Federal subsidies for employment-based health coverage will grow to $840 billion in 2036, up from $478 billion in 2026, according to a July report from the Congressional Budget Office.
Five things to know:
- From 2026 to 2036, employer-sponsored coverage subsidies will total $7.2 trillion, or 21.4% of the $33.6 trillion in overall projected federal health insurance subsidies. That trails Medicare ($16.1 trillion) and Medicaid/CHIP ($8.4 trillion) subsidies.
- Employer coverage is expected to carry the smallest federal subsidy-per-enrollee of any source in 2036, at $4,990. In comparison, Medicare’s projected average is $26,920 per enrollee.
- Employer-based subsidies are expected to grow 75.5% over the next decade. Rising real per-beneficiary subsidies account for the largest share of the growth, followed by healthcare price increases. Enrollment growth contributes the least.
- Most of the employer subsidies come from the tax exclusion that shields employer and employee premium contributions from federal income and payroll taxes, which covers about 30% of premium costs on average.
- Employment-based insurance is expected to remain the largest source of coverage by headcount, with enrollment rising from 165.5 million in 2025 to 170.7 million in 2036.
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