Insurance coverage

Federal subsidies for health insurance coverage for people under age 65: 2022 to 2032

The federal government subsidizes health insurance for most Americans under age 65 through various programs and tax provisions. This report, the latest in an annual series, outlines updated baseline projections by the Congressional Budget Office and Joint Committee on Taxation (JCT) staff of the federal costs associated with each type of grant and the number of people with different types of health insurance. These projections reflect an assumption that the March 23, 2022 laws governing health insurance coverage and federal subsidies for such coverage remain in place.

Federal grants. In the CBO and JCT projections, net federal subsidies (i.e. the cost of all subsidies minus relevant taxes and penalties) in 2022 for policyholders under age 65 is $997 billion. dollars, or 4.0% of gross domestic product (GDP). In 2032, this annual amount is expected to reach $1.6 trillion, or 4.3% of GDP. Over the 2022-2032 period, subsidies are expected to total $13.4 trillion.

  • Medicaid and the Children’s Health Insurance Program (CHIP) accounted for approximately 42% of annual federal grants during the period;
  • Subsidies for employment-based coverage, about 37%;
  • Payments for Medicare enrollees under age 65, about 14%; and
  • Subsidies for coverage obtained through markets established by the Affordable Care Act or through the basic health program, about 7%.

Health insurance coverage. In an average month each year during this period, between 240 and 246 million people are expected to have health insurance, mostly through employment-based plans. Between 25 and 29 million people should not be insured.

Effects of Temporary Policies. Legislation enacted in 2020 and 2021 in response to the coronavirus pandemic affected CBO and JCT estimates of federal subsidies and health insurance coverage over the 2021-2024 period. In the projections for this period, this legislation:

  • Increases enrollment and subsidies for Medicaid and CHIP,
  • Increases enrollment in market-purchased out-of-group coverage and subsidies for that coverage, and
  • Decreases the number of uninsured people.