Obamacare to cut work hours by equivalent of 2 million jobs -CBO

WASHINGTON Tue Feb 4, 2014 1:01pm EST

WASHINGTON Feb 4 (Reuters) - President Barack Obama's healthcare law will reduce American workforce participation by the equivalent of 2 million full-time jobs in 2017, the Congressional Budget Office said on Tuesday in a report that could fuel Republican efforts to paint the law as a job killer.

In its latest U.S. fiscal outlook, the nonpartisan CBO said the health law would prompt some lower-income workers to limit their hours to avoid losing federal subsidies that are available under the law to help pay for health insurance.

The CBO said the biggest impact on work hours from the health law would begin in 2017 because major provisions of the law will be well under way by then. The CBO said there would be smaller declines in work hours that would occur before then.

Work hours would be reduced by the equivalent of 2.5 million jobs in 2024, the agency said.

Republicans have long argued that the Patient Protection and Affordable Care Act (ACA) is a job killer that would discourage employers from hiring full-time workers.

"The ACA also will exert conflicting pressures on the quantity of labor that employers demand, primarily during the next few years," the agency said.

But CBO said the expected drop in work hours between 2017 and 2024 would result largely from worker decisions not to participate in the labor force, rather than from higher unemployment or the inability of part-time workers to find full-time hours.

"The estimated reduction stems almost entirely from a net decline in the amount of labor that workers choose to supply, rather than from a net drop in businesses' demand for labor," CBO said.

According to the report, federal subsidies can be substantial, particularly for lower-wage workers who receive more under the law's sliding income scale. But that also means the benefits can be phased out as a worker's income rises.

"The phaseout effectively raises people's marginal tax rates (the tax rates applying to their last dollar of income), thus discouraging work," CBO said.

The agency also said that if higher taxes were required to pay for subsidies, the effect would also be to discourage work and create other economic distortions.

The CBO said the healthcare law is not expected to reach its initial goal of enrolling 7 million uninsured Americans in health insurance this year, due to its botched rollout.

In a fresh forecast for 2014, the CBO estimated that only 6 million people would sign up for private coverage through new health insurance marketplaces. Technical problems that largely paralyzed the website HealthCare.gov after its initial rollout discouraged many Americans from enrolling.

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Comments (5)
pappawtom wrote:
So a lot of people will decide to work fewer hours in order to keep the subsidy for health care, who would have guessed that if it had not been for the CBO! Really, are these people in our government so disconnected from the rest of us that for them to make these kinds of statements is absurd.
Now that is out of the way, just where exactly are these people who do that going to get enough money to live on? The government I suppose will be their reasoning but they don’t stop to think that just where does the government get it’s money to pay all these people? This ACA is going to destroy this nation. Mark it down you heard it first here.
We have been on the slope of decline since the war on poverty started and now it will be accelerated to such a degree that by 2100 we will no longer exist in any semblance of the nation we started out as! Don’t believe then just watch.

Feb 04, 2014 1:32pm EST  --  Report as abuse
Hatsin wrote:
Wow, people respond to economic incentives put forth by the government? I am shocked, shocked I say.

Feb 04, 2014 1:41pm EST  --  Report as abuse
Any way you slice it Obamacare is a scourge. As for me and mine, every adult, their spouses and adult children in the family are voting against anyone who had anything to do with this ruse. It is a deceptive scourge designed to control and destroy. Quite opposite of how it was sold. Additionally, Americans haven’t even begun to endure the sub minimal type of ” health care” they are going to experience. Mid- terms are coming. VOTE THEM OUT !!!!!!!

Feb 04, 2014 1:45pm EST  --  Report as abuse
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