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Affordable Care and jobs: the data shows…

that the predictions of employment declines due to ACA have turned out to be wrong.

Right up front, let’s agree that it is pretty much impossible to completely separate the impact of one factor from all the others.  Employment is affected by interest rates (still historically low), international trade, consumer demand, construction, and consumer confidence among other things.

That said, the latest research shows no negative impact on:

  • hours worked;
  • labor force participation;
  • employment; and/or
  • the probability of part-time work.

One of the demographic groups of most concern was non-elderly adults with a high school or less education; the fear was employers would slash jobs and hours worked as employment costs would increase under ACA. Yet the data indicates there have been “very small shifts in part-time hiring”; employers have not shifted full-time workers to part time to avoid paying insurance premiums.

Claims that 2.5 million jobs, mostly low-wage, would be lost have been shown to be hyperbole at best; flat-out-wrong would be kind.

What’s pretty entertaining is several of the current crop of GOP Presidential candidates have been touting their states’ employment growth – and in the next breath claiming ACA was a job killer.

IF that was the case, job openings wouldn’t be at their highest level in 15 years…

So, while there’s no evidence ACA is hurting employment, there is lots of evidence that employers cannot find qualified workers.

What does this mean for you?

The reality is this – the claims that “Obamacare” would be a job-killer have been shown to be wrong.

4 thoughts on “Affordable Care and jobs: the data shows…”

  1. The data does support what you are saying and employers of low skilled low pay workers are learning that they can discontinue their Health Insurance programs thus forcing them on the Obamacare roles. While this has been an effective business owner strategy since the ACA went effective what is going to happen when the “claims lag” of these new individual policies catches up and the rate increases start compounding on these individuals. They will no longer have the employer subsidy to swallow those increases for them. Do the feds raise taxes to subsidize, maybe? The employer certainly does not have any motivation to increase wages. If they do federal subsidies go down. Statistics certainly show wages are not rising on low skilled workers who are the lions share benefactor of the ACA. I never thought the employers would be hurt by the ACA near as much as the individuals down the road. But I guess this may have been the intent to eventually make the argument for single payor.

    1. Jeffrey – thanks for the comment. You state: “The data does support what you are saying”.

      I provided numerous citations from several sources to support my statements. Please tell us where these sources do not support my statements.

      Also, please provide support for your statement to wit: “employers of low skilled low pay workers are learning that they can discontinue their Health Insurance programs thus forcing them on the Obamacare roles.”

      Where is the evidence these employers are discontinuing their health insurance programs?

      Thanks for the interaction. Look forward to your response.

  2. Joe, let me say I enjoy your blog and have for quite some time. Let me clarify a bit. Data DOES show your point that the part-time shift trend has not necessarily happened. My point really was pertaining to the small group 2,3 – 49 life groups. UHC, Aetna and others Leadership have definitely seen the trend of the small group insurance model shrinking. Forbes, WSJ, MONEY, USA TODAY, have stated this alarming trend and its not just from the minimum benefit requirement. It only make logical business sense. Suppose for example you are an employer with 10 employees. You pay them on avg $10 hr but also pay their health insurance (75%) of employee only cost. Disclaimer, I put 75% EE contribution only because a $10 hr employee will not be able to afford the 50% EE only federal mandate on contributrion by the employer. Lets be generous and say the employee only premium is $350 month total. $350 x 75% = $262.50 x 10 x 12 = $31,500 annually in premium. This employer is dealing with compounding increases from 10%-40% yearly. This employer could give all his employees raises at $300 monthly and “freeze” his healthcare costs by canceling the group policy. Now these employees are now free to go to on ACA and start their individual journey as an individual policy holder. Their premiums will certainly rise every year and they will choose to fulfill the govt mandate by choosing the highest deductible they can to stay within the IRS guidelines, which by the way prescription benefits are essentially gone at this point into the self insured abyss of the deductibles and Out of pockets. Silver lining – a win for the small employers in that they will not have the cash flow outlay of employee premiums any longer but a whole new society of people just needing to satisfy the federal mandate and self insuring themselves and rationing their own care so they don’t incur high out of pocket expenses and ultimately a credit agency wreaking havoc on their finances when an emergency happens. This gets back to if you like your doctor, you can keep your doctor and improving the healthcare system façade.

  3. The ACA does have a program called SHOP that was supposed to encourage small businesses to offer health insurance. But the rules are complex and the benefits to the employer are skimpy, so the program has had few takers.

    The health insurance market has been a harsh place for decades for workers with average incomes and a non-generous employers. The ACA could have improved this by offering more generous subsidies to persons with incomes from 200% to 400% of poverty. However this group lost out when the ACA was forced to keep projected expenses below $100 billion a year.

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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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