insurance coverage for people younger than age 65, by type of coverage and race and ethnicity, 2023

Exhibit 3
SOURCE Congressional Budget Office (CBO). NOTES The CBO groups all people reporting Hispanic ethnicity in the category “Hispanic” and all other people in categories using what they report about race. The categories “White,” “Black,” and “Asian” group people who report a single one of those races. The category “another race or multiracial” groups people who report a race of American Indian, Alaska Native, Hawaiian/Pacific Islander, or multiple races. The share of enrollment is calculated as enrollment within a coverage category divided by the sum of enrollment across coverage categories. The sum of figures for coverage categories exceeds the population of each subgroup because some people have multiple sources of coverage. An estimated 10.2 million White people, 4.4 million Hispanic people, 3.3 million Black people, 0.9 million Asian people, and 1.1 million people who are of another race or multiracial are projected to have multiple sources of coverage in 2023. Bar width represents category population in millions of people. CHIP is Children’s Health Insurance Program.

Many factors drive variation in coverage by race and ethnicity, but employment, income, and immigration status are especially important.11 For example, people who are employed full time or in certain industries, such as professional services, are more likely to have access to affordable employment-based insurance; similar employment patterns among White and Asian people help explain high rates of employment-based coverage for these two groups. The higher share of Medicaid and CHIP coverage among people who are Black, Hispanic, or another race (that is, not Black, White, or Asian) or who are multiracial is consistent with their comparatively lower incomes. The CBO estimates the uninsurance rate among the Hispanic population, at around 15 percent, to be the highest among the groups examined; that rate is partially explained by the higher share of foreign-born people without legal status in the Hispanic population.12 Other factors, such as state of residence or access to the Indian Health Service, play important roles in overall coverage patterns as well.

Finally, we should note that coverage distributions by broad racial and ethnic groups mask considerable heterogeneity in coverage within the groups (for instance, between Asian Indian and Korean subgroups within the broader Asian group).

Projected Transitions In Coverage After Temporary Medicaid Provisions End

The Families First Coronavirus Response Act of 2020 increased the federal medical assistance percentage (FMAP, the formula that determines the federal matching rate for Medicaid) by 6.2 percentage points for most enrollees for the duration of the COVID-19 public health emergency. To receive the enhanced funding, states were required to provide continuous eligibility to enrollees in Medicaid and Medicaid expansions of CHIP, which allowed people to remain enrolled during that period regardless of changes in their eligibility. The Consolidated Appropriations Act, enacted in December 2022, ended the continuous eligibility provisions as of April 1, 2023, and phased down the enhanced FMAP through December 2023. To continue to claim the enhanced FMAP during the unwinding of the continuous eligibility provisions, states must meet requirements for reporting, redeterminations of eligibility, and other functions. States could resume disenrolling people from Medicaid starting in April 2023, and they have fourteen months to complete redeterminations.13

Medicaid enrollment grew from 60.5 million in 2019 (data not shown), just before the start of the continuous eligibility provisions, to a record high of 76.6 million in 2022. That increase is primarily due to the provisions keeping enrollees in the program when they would otherwise have been disenrolled for losing eligibility or failing to complete administrative requirements associated with renewing coverage.14 In 2022 an estimated 15.5 million people, or about 20 percent of total Medicaid enrollment, were enrolled because of those provisions (exhibit 4) (several organizations have published estimates of the effect of continuous eligibility on Medicaid enrollment and of coverage transitions as the policy unwinds).15,16 Of that group, 32 percent were children; 35 percent were adults made eligible by the ACA; and 31 percent were nondisabled, otherwise eligible adults (data not shown).17 The estimate of 15.5 million people represents peak Medicaid enrollment as a result of the continuous eligibility provisions on a full-year-equivalent basis, whereas the highest single month of enrollment due to the provisions was March 2023, the month before states could resume disenrollment. The CBO estimates that Medicaid enrollment will gradually decline over the course of eighteen months, beginning in April 2023 (data not shown). That time frame is a result of the administrative difficulty involved in redetermining the eligibility of an unprecedented number of enrollees under the federal requirements governing the process, which is exacerbated by shortages of eligibility specialists.18 However, the time frame is uncertain, as states have flexibility in when they initiate and complete Medicaid redeterminations, and delaying the redetermination process would keep more people enrolled in Medicaid and delay transitions to other forms of coverage.

