How CBO Defines and Estimates Health Insurance Coverage for People Under Age 65

In the United States, most people under age 65 are covered by private health insurance that they or their family members obtain through their employers (referred to as employment-based, or group, coverage). A smaller number of people buy private health insurance individually (through what is known as the nongroup market). Nongroup policies are available through the health insurance marketplaces established under the Affordable Care Act (ACA) or outside of them, through brokers or directly from insurers. Two of the major sources of public insurance coverage for people under 65 are Medicaid and the Children’s Health Insurance Program (CHIP).

The federal government subsidizes private and public insurance coverage through various tax preferences and federal programs. Because those subsidies affect the federal budget in many ways, defining what constitutes coverage and estimating health insurance coverage for people under 65 are important steps in the process of preparing the Congressional Budget Office’s baseline budget projections. The most recent year for which actual coverage data are available serves as the starting point for CBO’s projections of health insurance coverage. This report provides details about that starting point. Specifically, the report:

• Describes how CBO defines health insurance coverage (private and public) for people under 65 who are not institutionalized and who are not members of the active-duty military;
• Explains how the agency estimates the number of insured and uninsured people in that population for the most recent year for which data on actual coverage exist; and
• Describes where CBO obtains the data to estimate coverage, the limitations of those sources, and how the agency adjusts its estimates because of those limitations.