CBO: Subsidies, taxes and penalties to cost government $660B in 2016

Listen

The federal government will spend approximately $660 billion on subsidies, taxes and penalties associated with health insurance for people under age 65, according to projections from the Congressional Budget Office.

The projected $660 billion net subsidy from the federal government accounts for 3.6 percent of gross domestic product, according to the report. That amount is projected to climb at an average annual rate of 5.4 percent, reaching $1.1 trillion — or 4.1 percent of GDP — by 2026.

Here are six more things to know from the CBO report.

1. For the period between 2017 and 2026, the projected net subsidy is $8.9 trillion.

2. Two types of costs account for most of this amount, according to the report. Federal spending for Medicaid and CHIP benefits provided to people under 65 is projected to reach $3.8 trillion, or 43 percent of the total net subsidy. This includes the $1 trillion in subsidies for people eligible for Medicaid under the Affordable Care Act.

3. Additionally, federal subsidies associated with employer-sponsored insurance for people under 65 are projected to reach $3.6 trillion, or 41 percent of the total net subsidy.

4. Medicare benefits for non-institutionalized beneficiaries represent a much smaller cost to the government. These are projected to amount to $1 trillion, or 11 percent of the total net subsidy, according to the report.

5. Subsidies for health insurance obtained in the nongroup market, including the insurance marketplaces and through the Basic Health Program, are estimated to cost $0.9 trillion, or 10 percent of the total net subsidy.

6. The cost of subsidies for Medicare benefits and health insurance obtained in the nongroup market are offset to a small extent — $0.4 trillion, or 5 percent — by taxes and penalties collected from health insurance companies, uninsured people and employers.

Copyright © 2021 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.

 

Featured Whitepapers

Featured Webinars