Exhibit 4 Initial transitions in coverage in the 18 months beginning in April 2023, after the end of Medicaid continuous eligibility provisions

Exhibit 4
SOURCE Congressional Budget Office (CBO). NOTES The 15.5 million people leaving Medicaid after eligibility redetermination is a full-year-equivalent estimate. The movement to other types of coverage or to being uninsured describes the initial estimated transition immediately after disenrollment from Medicaid. In the CBO’s estimation, after the continuous eligibility provisions expire, some people will continue to be enrolled in both Medicaid and another source of health insurance, as was the case in years past. However, that number is expected to be significantly lower than it was during the years in which the provisions were in effect. Components might not add up to totals because of rounding.

Absent the continuous eligibility provisions, people would typically lose Medicaid eligibility if they (or their spouse or parent) gained new employment that increased their income beyond their state’s eligibility limits. Some may gain access to an offer of employment-based coverage, and those without an affordable offer of such coverage may become eligible for subsidized coverage purchased through the Marketplaces. Another portion of the 15.5 million in additional enrollment may remain income eligible but be disenrolled because of administrative requirements associated with the redetermination process and periodic eligibility checks, such as the requirement to respond to a state Medicaid agency’s request for information.

As a direct result of the continuous eligibility provisions, the number of people with multiple sources of coverage increased substantially starting in 2021, and it remains elevated in 2023.19 The CBO estimates, on the basis of an analysis of Medicaid claims data, that simultaneous enrollment in Medicaid and employment-based coverage as a result of the continuous eligibility provisions amounted to 4.6 million people in 2022 (exhibit 4).20 Because people are not eligible for subsidies for plans purchased in the Marketplaces if they are eligible for Medicaid or CHIP, and there are processes in place to check enrollment in Medicaid and Marketplace coverage, the CBO expects that simultaneous enrollment in Medicaid and Marketplace coverage is uncommon.

By the CBO’s estimates, once people are no longer enrolled in Medicaid because they have become ineligible or have not completed the redetermination process, 9.3 million will transition to other forms of coverage. Of these, the 4.6 million simultaneously enrolled in Medicaid and employment-based coverage will remain in employment-based coverage, and 3.2 million will newly enroll in employment-based coverage. Another 1.6 million are projected to enroll in nongroup coverage, the vast majority of whom are estimated to receive a subsidy and to enroll in that coverage through a Marketplace (exhibit 4). The number of people transitioning to Marketplace coverage depends on state policies regarding the transition, such as automatically enrolling low-income people who are determined to be eligible for Marketplace coverage. The remaining 6.2 million no longer enrolled in Medicaid (some of whom will be eligible on the basis of their income but will not recertify their eligibility) are projected to be uninsured, largely because they are not eligible for subsidized coverage through a Marketplace, choose not to pay for unsubsidized insurance, or lack access to employment-based coverage.

In the CBO’s projections, the reduction in Medicaid enrollment resulting from the ending of the continuous eligibility provisions is partially offset by two factors. First, a proposed regulation will, the CBO estimates, increase enrollment by simplifying procedures for enrollment and renewal and by creating more uniform processes for eligibility determinations among states.21 Second, the Consolidated Appropriations Act of 2022 requires all states to permanently adopt continuous eligibility in Medicaid and CHIP for children up to age nineteen, allowing them to remain enrolled for a full year regardless of changes in household income or other circumstances that affect eligibility.

Projected Effects Of Recent Policy Changes On Marketplace Enrollment

The CBO projects that Marketplace enrollment of people younger than age sixty-five will be 15.1 million in 2023 (exhibit 1), which is 1.8 million more than in 2022 and the highest enrollment level since the Marketplaces were established in 2014. About 93 percent of these enrollees will receive premium tax credits that subsidize their coverage, a share that has also grown in recent years.

Several policy changes have contributed to the growth in Marketplace enrollment and will continue to have a significant impact.

