The Affordable Care Act will improve the nations health by reducing the number of uninsured people, but its having a deleterious health effect on one group. It keeps spiking congressional Republicans blood pressure.
These poor folks seesaw between throbbing neck veins and swooning sorrow when it comes to what they call Obamacare. The episodes started with their unanimous but fruitless opposition to the law and continued through a series of frustrated repeals, a government shutdown and new alarms about what the ACA will do to the nation.
On Tuesday, Republicans again went apoplectic over a new report from the nonpartisan Congressional Budget Office on the ACAs projected effect on the supply of labor. The report said the ACA will cause some Americans to work less and could take the equivalent of 2.5 million jobs out of the labor supply by 2024.
House Majority Leader Eric Cantor took to Twitter to declare: The CBOs 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 Whip Kevin McCarthy of California said the CBOs estimate undercuts any claim by the president that his policies are helping to expand middle class opportunity and growth its doing the exact opposite.
Sen. Orrin Hatch, a ranking member of the Senate Finance Committee, called the report devastating.
The National Review summarized the GOPs reading of the report with the headline: The CBO Just Nuked Obamacare.
It sounds scary, but theres no need to head for a metaphoric fallout shelter. What the CBO actually said was that many Americans who work in order to qualify for health insurance through their employers will no longer be chained to their jobs for insurance purposes.
Now that they can get insurance regardless of pre-existing medical conditions, they can work the hours they want, not the hours they have to work to qualify for employer benefits. Others may choose to work less to keep their income at a level that qualifies for an insurance subsidy.
That means workers will supply less labor in an amount equivalent to 2.5 million jobs over the next 10 years. But it doesnt mean jobs will be lost.
The CBO report said its estimated reduction in the labor supply related to the ACA will appear almost entirely as a reduction in labor force participation and in hours worked relative to what would have occurred otherwise rather than as an increase in unemployment (that is, more workers seeking but not finding jobs) or underemployment (such as part-time workers who would prefer to work more hours per week).
Indeed, the report suggests the demand for labor could increase because of the ACA. As Medicaid expansion and subsidies give low-income people more financial resources , theyll spend more elsewhere, boosting consumer demand.
The report also refutes another Republican complaint that the laws risk corridors constitute a bailout of insurance companies. Theyre so concerned that they may demand elimination of the corridors as a condition for raising the federal debt limit.
The provision compensates insurance companies whose coverage costs exceed their projections in the early years of the ACA. But it also collects from companies that pay out less than they expected. The CBO estimates that between 2015 and 2024, the government will pay $8 billion to insurance companies, but collect $16 billion an $8 billion gain for the U.S. Treasury.
None of this fine print will forestall midterm election ads calling the ACA a jobs killer and a bailout. But the CBO report was actually good news for the ACA. Beyond the rants, the CBO sees no cause for alarm or even a rise in blood pressure.