A major infrastructure bill would expand coverage to about 3.9 million uninsured individuals but could lead to a nearly 3 million decrease in employer-sponsored enrollment over the next decade, according to the Congressional Budget Office (CBO).
The nonpartisan congressional scorekeeper released an analysis Tuesday of healthcare items in a massive infrastructure package being debated now in Congress. The CBO looked at parts of the package that extend enhanced subsidies on the Affordable Care Act’s marketplace, close the Medicaid coverage gap and enact several other reforms.
The CBO looked at the impact if the legislation gets enacted on healthcare coverage from 2022 to 2031. It found that there would be a net decline of 3.9 million people without insurance.
Of that figure, there would be a 4 million person increase in Medicaid enrollment and a 3.6 million increase in subsidized enrollment on and off the ACA’s exchanges.
But the CBO is also estimating a 1 million enrollee decrease in unsubsidized on- and off-exchange enrollment and another 2.8 million decline in employer-sponsored insurance.
A key priority among Democrats in the infrastructure package is to extend enhanced subsidies for ACA marketplace coverage, which were originally passed under the American Rescue Plan Act but expire after the 2022 coverage year.
The CBO looked at extending the boosted tax credits from 2023 and beyond, estimating they would increase federal deficits by $209.5 billion over the next decade. The boosted credits, though, would also increase marketplace enrollment by 1.4 million fewer uninsured individuals and 600,000 fewer people with coverage off the exchanges.
In addition, another 1.6 million fewer people would get employer-sponsored coverage “primarily driven by a reduction in offers as a response to the increased subsidies for coverage through the marketplace,” the analysis said.
Another major priority for Democrats is to close the Medicaid coverage gap and extend insurance to people eligible for Medicaid expansion in states that choose not to expand.
Legislation passed by House committees would create a program like Medicaid that would go into effect in 2025 and give coverage to these eligible individuals in non-expansion states.
The new program, alongside other reforms such as a penalty for expansion states to withdraw from expanding Medicaid, would increase Medicaid enrollment by 3.8 million annually over the next decade.
The increase would result in 2.3 million fewer uninsured people a year but also lead to 900,000 fewer people with employer-based insurance.
“The estimated effect on the number of people with employment-based coverage is primarily driven by fewer people taking up an offer of health insurance coverage,” the CBO said.
Another key change is a proposed change to the employer-sponsored coverage affordability test. An individual is not eligible to get premium tax credits to lower their insurance coverage if they have an employer-sponsored plan, but they could get those credits if the plan is unaffordable.
The current affordability test states that an employer-sponsored plan must not cost a consumer more than 9.83% of an employee’s income this year and cover at least 60% of the total cost of benefits.
But the infrastructure package would change the test to 8.5% of an individual’s income.
“If an employee’s contribution exceeded 8.5% of household income, they and their dependents would be able to purchase subsidized coverage through the marketplaces,” the CBO said.
The change, if enacted, would lead to 300,000 more people enrolling in non-group coverage and fewer than 300,000 people getting employment-based coverage.
But it remains unclear which of these provisions would make it into the final package. Centrist Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona have balked at the initial $3.5 trillion price tag for the package.
Senate Majority Leader Chuck Schumer said Tuesday that the goal is for Democrats to reach a deal by the end of the week on a framework on a final package.
"The pace has picked up. The desire to get it done is strong," Schumer said.