Several policy changes have contributed to the growth in Marketplace enrollment and will continue to have a significant impact for the next several years. First, the 2022 reconciliation act extended the enhancement of Marketplace subsidies through 2025. Previously, the American Rescue Plan Act of 2021 put those enhanced subsidies in place for 2021 and 2022. Eligibility for premium tax credits was extended to people with income more than 400 percent of poverty, and the magnitude of the subsidies for people who were previously eligible increased. For example, under the policy, enrollees with income at or below 150 percent of poverty can enroll in a benchmark plan without having to contribute toward their premium. Moreover, beginning in 2022, the administration implemented a special enrollment period that enables low-income enrollees who are eligible for a plan with a zero out-of-pocket premium to enroll outside of the open enrollment period.

Another important policy change affecting Marketplace coverage beginning in 2023 was a regulation that permanently changed the calculation used to determine whether a plan offered by an employer is affordable for the purpose of determining eligibility for Marketplace subsidies for an employee’s family members.22 Under the regulation, designed to address an issue often referred to as the “family glitch,” the affordability of an employer’s offer of insurance for dependents is determined by the cost of the family premium, rather than the employee’s self-only premium. That regulatory change extended eligibility for Marketplace subsidies to some spouses and dependents of employees with access to employment-based coverage who would have previously been ineligible.

Of the estimated 15.1 million people enrolled in the Marketplace in 2023, the CBO estimates that 4 million are enrolled because of the enhanced subsidies (exhibit 5). Record-high enrollment is projected to continue in the next two years, and enrollment attributable to the enhanced subsidies is projected to increase to 4.9 million people by 2025. Part of the growth from 2023 to 2025 stems from an increasing awareness of the policy that leads fewer employers to offer health insurance and, therefore, to higher enrollment in the Marketplaces. After the enhanced subsidies expire, 1.8 million people will remain temporarily enrolled in a Marketplace plan in 2026, the CBO projects, because of inertia and policies such as automatic renewal.

Exhibit 5 Effects of policy changes on total Marketplace enrollment, 2023–27

Exhibit 5
SOURCE Congressional Budget Office (CBO). NOTES People whose enrollment is affected by the affordability calculation but who obtain coverage under the enhanced subsidies are counted as enrollment attributable to the enhanced subsidies. Increases in enrollment after the end of continuous eligibility and Medicaid disenrollment fall in all three categories. If the CBO projects that a person would have taken up coverage in the absence of the enhanced subsidies or the change to the affordability calculation, the person is included in the share whose enrollment is attributable to all other factors.

The increased enrollment attributable to the enhanced subsidies is especially large among low-income people for three reasons. First, enrollees with income below 200 percent of poverty are required to pay no more than 2 percent of their income toward their premium (zero percent for enrollees with income at or below 150 percent of poverty), and they are eligible to enroll in plans that cover a higher share of medical expenses. Second, the regulatory change to the special enrollment period facilitated enrollment for those with a zero out-of-pocket premium, who are generally low-income people. Third, low-income workers are less likely than high-income workers to have an affordable offer of insurance from their employer (which would disqualify them from getting a subsidized Marketplace plan), so they are more likely to be eligible for subsidized Marketplace coverage.

People who would have enrolled in Marketplace or other coverage absent the enhanced subsidies also receive those additional subsidies, which lowers the cost of their out-of-pocket premium in the CBO’s projections. Thus, both the federal cost of net increases in coverage and the federal cost of lowering out-of-pocket premiums for people who would have been insured otherwise boost the amount calculated as the federal cost per newly insured person that is attributable to the enhanced subsidies (data not shown).

The enrollment increase from the change to the affordability calculation is smaller but will grow over time as awareness of the policy and, in turn, people’s responsiveness increase. The CBO projects that 0.3 million additional people will enroll in the Marketplaces in 2023 because of the change and that this figure will increase to about 0.8 million by 2027 (exhibit 5) and in later years (data not shown).

The enrollment levels shown in exhibit 5 that are not attributable to the enhanced subsidies and the revised affordability test are the net effect of all other factors affecting eligibility for and the take-up of Marketplace coverage.

