Health and Medical Insurance Carriers NAICS 524114

Jun 19, 2025 - Reconciliation Bill Could Drive Up Number of Uninsured

• The uninsured rate for health coverage in the US is around 8.2%, or about 27 million people (per the Kaiser Family Foundation), a number that could grow by more than 10 million this year if the controversial reconciliation package working its way through Congress becomes law. The Congressional Budget Office’s (CBO) analysis of the reconciliation bill, part of which makes changes to Medicaid eligibility, found it will significantly increase the number of uninsured Americans. It will boost uninsured rates by 3% or higher in about 16 states, per the CBO, with the biggest jumps expected in California, Florida, Texas, New York, and Illinois. If the bill becomes law at the same time tax credits under the Affordable Care Act expire at the end of the year as planned, the CBO estimates the number of uninsured Americans could go as high as 26 million and force up uninsured rates in 35 states.
• Health and medical insurance industry sales grew 10% over the year prior to $3.1 billion in 2024, according to the Bureau of Labor Statistics, driven by a boost in enrollment in insurance Marketplaces. Health insurance bought through the Affordable Care Act’s Marketplaces rose 31% in 2024 to cover a total of 21.4 million people. The bump largely comes from customers buying Marketplace coverage after a COVID-era rule requiring states to keep Medicare patients in the exchanges, even if they would have been disenrolled due to eligibility, ended in early 2023. Lower-income customers drove the gains (they were most likely to be disenrolled from Medicaid), with a 54% rise in enrollment among applicants with household incomes between 100% to 150% of the US poverty level. In addition, Medicare Advantage is growing in popularity with 31 million seniors enrolled in the program, helping to boost overall industry revenue.

• The use of AI to screen health insurance claims and potentially deny coverage is coming under increased scrutiny and some US states are responding with new laws to limit its use. Insurance companies are keen to bring costs down using AI in a system where a third of every dollar spent on healthcare goes to administrative costs. Providers, however, are worried that inaccuracies and biases in AI technology will result in erroneous denials. In early 2025 California passed the Physicians Make Decisions Act, which ensures licensed healthcare providers make the final decision on medical treatment instead of AI and technology programs. Similar laws requiring insurance companies to disclose to patients and providers when they are using AI are being considered in Georgia, New York, Oklahoma, and Pennsylvania.
• A small portion of the population is responsible for a very large percentage of total health spending in a given year, according to an analysis of Medical Expenditure Panel Survey (MEPS) data by Health System Tracker. People aged 55 and over accounted for 55% of overall health spending in 2021 despite making up only 31% of the population. People under age 35 made up 44% of the population but were responsible for only 21% of health spending. Average healthcare spending per person for enrollees ages 60-64 in large employer plans was higher than average spending for traditional Medicare beneficiaries ages 65-69.