Healthcare Business News

CBO lowers 2014 insurance enrollment estimate by 2 million, citing exchange rollout woes

By Paul Demko
Posted: February 4, 2014 - 2:00 pm ET

The Congressional Budget Office projects that 2 million fewer individuals are expected to obtain insurance—either through Medicaid or the exchanges—in 2014 than previously anticipated. That reduction is blamed in large part on the rocky rollout of the state and federal marketplaces.

“Those changes primarily reflect the significant technical problems that have been encountered in the initial phases of implementing the ACA,” the CBO document report (PDF) notes.

The CBO estimates that 6 million individuals will purchase a health plan through the exchanges in 2014—a reduction of 1 million from previous estimates. But those numbers are expected to swell in the ensuing years. Starting in 2017, up to 25 million individuals are expected to obtain coverage through the exchanges. Roughly 80% of those customers are anticipated to be eligible for federal subsidies.

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The CBO projects that 8 million individuals will be added to the Medicaid rolls in 2014. That's also 1 million fewer than previously anticipated. That number's expect to grow to at least 12 million in 2015, in part because more states are expected to expand Medicaid.

Overall, the CBO projects that 13 million additional individuals will have health insurance in 2014 because of the federal healthcare reform law. That figure is expected to grow to 20 million in 2015 and 25 million the following year. Even so, by 2024, there are still expected to be 31 million individuals—or roughly 1 in 9 residents—lacking coverage. Of those, 30% are anticipated to be unauthorized immigrants who are largely ineligible for Medicaid benefits and exchange subsidies. In addition, 45% are expected to be individuals who choose to forego insurance even though they have access to affordable coverage either through an employer or the exchanges.

The CBO projects that programs designed to protect insurers from risk in the new insurance marketplace—the risk adjustment, reinsurance and risk corridors programs—will cost the federal government $208 billion through 2024. But the federal agency now expects those programs to bring in $215 billion in revenues—meaning the government will actually net $8 billion from the programs. Previously, the CBO had scored the programs as revenue neutral. Some Republicans, including Sen. Marco Rubio (R-Fla.), have decried the “risk corridor” program—which provides payments to insurers with higher-than-anticipated claims—as a government bailout of the insurance companies.

Follow Paul Demko on Twitter: @MHpdemko

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