Increases in Marketplace enrollment after the end of continuous eligibility and Medicaid disenrollment are attributable both to policy changes that the CBO considered (the result of enhanced subsidies and the change in the affordability test for employment-based insurance for dependents) and to other factors. If the CBO projects that a person would have taken up coverage in the absence of the enhanced subsidies or the change to the affordability calculation, the person is included in the share whose enrollment is attributable to all other factors.

In recent years, several other administrative and judicial actions have also affected enrollment in the Marketplaces, although to a lesser extent than the two policies just discussed, by increasing awareness of subsidies for Marketplace plans and by easing enrollment processes. For example, funding for “navigator” programs increased significantly in advance of the 2022 and 2023 open enrollment periods, and for states using HealthCare.gov, that period was lengthened.23 (States that operate their own Marketplaces generally had longer open enrollment periods already.) In addition, income verification requirements for low-income Marketplace enrollees were loosened in 2021, after a federal district court overruled changes that had made the requirements stricter. Under current regulations, if a person attests to having an income above the federal poverty level but administrative data sources suggest that the person has an income too low to qualify for Marketplace subsidies (that is, below the federal poverty level), then the person is not required to provide further information to verify income before being allowed to enroll in subsidized coverage.24

Projected Coverage: 2023–33

Having described policy changes and their coverage effects in the next few years, we now turn to our projections of the health insurance coverage of the nonelderly population over the entire 2023–33 period (exhibit 1). As policies are scheduled to expire or take effect, the distribution of coverage by income and by race and ethnicity in later years may differ from the distribution in 2023, as previously discussed. Here we focus on the three largest categories of coverage and on the uninsured.

Employment-Based Coverage:

In 2023, 155 million people are projected to be enrolled in employment-based coverage, a decrease from 2022, when enrollment was 157 million. Enrollment is estimated to remain at 155 million through 2025. That decline is explained both by lower employment projected in the CBO’s macroeconomic forecast, causing a decrease in employers’ offers of insurance, and by employees’ enrollment in nongroup coverage in response to the availability of the enhanced Marketplace subsidies through 2025. Beginning in 2026, projected employment growth and the end of those enhanced subsidies increase employment-based coverage. In 2027, enrollment is projected to return to 2022 levels and thereafter to continue to increase each year through 2033, when 159 million people will have employment-based coverage, the CBO estimates. The increases in the later years of the projection period are the result of population, employment, and income growth over time.

Medicaid And CHIP Coverage:

Enrollment in Medicaid and CHIP in 2023 is estimated to be eighty-three million, a decline from an estimated enrollment of eighty-four million in 2022. That decline is largely attributable to states’ resuming disenrollment from Medicaid after the end of the continuous eligibility provisions. Enrollment is projected to continue to decline through 2025, when states are estimated to have completed redeterminations. The decline is partially offset by the increased enrollment attributable to the proposed rule to streamline Medicaid enrollment and the new requirement for continuous coverage for children in Medicaid. In 2025, an estimated seventy-one million people are projected to enroll in Medicaid or CHIP, and that number is estimated to stay relatively stable for the remainder of the projection period. CHIP enrollment is projected to decline in 2032 and 2033, as, the CBO estimates, current levels of funding will not be sufficient to cover all children who are eligible.

Nongroup Coverage:

Over the course of the next several years, trends in nongroup coverage are driven by the policy changes previously described. In 2023, nongroup enrollment is estimated to total nineteen million, an increase from seventeen million in 2022. It is projected to peak in 2025, the last year the enhanced subsidies are scheduled to be available, at twenty-two million enrollees. Enrollment is projected to decline in 2026 and 2027, resulting from the expiration of the enhanced subsidies, partially offset by the estimated effect of administrative actions. Those administrative actions change the affordability calculation for determining eligibility for subsidized coverage and establish what is termed the Individual Coverage Health Reimbursement Arrangement rule, which allows employers to contribute funds for employees to purchase nongroup coverage. Over the course of the 2027–33 period, enrollment is projected to stabilize at about eighteen million in each year.

