Rate of US uninsured to rise to 8.9% in the next decade, Congressional Budget Office says

By Amina Niasse

NEW YORK (Reuters) - The rate of Americans who are uninsured will rise to 8.9% over the next decade from 7.7% in 2024, driven by rising immigration and reduced eligibility for 19-to-24 year-olds following federal government policy changes, according to a Congressional Budget Office report released on Tuesday.

"We expect the uninsured rate for the immigrants arriving in the surge to be roughly four times the rate for the overall population," said Jessica Hale, an analyst at the Congressional Budget Office, Congress' non-partisan budget agency.

"This is largely the result of eligibility for major federal health programs, which is contingent in part on a person's immigration status," Hale added.

The 2023 termination of a COVID-19 pandemic-era policy requiring states to maintain enrollment for Medicaid recipients and the expiration of additional subsidies on Obamacare plans are expected to erode the percentage of younger adults who are insured.

Most of the decline in uninsured will happen in the next two years. Between 2027 and 2034 the rate of uninsured should stabilize at around 9%, the report said. This figure, representing 32 million people, is lower than pre-pandemic levels due to a projected older U.S. population.

The majority of those above age 65 in the U.S. are covered by Medicare. In 2034, 17 million people aged 19 to 24 are expected to be uninsured, Hale said.

This age group is less likely to be offered employer-sponsored plans and represents a higher portion of undocumented immigrants, who may be ineligible for government-funded plans.

While the Affordable Care Act (ACA), widely known as Obamacare, extends coverage for dependent children to age 26, just 15% of young adults are on their parents employer-sponsored plans, the CBO said.

Enrollment in employer-sponsored plans, the most common form of coverage in the U.S., will grow to 170 million in 2034 from 164 million in 2024, due to lower eligibility for Obamacare subsidies as wage growth expands the middle-income populace.

Enhanced subsidies for plans introduced by the ACA were extended through the Inflation Reduction Act and are expected to expire in 2025. For middle-income households purchasing plans through ACA marketplaces such as HealthCare.gov, this policy provides a tax credit and subsidizes the cost of health insurance premiums.

The rate of uninsured people in the U.S. reached a record low of 7.2% in 2023. In a May report, the CBO projected that 3.8 million Americans would become uninsured as a result of the expiration of marketplace subsidies.

(Reporting by Amina Niasse; editing by Caroline Humer and Bill Berkrot)