CBO Projects $33.6 Trillion in Health Insurance Subsidies by 2036
The Congressional Budget Office projects that federal health insurance subsidies will total $33.6 trillion from 2026 through 2036, even as the number of uninsured people is projected to rise from 30 million to 37 million.
The figures come from a CBO report published July 23, 2026, prepared with the staff of the Joint Committee on Taxation. They are baseline projections, not a newly enacted $33.6 trillion appropriation and not an estimate of all health care spending in the United States.
What the $33.6 trillion includes
The projection covers federal support for health insurance through major public programs and tax provisions. It includes subsidies connected to Medicare, Medicaid and the Children’s Health Insurance Program, employment-based coverage, premium tax credits and related spending, and supplemental or partial benefits.
Medicare accounts for the largest share, at $16.1 trillion, or 48% of the projected total. Medicaid and CHIP account for $8.4 trillion, or 25%. Employment-based coverage accounts for $7.2 trillion, or 21%. Premium tax credits and related spending account for $1.2 trillion, or 4%, while supplemental or partial benefits make up $0.7 trillion, or 2%.
Employment-based coverage is included because the federal tax treatment of employer-sponsored insurance functions as an indirect subsidy. The category does not mean the federal government pays the full cost of workers’ health plans.
Annual subsidies are projected to grow
CBO and JCT project that net federal health insurance subsidies will rise from $2.4 trillion in calendar year 2026 to $3.9 trillion in 2036. As a share of gross domestic product, the projected total would increase from 7.4% to 8.4%.
CBO says Medicare contributes most to that overall increase, with projected subsidies rising by about $900 billion between 2026 and 2036. The increase is therefore not spread evenly across the programs in the projection.
The GDP comparison measures projected federal subsidy costs against the size of the economy. It does not mean that households will each pay an equal share, and it does not represent the total cost of hospital care, physician services, prescription drugs or other medical treatment.
More people are projected to be uninsured
CBO projects that an average of 318 million people will have health insurance in any given month during the 2026-2036 period. Nearly 50% of the total population is projected to be enrolled in employment-based coverage.
At the same time, the agency projects that the number of uninsured people will increase from 30 million in 2026 to 37 million in 2036. CBO attributes much of that increase to provisions of the 2025 reconciliation law that are expected to reduce enrollment in Medicaid and CHIP and, to a lesser extent, in Affordable Care Act marketplaces and the Basic Health Program.
CBO also estimates that about 60% of people who would be uninsured in 2036 would be eligible for subsidized coverage. That is a projection about eligibility and enrollment, not a current count of people who have declined available insurance.
How the 2025 law could affect coverage
The Congressional Research Service says Public Law 119-21 includes changes affecting Medicaid, CHIP, Medicare and private health insurance. The law includes Medicaid community-engagement requirements for certain people, changes to provider-tax and state-directed-payment rules, new cost-sharing requirements for some Medicaid expansion enrollees, and changes to marketplace premium-tax-credit eligibility and verification rules.
Those provisions are expected to affect coverage through eligibility, enrollment procedures, state financing and participation decisions. The CBO projection is an analysis of how the enacted law interacts with its baseline assumptions; it is not a guarantee of the final number of uninsured people.
The Centers for Medicare & Medicaid Services published a proposed rule on July 21, 2026, to implement a Medicaid provider-tax provision in the law. The proposal would establish new indirect hold-harmless thresholds and includes provisions that generally begin taking effect October 1, 2026, with some thresholds for Medicaid expansion states beginning October 1, 2027. The rule is subject to public comment and could change before it is finalized.
What it means for readers and taxpayers
For people enrolled in Medicare, the projection reflects the federal cost of supporting coverage for a large and aging population. For Medicaid and CHIP enrollees, future eligibility, paperwork, cost-sharing and state implementation decisions may matter more directly. People with employer coverage are part of the federal subsidy picture through the tax treatment of their plans, even when they do not receive a direct government payment.
For taxpayers, the report shows that the annual federal subsidy bill is projected to grow faster than GDP over the decade. But the report does not assign an equal household bill or predict a single tax increase. It describes the federal cost of current-law coverage arrangements under CBO and JCT assumptions.
What to watch next
The main items to watch are implementation of the 2025 reconciliation law, CMS regulations, state Medicaid and CHIP enrollment data, marketplace eligibility rules, employer-plan participation and costs, Medicare enrollment, and future CBO baseline revisions.
The central conclusion of the July 23 report is that federal support for health insurance can continue to grow while the projected number of uninsured people also rises. Both outcomes depend on program rules, enrollment behavior, economic conditions and future policy changes.
Sources
- Congressional Budget Office: Federal Subsidies for Health Insurance, 2026 to 2036
- Congressional Research Service: Health Provisions in P.L. 119-21
- CMS: Medicaid Health Care-Related Taxes Proposed Rule
- Associated Press: CBO Federal Deficits and Debt Outlook
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