Uninsured:

Both in terms of the number of people and as a share of the population younger than age sixty-five, the uninsured population in 2023 will be at a historic low, at twenty-three million, or 8.3 percent. That estimate is one million lower than the previous historic low of twenty-four million in 2022. Those numbers result from the temporary policies that increased enrollment in Medicaid and the Marketplaces. But as the temporary policies expire, the number of uninsured people will increase from 2024 through 2027, the CBO projects, and thereafter will stabilize at around twenty-eight million through 2033. Although higher than the current rate, the corresponding uninsurance rate—10.1 percent of the population in 2033—is still below the prepandemic rate of about 12 percent in 2019 (data not shown).

Projected Premiums For Private Health Insurance

The CBO projects that private health insurers’ spending on per enrollee private health insurance premiums, which reflect paid claims and administration, will grow by 6.5 percent in 2023, an average of 5.9 percent during the 2024–25 period, an average of 5.7 percent during the 2026–27 period, and an average of 4.6 percent during the 2028–33 period (data not shown). The higher short-term growth rates partly reflect a bouncing back of medical spending from the suppressed levels of utilization during the initial months of the COVID-19 pandemic in 2020. After a decline of 1.1 percent in 2020, private health insurance expenditures (as reported in the National Health Expenditure Accounts) increased 5.8 percent in 2021.4 In addition, relatively high rates of inflation experienced in many sectors in 2022 will, the CBO anticipates, affect health insurance premiums in the coming years.

The CBO expects that the trends in Marketplace benchmark premiums will differ somewhat from overall private health insurance premiums. (The benchmark premium is the premium of the second-lowest-cost silver plan available in the Marketplace and is used for determining the amount of the premium tax credit for subsidized Marketplace coverage.) From 2022 to 2023, benchmark premiums increased by an average of 4.0 percent, the first year of positive premium growth since 2019.25 That premium growth is explained by the growth in utilization discussed previously, as well as by a policy change that increased the minimum allowable actuarial value of silver plans.26 The CBO estimates that benchmark premiums will grow by an average of 5.4 percent during the 2024–25 period, 9.3 percent during the 2026–27 period, and 4.8 percent during the 2028–33 period (data not shown). The enrollment of healthier-than-average people via the Marketplaces because of the enhanced subsidies will slightly dampen the growth of benchmark premiums relative to that of private health insurance premiums until those subsidies expire in 2026. The growth of benchmark premiums in 2026 and 2027 will exceed the growth of private health insurance premiums as insurers respond to the exit of those healthier enrollees by raising premiums in excess of that underlying trend. Subsequently, the growth of benchmark premiums is projected to roughly follow the path of private insurance premiums.

Conclusion

Temporary policies enacted in response to the COVID-19 pandemic have increased Medicaid and nongroup coverage and decreased the number of uninsured people. The CBO estimates, as a result of those increases in overall enrollment, which continue into 2023, that the uninsurance rate will reach a record low of 8.3 percent this year. In 2033, after the temporary policies have expired, enrollment in the coverage categories most affected by the temporary policies will be lower, and the uninsurance rate will increase to 10.1 percent, the CBO estimates. Importantly, those projections take into account many estimated components, including demographic, economic, and behavioral variables, and are conditioned on the assumption that current laws stay in place.

ACKNOWLEDGMENTS

The authors thank Carrie Colla, Chad Chirico, Chapin White, and Jeff Kling for their comments on an earlier version of the article; Casey Labrack for his graphical assistance; John Skeen for his editorial assistance; and two anonymous reviewers for their constructive feedback. The analysis was completed by the entire Congressional Budget Office Coverage Team, consisting of, in addition to the authors, Jessica Hale, Stuart Hammond, Christian Henry, Nianyi Hong, Ben Hopkins, Robert Lindsay, Sean Lyons, Sarah Masi, Eamon Molloy, Romain Parsad, Robert Stewart, Carolyn Ugolino, Katie Zhang, and Chris Zogby. This is an open access article distributed in accordance with the terms of the Creative Commons Attribution (CC BY 4.0) license, which permits others to distribute, remix, adapt, and build upon this work, for commercial use, provided the original work is properly cited. See https://creativecommons.org/licenses/by/4.0/. To access Alexandra Minicozzi’s disclosures, click on the Details tab of the article online. [Published online May 24, 2023.]

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