Federal Subsidies for Health Insurance: 2023 to 2033

The federal government subsidizes health insurance for most Americans through various programs and tax provisions. The Congressional Budget Office and the staff of the Joint Committee on Taxation (JCT) regularly prepare baseline projections of the federal costs associated with each kind of subsidy and of the number of people with health insurance coverage through different sources. Those projections reflect the assumption that current laws governing taxes and spending generally remain unchanged. This report presents the latest of those projections, which, for the first time, reflect the entire population instead of only the civilian noninstitutionalized population younger than 65.

Federal Subsidies. In 2023, federal subsidies for health insurance minus certain related payments made to the federal government are estimated to be $1.8 trillion, or 7.0 percent of gross domestic product (GDP). In CBO and JCT’s projections, those net subsidies grow substantially, reaching $3.3 trillion, or 8.3 percent of GDP, in 2033. Over the 2024–2033 period, the 10 years spanned by CBO’s current baseline projections, those subsidies total $25.0 trillion, distributed as follows:

• Medicare—$11.7 trillion (47 percent),
• Medicaid and the Children’s Health Insurance Program—$6.3 trillion (25 percent),
• Employment-based coverage—$5.3 trillion (21 percent),
• Coverage obtained through the marketplaces established by the Affordable Care Act or through the Basic Health Program—$1.1 trillion (4 percent), and
• Other federal subsidies—$0.6 trillion (2 percent).

Health Insurance Coverage. Over the 2024–2033 period, an average of 315.5 million people (91.5 percent of the population) are projected to have health insurance in any given month. Employment-based coverage is the predominant source of health insurance coverage, followed by Medicaid and Medicare. In 2023, 24.3 million people (7.2 percent of the population) are estimated to be uninsured—a record low; roughly 60 percent of those people—15.2 million—are estimated to be eligible for subsidized coverage. In CBO’s projections, in 2033, the number of uninsured people rises to 29.6 million (8.4 percent of the population)—about 60 percent of whom (17.7 million) are eligible for subsidized coverage.