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Latest CBO Figures Give Incomplete Picture of Health Reform

Some critics cite the Congressional Budget Office (CBO) estimates of enrollment in health reform’s marketplaces to argue that health reform is losing momentum, but that’s premature.  Until next month, when CBO updates its ten-year estimates of expected coverage gains — from all sources of coverage — it’s too early to draw any conclusion about what CBO now expects on that front. 

Health reform has already made historic progress in expanding coverage.  For example, Census data show that the uninsured rate fell by 2.9 percentage points — and the number of uninsured fell by 8.8 million — between 2013 and 2014, when health reform’s major coverage expansions took effect.  The Administration estimates that 17.6 million uninsured people have gained coverage through September 2015 due to health reform.   

CBO lowered its estimates last week of total marketplace enrollment in 2016 (from 21 million people to 13 million) and the number of recipients of marketplace subsidies (from 15 million to 11 million).  But that doesn’t mean that CBO, which previously projected that 25 million people will eventually gain coverage under health reform, will lower those estimates as well. 

For example, CBO may simply assume now that marketplace enrollment will take longer to ramp up.  Last year, CBO expected a 90 percent increase between 2015 and 2016, which likely was never realistic. 

Even if CBO assumes that fewer people will buy marketplace coverage over the long run, that wouldn’t affect the total number of uninsured people gaining coverage under health reform if more people get coverage through other sources.  In fact, CBO now indicates that most people it previously thought would buy unsubsidized marketplace coverage in 2016 will instead buy health insurance in the individual market outside the marketplaces this year.  There’s also increasing evidence that fewer people have shifted from employer-based coverage to the marketplaces than CBO and other analysts had expected. 

In addition, CBO now expects roughly 3 million more people to get coverage through the Medicaid expansion by 2025 than it previously projected, likely due to more states adopting the expansion and more eligible people enrolling in expansion states. 

In other words, the expected distribution of enrollment through various health coverage sources — employers, Medicaid, the marketplaces, and the outside individual market — may change under CBO’s updated coverage estimates.  But CBO’s estimate of the number of people who will gain coverage under health reform may not change much.