September 18, 2017

CBO projects rising premiums, slowing enrollment growth under Trump admin

Daily Briefing

Enrollment in Affordable Care Act (ACA) exchange benchmark plans in 2018 is expected to grow by about one million people, while premiums are projected to rise 15 percent, according to the Congressional Budget Office's (CBO) annual report released Thursday.

In a state of reform: Profiles of innovative state-level Medicaid transformation

The report assumes the ACA and its coverage mandates will continue to be enforced. It updates CBO's March 2016 projections regarding health insurance and the U.S. uninsured rate.

CBO nongroup market projections

CBO projected average insurance premiums in the exchange market will increase by about 15 percent in 2018, compared with 2017. The office attributed the increase "largely" to "short-term market uncertainty" related to the ACA's cost-sharing reduction payments and to the rise in single-insurer markets.

However, CBO said it expects the nongroup health insurance market to be stable in 2018. Further, CBO projected the average monthly enrollment in ACA exchange plans will increase from about 10 million U.S. residents in 2017 to about 11 million in 2018, and 12 million in 2019, after which it will remain at that level through 2026. According to CBO, the 2018 to 2026 projection for enrollment through the exchanges is lower by five million to seven million people than the office's March 2016 projections.

CBO cited three main reasons for lowering its monthly enrollment projection for exchange plans:

  • A greater number of employers offering employees coverage than expected;
  • Premium rate increases; and
  • The Trump administration's recent to significantly scale back ACA advertising and outreach funding.

Further, CBO estimated the uninsured rate likely would not decline from the current rate of about 10 percent, and might increase to 11 percent by 2026.

Medicaid, CHIP enrollment projections

CBO projected that the number of U.S. residents on Medicaid will increase from a monthly average of 63 million beneficiaries in 2017 to 70 million by 2027, of whom 17 million will receive coverage under the ACA's Medicaid expansion.

Meanwhile, CBO projected the number of people enrolled in CHIP will fall from six million in 2017 to about two million in 2027. CBO said much of that decline will be offset by the increase in Medicaid coverage.

For 2017, CBO estimated on average 244 million noninstitutionalized civilians under age 65 will have insurance each month. Of those, CBO estimated an average of 156 million will have employer-based coverage, 63 million will have Medicaid or CHIP, 17 million will have purchased individual plans—including 10 million through the exchanges, of whom eight million will receive subsidies—and eight million will have Medicare. CMS estimated 28 million U.S. residents will be uninsured in 2017.  

CBO employer market projections

CBO projected that the number of U.S. residents under age 65 with employer-based coverage will decrease from a monthly average of about 156 million in 2017 to 151 million in 2027. CBO attributed most of that reduction to the ACA, which the office said could prompt more employers to stop offering employer-based plans and leave employees to rely on other coverage options, such as Medicaid.

Other projections

Overall, CBO estimated federal subsidies for people under age 65 in 2017 will total $705 billion, about 3.7 percent of the gross domestic product (GDP). CBO projected that number will grow to $1.2 trillion, or 4.1 percent of GDP, by 2027 (Gever, MedPage Today, 9/14; Humer, Reuters, 9/14; Hellmann, The Hill, 9/14; Kliff, Vox, 9/14; Jost, Health Affairs Blog, 9/14; McIntire, CQ HealthBeat, 9/14 [subscription required]; CBO report, 9/14).

Where the states stand on Medicaid expansion

The Supreme Court ruling on the Affordable Care Act (ACA) allowed states to opt of the law's Medicaid expansion, leaving each state's decision to participate in the hands of the nation's governors and state leaders.

The Daily Briefing editorial teams have been tracking where each state stands on the issue since the ruling, combing through lawmakers' statements, press releases, and media coverage. In this latest iteration of our Medicaid map, we've determined each state's position based on legislative or executive actions to expand coverage to low-income residents using ACA funding.

Get the Map

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