could result in many fewer full-time workers in 2021. But the White
House insists that’s a good thing: Workers will have more choices.
To opponents of Obamacare, the CBO was telling the world that
President Obama’s health-care reform was an even bigger job-killer than previously thought. The report also gives Republicans a new weapon for the fall midterm elections, when they plan to use Obamacare as an argument to vote against Democrats.
But the report doesn’t predict that businesses are going to dump
workers because of Obamacare. It frames the issue in terms of worker
choice. By giving workers more options for accessing health insurance,
with possible subsidies, the ACA gives workers more freedom to work
fewer hours — which could cause a reduction in labor force
participation, the CBO report said.
“The reduction in full-time-equivalent employment that CBO expects
will arise from the ACA includes some people choosing not to work at
all and other people choosing to work fewer hours than they would have
in the absence of the law,” the report said.
For example, someone might choose to work fewer hours to lower their
income and become eligible for federally subsidized insurance. Or
someone with a health condition who felt stuck in a job that provided
health benefits can now buy insurance through a government-run
The law will have an impact on employers, too, the CBO said —
particularly when the mandate for them to provide insurance goes into
effect in 2015. A business on the cusp of having 50
full-time-equivalent employees may decide to reduce employee hours to
avoid the mandate. The law’s impact on full-time employment would be
felt mostly after 2016, when the law has finished phasing in, the CBO
Republicans seized on the CBO report as proof that Obamacare is
harming the economy and threatening Americans’ jobs.
“The CBO’s latest report confirms what Republicans have been saying
for years now. Under Obamacare, millions of hardworking Americans will
lose their jobs and those who keep them will see their hours and wages
reduced,” House majority leader Eric Cantor (R) of Virginia said in a
The White House fought the deluge of negative reaction with its own statement.
“Over the longer run, CBO finds that because of this law, individuals
will be empowered to make choices about their own lives and
livelihoods,” said White House press secretary Jay Carney.
At the White House briefing Tuesday, Jason Furman, chair of the White
House’s Council of Economic Advisers, also emphasized choice and
argued that lower labor force participation isn’t an automatic
negative — just as higher participation isn’t necessarily a positive.
“Getting rid of Social Security and Medicare would cause more
95-year-olds to work,” Mr. Furman said. But “we don’t think that would
be an effective economic strategy for boosting the economy, or
particularly wise policy.”
In its report, the CBO also lowered its estimate for enrollment in the
exchanges for 2014 to 6 million, down from 7 million, because of the
problems with HealthCare.gov and some of the state websites. The CBO
reduced its projection for Medicaid enrollment this year to 8 million
people, down from 9 million. The law required states to expand
eligibility for Medicaid — a federal-state program to insure
low-income Americans — but in 2012, the U.S. Supreme Court ruled that
states could opt out of Medicaid expansion. About half the states have
Partisan wrangling over the ACA has been a fact of life since Mr.
Obama signed it in March 2010: The Republican-controlled House has
voted some 40 times to repeal it. Now House Republicans are talking
about tying an increase in the debt ceiling to repealing a provision
of the ACA that provides risk mitigation to insurers.
Under the provision, called “risk corridors,” a health insurer that
takes in more in premiums than it ends up needing is to give some of
the excess to the government. If the premiums end up being inadequate,
the government is to cover some of the losses. Risk corridors are to
be in effect for three years, 2014 through 2016.