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CBO Provides Updated Estimates for Uninsured; Small and Non-Group Market Coverage

May 25, 2018

McDermott+Consulting

This week, the Congressional Budget Office (CBO) released a report updating estimates on insurance coverage and subsidies for individuals under 65 from 2018 to 2028.  Below are a few highlights:

  • In 2018, about 29 million people under age 65 will be uninsured (roughly 11 percent). By 2028, about 35 million people will be uninsured (roughly 13 percent).  This is primarily due to the elimination of the individual mandate penalty and higher premiums in the non-group market.
  • The average premium for a benchmark plan is 34 percent higher in 2018 than it was in 2017. CBO expects that premiums for benchmark plans will increase by 15 percent from 2018 to 2019.  The increase is caused by three factors: insurers are no longer directly reimbursed for cost-sharing reduction payments; a larger percentage of the population lives in areas with only one insurer in the marketplace; and some insurers expected less enforcement of the individual mandate in 2018.
  • CBO estimates that beginning in 2023, roughly six million additional people will enroll in either an Association Health Plan or a Short Term Limited Duration Insurance plan as a result of two recent regulations proposed by the Administration. CBO expects that enrollees in these plans will be healthier than those enrolled in small group or non-group plans, increasing premiums for those remaining in other small or non-group options.

CBO also includes extensive discussion of how this year’s report varies from last September’s comparable analysis.  CBO notes that this year’s report found an average of three million more uninsured people between 2018 and 2027.  However, CBO notes the fluctuation of the change over the 10-year window and how it compares to previous CBO estimates: in 2018, one million fewer people are projected to be uninsured; in 2027, five million more people are projected to be uninsured.  The primary reason for this, according to the report, is the elimination of the individual mandate penalty.  CBO also notes that the projections in this report use revised methods to estimate the effects of eliminating the penalty.  Using the updated methodology, CBO estimates that the reduction in health insurance coverage is about one-third smaller than the agency previously estimated.

 

For more information, please contact Mara McDermott.

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