Under the Affordable Care Act (ACA) law, individuals and families can purchase health insurance through marketplaces operated by the federal and state government or partnerships between them. Some of them will meet certain criteria to receive federal subsidies for their health insurance benefits. About 13 million people selected plans from the marketplaces in 2016. The Congressional Budget Office (CBO) and the Joint Contracts Tribunal (JCT) estimate that 10 million of those people will qualify for subsidies to make their coverage more affordable based on income level.
These agencies expect average enrollment to rise to 15 million people in 2017 (a 50 percent increase) and then to between 18 and 19 million people each year from 2018 to 2026. Between 80 and 85 percent of those enrollees (or about 14 to 16 million) are expected to receive subsidies during that same time frame.
Medicaid and the Childrens’ Health Insurance Program (CHIP)
Projected changes to those eligible for Medicaid and CHIP will drive those no longer qualifying for those programs to enroll in subsidized coverage through the marketplaces. They can qualify for one or the other, but not be simultaneously eligible for both. Additional funding for CHIP will expire at the end of 2017 and then capped at an annualized amount of about $6 billion. Fewer people will be able to enroll in CHIP and head to the marketplaces, Medicaid, an employer, or become uninsured. CBO and JCT anticipate that about 1 million additional people will enroll after funding is dropped, causing an increase in subsidized enrollment after 2017.
However, CBO expects that additional states will expand eligibility for Medicaid over the 2017 through 2026 period allowing some people to become eligible for Medicaid and subsequently remove them from eligibility to enroll in subsidized coverage through the marketplaces. As more people become eligible for Medicaid coverage, enrollment peaks in the marketplaces in 2019 at 16 million and will begin to decline to 14 million by 2026.
Nine million people are expected to purchase non-group coverage in 2016, and 7 million people are expected to purchase it in 2026. These people can purchase insurance either inside or outside the marketplaces. Unsubsidized non-group coverage will begin to transfer to the marketplace system.
Basic Health Programs
Under the ACA, states have the option to create a Basic Health Program for people whose income is between 138 and 200 percent of the Federal Poverty Level (APL). The federal government provides states with funding allowing states to offer health insurance to eligible people that covers a broader set of benefits with smaller out-of-pocket payments than the marketplaces. Only two states have established a Basic Health Program. CBO and JCT anticipate other states to follow but enrollment from them will be small. About 1 million people are projected to be enrolled in this type of plan each year from 2016 through 2026.
Medicare Under Age 65
Medicare mainly provides coverage for people age 65 or older, but also covers some people who are under age 65 and qualify for Social Security Disability Insurance benefits. An average of 9 million people in this category are expected to be covered by Medicare in 2026 and remain stable over the 2017 through 2026 period.
An average of 27 million people under age 65 are projected to be uninsured in 2016 and that number is estimated to reach 28 million in 2026. About 35 percent of those would be unauthorized immigrants and ineligible for subsidies through a marketplace or for most Medicaid benefits; about 10 percent would be ineligible for Medicaid because their state had not expanded coverage; about 20 percent would be eligible for Medicaid but would not enroll; and the 35 percent outstanding would simply choose not to purchase insurance regardless of availability or eligibility.
Enrollment is anticipated to grow by 50 percent as more people get familiar with the marketplaces and subsidies and as the penalties for not having insurance coverage reach their higher permanent levels. Enrollment through the online marketplaces depends on the availability of other insurance options. In the next few years, a shift in the availability of coverage is expected through the marketplaces when employers begin declining to offer qualifying affordable insurance coverage to their employees causing those employees to turn to online health care markets.