Report: 12 Million People Predicted to Use Obamacare Exchanges This Year
Alyene Senger /
The Congressional Budget Office’s new Budget and Economic Outlook includes some interesting projections regarding Obamacare. CBO director Douglas Elmendorf is testifying on the report at a Senate Budget Committee hearing Wednesday and hopefully some of these projections will be questioned:
1. Enrollment. The CBO projects that 12 million people will obtain coverage on the ACA’s exchanges this year. This is much higher than the Obama administration’s estimate of about 9 million and it is about double actual enrollment in 2014. Even more intriguing, CBO projects exchange enrollment to grow to 21 million in 2016. Thus, CBO anticipates exchange enrollment tripling between 2014 and 2016 (Table B-2). Given that as of Dec. 15, 2014, the Department of Health and Human Services reported that only 1.8 million new individuals had picked a plan, it’s hard to see how exchange enrollment will reach such levels.
2. Costs. There have been some misleading media reports claiming that the CBO now expects the Affordable Care Act to cost less. This is because the CBO says that the net cost of the law’s coverage provisions is now estimated to be $101 billion, 7 percent less than previously projected from 2015-2024. However, the reason for the difference is mainly that CBO increased its projections for offsetting revenue from Obamacare’s effects. In fact, CBO reduced its estimates for Obamacare spending (exchange subsidies and Medicaid expansion) over the ten-year period by only $8 billion. (page 121).
3. Premiums. CBO estimates that the average subsidy per beneficiary will increase from $4,330 in 2015 to $7,710 in 2025. Because subsidy amounts are linked to the cost of premiums relative to income, the implication is that CBO expects premiums to continue rising significantly in the future. (Table B-3).
4. Subsidized and Unsubsidized Enrollees. Another curious projection is that CBO projects a much larger share of exchange enrollees will be unsubsidized in future years. In 2014, about 85 percent of enrollees were getting financial assistance. In 2015, CBO expects a drop, with only about 76 percent of all enrollees receiving subsidies, declining to less than 71 percent of all enrollees towards the end of the decade (Table B-3). Given that coverage is available for purchase directly from insurers off the exchange, it is unusual to assume that this many people would use the exchange if they were not eligible for subsidies.
5. Loss of Employer Health Insurance Coverage. CBO projects that 2 million fewer people will have employment based coverage in 2015 due to the implementation of Obamacare, with loss of coverage accelerating to about 9 million over the decade (page 121). This is a greater projected decline in employment-based health coverage than in previous reports but CBO could still be underestimating, especially in the near-term. Research by Heritage expert Ed Haislmaier shows that during the first 9 months of 2014, enrollment in employer-sponsored coverage declined by almost 5 million individuals. This suggests that in reality, employer coverage may be eroding faster than CBO assumes in its projections.
The sentence, “In 2015, CBO expects a drop, with only about 76 percent of all enrollees receiving subsidies, declining to less than 71 percent of all enrollees towards the end of the decade (Table B-3),” has been corrected since publication to reflect the correct numbers.