Topics
More on Strategic Planning

CBO: 6 million more people will be insured through an association health plan or short-term plan in 5 years

Premiums for benchmark plans are projected to increase by about 15% this year to next, and by about 7% per year between 2019 and 2028.

Susan Morse, Senior Editor

Association health plans and short-term plans will gain about 6 million additional enrollees over the next five years, according to a new estimate by the Congressional Budget Office and Joint Committee on Taxation.

By 2023, when the effects of the federal rules on AHPs and short-term plans are fully phased in, about 4 million people will choose an association health plan and another 2 million will be in a short-term plan of 12 months duration.

The rule for AHPs allow for the sale of products that do not comply with many current insurance regulations. Employers could band together to jointly offer coverage that does not meet the minimum standards for benefits that insurers in the small group and non-group markets must provide.

The federal government is also extending the maximum period insurers can offer a short-term plan from three to 12 months.

Since those enrolling in either AHPs or short-term plans will be healthier, younger individuals who do not need full benefit coverage, the departure of these consumers from the small group and non-group markets will hike premiums for those left in these plans by 2 to 3 percent, the CBO estimates.

The market for individual health insurance is expected to remain stable over the next decade, the CBO said.

The projection is there will be 3 million fewer people with insurance through the Affordable Care Act marketplaces in 2027 and the number of uninsured will rise by 5 million. 

Premiums for benchmark plans are projected to increase by about 15 percent this year to next, and by about 7 percent per year between 2019 and 2028.

This year, an estimated 29 million people will be without health insurance, the CBO said. By 2028, this number will rise to 35 million. 

Federal subsidies for those who are insured will total $685 billion this year and will reach $1.2 trillion in 2028. 

Medicaid and CHIP will account for about 40 percent of the total, as will subsidies in the form of tax benefits for work-related insurance.

Medicare will account for about 10 percent, as do subsidies for coverage under the ACA.

The Congressional Budget Office has estimated that President Trump's budget will reduce mandatory federal spending for healthcare by $1.3 trillion, or 8 percent, over the next 10 years.

The largest savings of $954 billion, between 2019 and 2028, will come from the proposal to replace the federal subsidies of the Affordable Care Act with block grants to states. In 2020 states would receive $120 billion in block grants.

The budget proposals would also repeal the ACA's expansion of Medicaid coverage, cap Medicaid spending on a per-enrollee basis and cap damages in the medical liability system.

These changes would lower federal spending on healthcare, and particularly Medicare and Medicaid, by $63 billion over the next decade, the CBO estimates.

In addition, the proposal requiring Medicare Part D beneficiaries to pay higher out-of-pocket expenses for some prescription drugs and to reduce Medicare payments to certain healthcare providers would lower outlays by $59 billion and $55 billion, respectively.

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com

Show All Comments