CBO: Obamacare Will Push 7M Out of Employer-Based Plans

November 15, 2013 - 3:35 PM

President Barack Obama

President Barack Obama (AP Photo)

(CNSNews.com) - Doug Elmendorf, director of the Congressional Budget Office, said in a presentation at the University of Pennsylvania’s Wharton School on Wednesday that the Affordable Care Act—AKA Obamacare--will push a net of seven million people out of employer-based health-insurance plans.

“About 7 million fewer people will have employment-based health insurance,” says one of the slides from Elmendorf’s presentation. “(That is the net decline: More people who would have had such insurance will not have it under the ACA, but others who would not have had such insurance will gain it under the ACA.)”

Elmendorf attributed this information to the CBO’s and the Joint Committee on Taxation’s joint projections for the impact of Obamacare through 2023.

Elmendorf’s presentation also said that another 10 to 15 million people who would have bought health insurance plans in the individual market if Obamacare did not exist would end up buying plans with higher premiums under Obamacare because of mandates Obamacare imposes on the insurance companies offering plans.

“About 10 to 15 million people who would have bought insurance in the nongroup market without the ACA will face higher premiums before subsidies, on average, primarily because insurance policies will be required to cover a much larger share of health care costs,” said Elmendorf’s presentation. “Some but not all of those people will receive subsidies through the exchange.”

Elmendorf said that in 2023, under Obamacare, the federal government will pay $1.615 trillion for health-care expenses. This will include $903 billion no Medicare, $578 billion on Medicaid and the Children’s Health Insurance Program (CHIPS), and $134 billion on Obamacare premium subsidies and related expenses.

In an early estimate on the impact of Obamacare published in May, the CBO also said that a net of 7 million people will be pushed out of employer-based health-insurance by Obamacare.

That analysis said that in 2015 a net of 2 million fewer people would get employer-based health insurance because of Obamacare, and that that number would grow to 6 million in 2016, and to 7 million people by 2018. It would then stay at 7 million through 2023.

On July 2, the Treasury Department announced that the Obama administration would not enforce Obamacare’s statutory mandate that after Dec. 31 of this year employers with 50 or more full-time workers must provide their workers with health-insurance or else pay a $2,000-per-worker annual penalty to the federal government. The administration said it would only begin enforcing that part of the law in 2015.

On July 30, the CBO sent a letter to House Budget Chairman Paul Ryan (R.-Wis.) presenting its analysis of the impact of the Obama administration’s decision not to enforce Obamacare’s employer mandate during 2014.

The analysis said that that decision would result in a million fewer people next year having employer-based insurance, and that about half of those would end up uninsured for the year.

“All told, as a result of the announced changes and new final rules, roughly 1 million fewer people are expected to be enrolled in employment-based coverage in 2014 than the number projected in CBO’s May 2013 baseline, primarily because of the one-year delay in penalties on employers,” CBO said in that letter.

“Of those who would otherwise have obtained employment-based coverage, roughly half will be uninsured and the others will obtain coverage through the exchanges or will enroll in Medicaid or the Children’s Health Insurance Program (CHIP), CBO and JCT estimate. In particular, fewer than half a million additional people are expected to be uninsured in 2014 than the number projected in the May baseline.”

The CBO May baseline estimated that even under full implementation of Obamacare—including all its mandates on individuals, employers and insurers—tens of millions of people in America would remain uninsured even a decade from now.

That estimate said 44 million would be uninsured in 2014, 37 million in 2015, 31 million in 2016, and 30 million each year from 2017 through 2020. In 2021, CBO estimated, the number of people uninsured—even with Obamacare fully in force—would climb to 31 million and stay at that level through 2022 and 2023.