Summary
This letter responds to a request for information about the Congressional Budget Office’s cost estimates for specified health care provisions contained in the reconciliation legislation being considered by the House of Representatives. The relevant sections would extend eligibility for and increase the amount of premium tax credits and cost-sharing reductions available for health insurance through the marketplaces established under the Affordable Care Act (ACA). They also would establish a federal Medicaid program for states that have not expanded Medicaid under the ACA.
The reconciliation process stems from S. Con. Res. 14, the Concurrent Resolution on the Budget for Fiscal Year 2022, which instructed 13 committees to recommend legislative changes that would affect deficits over the 2022-2031 period. As part of that process, the House Committee on Ways and Means and the House Committee on Energy and Commerce approved legislation on September 15, 2021. On September 27, 2021, the House Committee on the Budget combined the recommendations of the committees and reported H.R. 5376, a bill to provide for reconciliation pursuant to title II of S. Con. Res. 14.
CBO has not yet completed a cost estimate of H.R. 5376 as a whole. This letter provides estimates for the provisions in that bill for which you have requested additional information.
Estimated Federal Costs and Changes in Health Insurance Coverage
You asked how the reconciliation legislation would affect health insurance coverage for people under age 65. CBO and the staff of the Joint Committee on Taxation (JCT) have analyzed the following provisions:
- Section 137501—Improve Affordability and Reduce Premium Costs of Health Insurance for Consumers;
- Sections 137504, 137505, and 30701: provisions affecting coverage for people with low income, particularly those whose income is below 138 percent of the federal poverty level (FPL)—Temporary Expansion of Health Insurance Premium Tax Credits for Certain Low-Income Populations, Ensuring Affordability of Coverage for Certain Low-Income Populations, and Closing the Medicaid Coverage Gap;
- Section 137507—Special Rule for Individuals Receiving Unemployment Compensation; and
- Section 137502—Modification of Employer-Sponsored Coverage Affordability Test in Health Insurance Premium Tax Credit.
CBO and JCT estimate that enacting those provisions would increase deficits by $553.2 billion over the 2022-2031 period. Estimates for all provisions account for interactions with section 137501.
Over the 2022-2031 period, CBO and JCT estimate, enacting the provisions discussed here would result in a net decline of about 3.9 million people without health insurance. The components of that change (which do not sum to the total because of rounding) would be as follows:
- 4.0 million increase in Medicaid enrollment;
- 3.6 million increase in subsidized nongroup enrollment;
- 1.0 million decrease in unsubsidized nongroup enrollment; and
- 2.8 million decrease in enrollment in employment-based coverage.
CBO and JCT estimate that under the legislation, in 2031, 23.6 million people under the age of 65 would be uninsured—a reduction from the current-law total of 27.7 million people.
CBO and JCT classified people who do not have health insurance into mutually exclusive groups on the basis of the most heavily subsidized option available to them.
Of those who would be uninsured under the bill’s provisions, CBO and JCT estimate, 24 percent would be eligible for Medicaid or the Children’s Health Insurance Program (CHIP), 18 percent would be eligible for a premium tax credit with a dollar value greater than zero through the marketplaces, 30 percent would have access to employment-based coverage, and the remaining 28 percent would be ineligible for subsidized coverage.