Critics of the Affordable Care Act have little room for gray areas, mixed results or nuances in any analyses regarding the impact of the health-care law. Thus, when the nonpartisan Congressional Budget Office released on Tuesday its budget and economic projections for the next decade, the agency’s conclusions set off another round of howling about “killer” legislation that is best repealed.
The CBO, which evaluates the future effects of federal laws and policies, estimates that from 2017 to 2024, when the major provisions of the Affordable Care Act have taken full effect, the law “will reduce the total number of hours worked, on net, by about 1.5 percent to 2 percent.” The reduction would be the equivalent of 2.5 million full-time workers by 2024.
A reduction in the labor force is not inconsequential, to be sure. But the report clearly states that this effect will be “almost entirely because workers will choose to supply less labor” and not the result of “a net drop of businesses’ demand for labor” or an increase in unemployment or underemployment. There is no compelling evidence, the report said, that part-time employment has increased as a result of the law.
Among other conclusions, the CBO estimates that the law, especially the expansion of Medicaid, will increase overall demand for goods and services which, in turn, will boost demand for labor over the next few years.
In short, the decrease in working hours is not a question of the health-care law choking off jobs, but of individual workers making the choice — for any number of reasons — to work fewer hours than they would have without health coverage. The Affordable Care Act is designed to address one of the big drawbacks of employer-based health coverage: workers with pre-existing conditions or serious illnesses fearful of losing coverage with a change in employment — or staying in jobs for the insurance. Millions of Americans now have access to health coverage outside their places of employment along with subsidies to make it affordable.
This indicates real portability, providing workers options to change jobs or number of hours worked to suit their needs — whether it is to scale back hours or drop out of the workforce altogether to attend school, start a private business or take care of family. The potential of the law is that workers stand to gain a sense of security and confidence about coverage to make rational employment choices.
It is unfortunate that the CBO’s careful assessment is lost in the noise about “job-killing” among those for whom any flaw, real or fabricated, is reason to repeal the law.