How CBO Models Firms' Behavior in HISIM2 in Its Baseline Budget Projections as of March 6, 2020

CBO and the Joint Committee on Taxation use HISIM2 to estimate the major sources of health insurance coverage and associated premiums for the U.S. population under age 65.

HISIM2 is used in conjunction with other models (for example, those for related taxes, Medicaid, and Medicare) to develop baseline insurance coverage projections and their associated budgetary costs. It is also used to estimate the effects of proposed changes in policies that affect health insurance coverage.

CBO uses HISIM2 to model firms’ decisions to offer health insurance as well as households’ decisions to enroll in health insurance. Like all of CBO’s models, HISIM2 is regularly updated. This slide deck describes the analytical methods used in HISIM2 to model firms’ decisions in CBO’s baseline budget projections as of March 6, 2020.