CBO Projects $33.6 Trillion in Federal Health Insurance Subsidies From 2026–2036

Federal health insurance subsidies are projected to total $33.6 trillion from 2026 through 2036, with their cost rising from 7.4% of the economy to 8.4% over that period, according to a new estimate from the Congressional Budget Office and staff of the Joint Committee on Taxation.

“Federal subsidies for health insurance total $33.6 trillion over the 2026–2036 period in CBO and JCT’s projections,” the agencies said in a report published Thursday. “Those estimated subsidies grow from 7.4 percent of gross domestic product (GDP) in 2026 to 8.4 percent of GDP in 2036.”

In dollar terms, the agencies project those net federal subsidies will increase from $2.4 trillion in 2026 to $3.9 trillion in 2036 under current law. CBO counts the figures as net of related payments to the government, making them a measure of the federal government’s overall support for health coverage rather than a tally of gross spending alone.

The category is broader than Affordable Care Act marketplace aid. In CBO’s accounting, federal subsidies for health insurance include Medicare, Medicaid and the Children’s Health Insurance Program, tax preferences tied to employment-based coverage, premium tax credits and related spending, and supplemental or partial health benefits.

Medicare is by far the largest piece of the total. CBO and JCT project Medicare subsidies will reach $16.1 trillion over the 2026-2036 period, or 48% of all federal health insurance subsidies. Medicaid and CHIP account for $8.4 trillion, or 25%, while subsidies connected to employment-based coverage total $7.2 trillion, or 21%.

The remaining shares are smaller but still significant in budget terms. Premium tax credits and related spending are projected at $1.2 trillion, or 4% of the total, and supplemental or partial benefits at $700 billion, or 2%.

CBO said Medicare contributes the most to overall growth in federal health insurance subsidies over the decade. Medicare subsidies alone are projected to increase by about $900 billion over the period, making the program the main driver of the broader rise in health subsidy costs.

The report also sketches the coverage landscape behind those spending totals. CBO projects that, on average, 318 million people will have health insurance in a given month during 2026-2036. About half of the population is expected to have employment-based coverage.

At the same time, an average of 36 million people, or about 10% of the population, are projected to be uninsured in a given month over the decade. The uninsured population is projected to rise from 30 million in 2026 to 37 million in 2036.

CBO attributed much of that increase to provisions of the 2025 reconciliation act that reduce enrollment in Medicaid and CHIP, and to a lesser extent marketplace coverage. Even so, the agency said about 60% of uninsured people in 2036 would still be eligible for subsidized coverage.

The report offers a more detailed look at the health coverage estimates that underpin CBO’s broader budget baseline released Feb. 11. In that outlook, CBO projected annual federal deficits rising from $1.9 trillion in fiscal 2026 to $3.1 trillion in 2036, with debt held by the public reaching about 120% of GDP by 2036. Within that fiscal picture, federal health insurance subsidies are projected to absorb a larger share of the economy over the next decade.