CBO: 6 Million More People Will Be Insured Through an Association Health Plan or Short-Term Plan in 5 Years

Over the next five years, association health plans and short-term plans will gain about 6 million additional enrollees according to a new estimate by the Congressional Budget Office and Joint Committee on Taxation.

When association health plans and short-term plans federal rules are fully phased in, about 4 million people will choose an association health plan and another 2 are predicted to be in a short-term plan of 12-months duration. With an association health plan, employers could band together to jointly offer coverage that does not meet minimum standards for benefits that “insurers small group or non-group markets must provide.”

Healthcare Finance predicted that since younger, healthier individuals would probably join the short-term plans and depart the small group and non-group markets.  This may result in premium hikes for those left in those plans by 2 to 3 percent, CBO estimates.

Premiums for benchmark plans are expected to increase about 15% by next year and 7% per year between 2019 and 2028. According to healthcare finance, Federal subsidies for those who are insured will total $685 billion this year and will reach $1.2 trillion in 2028. Medicaid and CHIP will account for 40% of the total as well subsides from tax benefits.

The CBO also estimated that administration’s budget will reduce mandatory federal spending for health care by $1.3 trillion, or 8% every year for the next ten years. In addition, the budget would repeal the ACA expansion of Medicaid coverage, cap Medicaid spending on a per-enrollee basis, cap damages in medical liability system, and require Medicare Part D beneficiaries to pay higher out-of-pocket expenses for some prescription drugs.