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Obamacare and jobs

Will the health reform bill kill jobs? Devastate small businesses? Push us back into recession?
According to several organizations and and anti=reform politicians, it’s the worst thing to hit the economy since the Depression.
But it turns out those doomsayers are mostly wrong.
Here’s what says about these claims:
“this is health-care hooey, aimed at exploiting public concern over continuing high unemployment, with little basis in fact.
As we’ve said before (a few times), experts project that the law will cause a small loss of low-wage jobs — and also some gains in better-paid jobs in the health care and insurance industries. [emphasis added]
It’s also expected that more workers will decide to retire earlier, or work fewer hours, when they no longer need employer-sponsored insurance and can obtain it on their own with help from federal subsidies. But that just means fewer people willing to work — and it will free up jobs for those who want them. If anything, that could reduce the jobless rate.” [emphasis added]
Here are a few factoids about the PPACA (aka Accountable Care Act) that seem to have escaped the attention of those concerned about health reform and jobs.
– some employers with fewer than 25 FTEs are already receiving government aid to help defray the cost of insurance
– employers with fewer than 50 FTEs are exempt from the requirement to provide coverage
– the original CBO analysis of reform’s impact on employment [opens pdf] indicated job losses from the employer mandate “would probably be small.”
In fact, the jobs picture, according to the CBO, is mixed.
“According to CBO’s August 2010 analysis, the legislation, on net, will reduce the amount of labor used in the economy by a small amount–roughly half a percent–primarily by reducing the amount of labor that workers choose to supply.30 That net effect reflects changes in incentives in the labor market that operate in both directions: Some provisions of the legislation will discourage people from working more hours or entering the workforce, and other provisions will encourage them to work more.”
The well-regarded Lewin Group concurs:
“Lewin’s analysis showed 150,000 to 300,000 jobs lost, all minimum wage or near minimum wage positions that would be lost permanently. That doesn’t account for increases in jobs in other sectors, mainly health care, that Sheils also expects but hasn’t quantified.”
There are entities with different opinions, but they are not neutral parties. Again, here’s FactCheck:
“a study by the National Federation of Independent Business…projecting a 1.6 million job loss…was issued Jan. 26, 2009 — well over a year before the new law was actually enacted. NFIB has not issued any study of what actually became law, and one of this study’s authors, Michael Chow, told us by e-mail that it has no present plans to do so…
NFIB did not study the new law. Its report was based on a hypothetical employer mandate that bears little resemblance to what was actually passed — and it also projects a gain of hundreds of thousands of health care and insurance industry jobs.”
I’d note that this hasn’t stopped the GOP from using the 1.6 million lost job figure when referring to jobs lost due to PPACA…
(note – an earlier version credited the NFIB with continued usage of the 1.6 million statistic; I should have said the GOP. I regret the error)
What does this mean for you?
While there are problems with PPACA, while it is far from perfect, and while it could stand improvement in many areas, no matter what NFIB et al claim, it is not a “job-killer.”

One thought on “Obamacare and jobs”

  1. Joe … You are misguided in claiming that NFIB has used the 1.6 million figure to criticize PPACA. That figure was a legitimate estimate for a very early version of the healthcare bill, not what was passed into law; that early version included an employer mandate for even the tiniest firms. When Congress exempted businesses with fewer than 50 employees from the mandate, we immediately ceased using the 1.6 million figure and stressed to Capitol Hill that this figure was no longer valid and should no longer be cited. Since then, NFIB has conducted studies on the law that was actually enacted. In fact, the piece you cited linked to a November 2011 study by Michael Chow on the impact the Health Insurance Tax will have on private sector jobs. His study estimates that the Health Insurance Tax will cause a loss of between 125,000 and 249,000 private sector jobs by 2021. Very simply put, this tax will be a job-killer for the private sector.
    — Bob Graboyes, Senior Fellow, NFIB Research Foundation

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Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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