It will cost the U.S. government almost $700 billion in subsidies this year help provide Americans under age 65 with health insurance through their jobs or in government-sponsored health programs, according to a report from the nonpartisan Congressional Budget Office.
The subsidies come from four main categories. About $296 billion is federal spending on programs like Medicaid and the Children’s Health Insurance Program, which help insure low-income people. Almost as big are the tax write-offs that employers take for providing coverage to their workers. Medicare-eligible people, such as the disabled, account for $82 billion. Subsidies for Obamacare and for other individual coverage are the smallest segment, at $55 billion.
In total, the subsidies are equivalent to about 3.4 percent of the U.S. gross domestic product.
Also known as the Affordable Care Act, Obamacare reduced the number of uninsured, but 29 million people will likely go without health coverage in an average month this year, the CBO said. Thirty-five million Americans could lack coverage by 2028 as rising premiums and the elimination of the individual mandate drive more people to drop coverage.
The subsidies in the Affordable Care Act are designed to insulate people in the program from premium increases. The CBO projected that monthly premiums for a mid-range plan in the program will increase by 15 percent by 2019, and by about 7 percent annually through 2028.