CBO report: Workers may reduce hours under health-care law | Deseret News National
Get Deseret News National Email Updates Every Day.
Paul Sancya, Associated Press
Moneywise

CBO report: Workers may reduce hours under health-care law

The Affordable Care Act may lead close to 2.3 million workers to leave the workforce or cut their hours over the next 10 years, according to a new Congressional Budget Office report.

But the change is about worker choice, not job loss, despite headlines to the contrary, said the Washington Post's Glenn Kessler in his "fact-checker" blog.

New sites across the Web on Tuesday blared a different message. Among the headlines: Obamacare will push 2 million workers out of labor market: CBO; The CBO Just Nuked Obamacare; CBO says Obamacare will add to deficit, create reluctant work force; CBO: Obamacare to cost 2.3 million jobs over 10 years.

The CBO report, Kessler said, looks at whether the health care reform act increases or decreases laborers' incentives to work. It's not a drop in demand by employers but rather a reflection of choices that workers might make to reduce hours.

ACA provides a subsidy to help with insurance costs up to certain income levels. The CBO report said some people may reduce hours to maintain subsidies. On the other hand, workers who were putting off retirement to get health insurance may find they can retire.

Summarized Kessler: "Thus, some people might decide to work part-time, not full-time, in order to keep getting health-care subsidies. Thus, they are reducing their supply of labor to the market. Other people near retirement age might decide they no longer need to hold onto their job just because it provides health insurance, and they also leave the work force.

"Look at it this way: If someone says they decided to leave their job for personal reasons, most people would not say they 'lost' their jobs. They simply decided not to work," he said.

"The jobs impact of Obamacare will come alongside a slowly healing labor market. The unemployment rate will average 6.8 percent in 2014, up slightly from its current level of 6.7 percent, before continuing its slow march downward to 6.5 percent in 2014, 6.1 percent in 2016 and 5.9 percent in 2017," wrote U.S. News and World Report's Danielle Kurtzleben.

According to the CBO and Congress’ Joint Committee on Taxation, technical glitches on the health exchanges early in the rollout mean 2014 enrollment will be down 1 million from earlier projections, to 6 million people. "However, the CBO also notes that enrollment could pick up considerably as March 31 — the end of the enrollment period — approaches," said Kurtzleben. "Ultimately, the CBO and JCT predict enrollment of 22 million by 2016."

Noted Los Angeles Times' David Lauter, "In a briefing for reporters, CBO Director Douglas W. Elmendorf said he wanted 'to emphasize that that reduction doesn't mean that that many people will choose to leave the labor force.’ ”

Elmendorf told the reporters that what would actually happen is hard to predict, but the number of jobs would probably increase in the short term. "Both the positive and negative effects on employment 'mostly fade after a few years,’ ” Elmendorf told the reporters, including Lauter.

Republican leaders are not so sure. John A. Boehner, House speaker, said the CBO projections bolster belief in the "devastating impact of Obamacare on jobs."

"The middle class is getting squeezed in this economy, and this CBO report confirms that Obamacare is making it worse," he said in a widely quoted statement.

EMAIL: lois@deseretnews.com, Twitter: Loisco