CBO Publishes New Projections Related to Health Insurance for 2024 to 2034

Today, CBO published updated baseline projections of federal subsidies for health insurance coverage. In projections by CBO and the staff of the Joint Committee on Taxation (JCT), net federal subsidies in 2024 for insured people are $2.0 trillion. In 2034, that annual amount is projected to reach $3.5 trillion (or 8.5 percent of gross domestic product). Over the 2025–2034 period, subsidies are projected to total $27.5 trillion—with Medicare accounting for 46 percent; Medicaid and the Children’s Health Insurance Program (CHIP), 25 percent; employment-based coverage, 21 percent; subsidies for coverage obtained through the Affordable Care Act’s marketplaces or the Basic Health Program, 5 percent; and other subsidies, 2 percent.

By CBO’s estimates, the share of people without health insurance reached an all-time low of 7.2 percent in 2023. The rate in 2034 is projected to be 8.9 percent—higher than it was during the 2021–2023 period but lower than the rate of 10.0 percent in 2019, before the coronavirus pandemic. CBO attributes much of the increase over the next 10 years to the end of Medicaid’s continuous eligibility provisions in 2023 and 2024 and the expiration of enhanced marketplace subsidies after 2025. (Both of those policies were put in place during the pandemic.) The surge in immigration that began in 2021 (and that CBO projects will continue through 2026) will contribute to the increase as well, as those newly arrived immigrants will, the agency expects, be substantially less likely to have health insurance coverage than the overall population. The largest increase in the uninsured population between 2024 and 2034 will be among adults who are 19 to 44 years old.

CBO’s updated projections of health insurance coverage are described in an article published today in the journal Health Affairs. In that article, CBO’s analysts detailed the agency’s June 2024 baseline projections of health insurance over the next decade, along with projections of health insurance coverage by age. The estimates underlie the agency’s baseline budget projections and serve as the benchmark for estimating the effects that proposed legislation would have on the federal budget and on health insurance coverage.

In the agency’s June 2023 article in Health Affairs, the projections were for the civilian noninstitutionalized population younger than age 65 residing in the 50 states and Washington, D.C., constituting 80 percent of the entire population in 2024. In response to questions from Members of Congress and their staff and to better align with analyses in other CBO products, this year the agency expanded its analysis in Health Affairs to include the entire population.

At a press briefing that Health Affairs organized, CBO’s analysts presented an overview of today’s updated projections, including these findings:

Enrollment in Medicaid and the CHIP Is Projected to Decline

Declines in enrollment over the next decade are concentrated in Medicaid and CHIP. In CBO’s estimates, enrollment in those programs falls from 92 million in 2023 to 79 million in 2034. That decrease is greater than the increase in uninsured people partly because some people losing Medicaid coverage have concurrent coverage from another source. In the agency’s projections, the number of people with multiple sources of coverage declines from 29 million in 2023 to 21 million in 2024 and remains at that level in 2034.

Enrollment in Medicare Is Projected to Increase

People age 65 or older have the highest rates of insurance coverage, mainly because of Medicare coverage, and are projected to grow substantially as a segment of the population over the next decade. Medicare enrollment rises from 60 million in 2023 to 74 million in 2034 in CBO’s projections. Notably, more than half of all Medicare enrollees with Part A and Part B coverage are enrolled in Medicare Advantage in 2023, and on the basis of trends in enrollment and payments, the agency projects that share to rise to nearly two-thirds by 2034.

CBO’s Estimates of Employment-Based and Marketplace Enrollment Are Higher Than Previous Projections

CBO also looked back at its September 2023 projections and compared them with the latest data on enrollment in 2023 and with its current projections. For the 2024–2033 period, the years spanned by both last year’s projections and the current ones, the largest revisions in the agency’s projections were to the number of people covered through an employer and the health insurance marketplaces.

In the current projections, estimated average annual enrollment in employment-based coverage over the 2024–2033 period is up by 3.5 million over the previous estimate. The projection of higher enrollment derives from higher projections of net immigration and employment growth. Projected average annual enrollment through the marketplaces over the period is 3.2 million more than previously estimated. The increase stems from two main factors. First, in the agency’s current projections, more people are eligible for premium tax credits because of changes to CBO’s economic and demographic forecasts. Second, the current projections account for greater-than-anticipated effects on enrollment resulting from Medicaid’s continuous eligibility provisions and from the availability of enhanced marketplace subsidies.

Alexandra Minicozzi is CBO’s Chief of the Health Insurance Modeling Unit within the Health Analysis Division, and Sarah Masi is a Senior Adviser in the Budget Analysis Division.