Subsidies for Health Will Cost US $ 685,000 Million per Year
WASHINGTON - May 28, 2018
This year, the US government will spend nearly US $ 700 billion to provide subsidies for Americans under 65 to have health insurance through their jobs or to the government-sponsored programs, according to a report from the Congressional Budget Office and the staff of the Joint Committee on Taxation (JCT).
That amount includes the cost of preferential tax treatment for work-related insurance coverage, the cost of Medicaid and Medicare coverage for people under age 65, and government payments for other kinds of health insurance coverage—such as plans purchased through the marketplaces established under the Affordable Care Act (ACA).
The subsidies come from four main categories. Approximately US $ 296,000 million are federal expenditures in programs such as Medicaid and the Children's Health Insurance Program, which help provide coverage for low-income people.
Almost as large are the tax breaks that employers receive to provide coverage to their workers. People eligible for Medicare, such as those with disabilities, represent US $ 82 billion. Subsidies for Obamacare and for other individual coverage are the smallest segment, with US $ 55 billion.
In total, the subsidies are equivalent to approximately 3.4% of the Gross Domestic Product (GDP) of the United States.
Obamacare, also known as the Affordable Care Act, reduced the number of people without health insurance, but 29 million individuals probably do not have health coverage in an average month this year, the Budget Office said.
Thirty-five million Americans may lack coverage by 2028 as premiums increase and the elimination of the individual mandate pushes more people to abandon coverage
Subsidies under the Affordable Care Act are designed to protect the people covered by the program from premium increases. The Budget Office projected that the monthly premiums for a mid-range program plan will increase by 15% by 2019 and 7% annually by 2028.
One of the reasons for the increase in premiums is the performance of President Donald Trump. Last year, it put a limit on funds for cost-sharing reduction payments made to insurers with Obamacare to help Americans cover health costs.
Failure to pay these subsidies, less enforcement of a rule that requires people to have insurance and limited competition meant that insurers increased their premiums by approximately 34% between 2017 and 2018. This increased the cost of subsidies for the federal government, according to the Budget Office.