The uninsured rate in America is projected to increase over the next ten years, largely undoing gains made during the coronavirus pandemic. This is due to the expiration of subsidies for Affordable Care Act- ACA plans and policy changes that kept low-income individuals on Medicaid. The Congressional Budget Office- CBO predicts that this year, 7.7% of Americans, or 26 million people, lack insurance. This is a decrease from 10.3% or 33.2 million people in 2019.
However, approximately 1.7 million people, primarily working-age adults, will lose their insurance each year, pushing the uninsured rate to 8.9% by 2034, according to the CBO.
The CBO’s annual report on health insurance coverage by age forecasts that the recent record-low uninsured rate will rise due to the end of enhanced ACA subsidies, set to expire next year, and the termination of Medicaid continuous enrollment provisions, which ended last spring.
The rise in U.S. immigration will also contribute, as immigrants typically have a higher uninsured rate than the general population, CBO analysts indicate.
During COVID-19, insurance coverage increased significantly, with the number of uninsured Americans dropping by about a fourth from 2019 to 2023, thanks to government policies that boosted coverage. Enhanced marketplace subsidies from the American Rescue Plan and extended by the Inflation Reduction Act increased eligibility for premium tax credits and raised subsidies for those already eligible.
ACA plan enrollment has surged and is expected to reach a historic high of 23 million people next year. However, if subsidies expire, ACA enrollment could drop by 7 to 8 million, with around 5 million becoming uninsured, though some may gain insurance through their jobs.
Efforts in Washington, including by President Joe Biden, aim to extend these subsidies. However, Republican opponents cite the significant rise in federal spending as a concern. Extending the subsidies could increase the federal deficit by $335 billion over the next decade, according to CBO analyst Sean Lyons.
Medicaid is also expected to see a drop in enrollment. During COVID-19, enrollment soared as states agreed not to remove individuals in exchange for higher federal funding. This agreement ended in April 2023, allowing states to reassess eligibility. Consequently, 23 million people have lost Medicaid coverage, according to KFF, a health policy research nonprofit.
As Medicaid unwinding continues, fewer people will have multiple insurance sources. Last year, about 29 million people had overlapping coverage, but this is expected to drop to 21 million this year.
The CBO predicts that employer-based coverage will remain the primary source of health insurance, covering 164 to 170 million people over the next decade. Medicare enrollment will see significant growth, from 60 million people last year to 74 million by 2034, as the population ages. This increase will strain Medicare’s finances, with a key trust fund for hospital benefits projected to run out by 2036.
