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Job losses caused by Obamacare estimated to reach 2.3M

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By The Associated Press
Tuesday, Feb. 4, 2014, 9:15 p.m.
 

WASHINGTON — Several million American workers will cut back their hours on the job or leave the nation's workforce entirely because of President Obama's health insurance overhaul, congressional analysts said on Tuesday, adding fresh fuel to the political fight over Obamacare.

The workforce changes would mean nationwide losses equal to 2.3 million full-time jobs by 2021, in large part because people would opt to keep their income low to stay eligible for federal health insurance subsidies or Medicaid, the Congressional Budget Office said. It had estimated that the law would lead to 800,000 fewer jobs by that year.

Republican lawmakers seized on the report as major evidence of what they consider the failures of Obama's overhaul, the huge change in health coverage that they're trying to overturn and planning to use as a main argument against Democrats in the November midterm elections.

“Like many Pennsylvanians, I believe that creating more jobs and growing the economy should be one of our top priorities in Washington,” said Sen. Pat Toomey, R-Lehigh County. “Unfortunately, many of the policies that have been enacted by this administration — especially Obamacare — are taking us in the opposite direction.”

The White House said the possible reduction would be because of voluntary steps by workers rather than businesses cutting jobs — people having the freedom to retire early or spend more time as stay-at-home parents because they no longer would have to depend only on their employers for health insurance.

The law means people “will be empowered to make choices about their own lives and livelihoods,” said White House Press Secretary Jay Carney.

CBO Director Douglas Elmendorf said the top reasons people would reduce work would be to qualify for subsidized coverage and an expanded Medicaid program but that lower wages — because of penalties on employers who don't provide coverage and looming taxes on generous health insurance plans — would also be a factor.

The agency also reduced its estimate of the number of uninsured people who will get coverage through the law. The budget experts now say 1 million more people will be uninsured this year than had been expected, partly because of the website problems that prevented people from signing up last fall.

However, it wasn't all bad news for the Obama administration. The CBO's wide-ranging report predicted that the federal budget deficit will fall to $514 billion this year, down from last year's $680 billion and the lowest since Obama took office five years ago.

The new estimates also say that the health care law will, in the short run, benefit the economy by boosting demand for goods and services because the lower-income people it helps will have more purchasing power.

However, the budget experts view the long-term federal deficit picture worsening by about $100 billion a year through the end of the decade because of slower growth in the economy than they had predicted.

As for health care signups, the nonpartisan congressional analysts estimated that about 1 million fewer people will enroll through the new insurance exchanges than had been expected this year, for a total of 6 million.

Enrollment is predicted to pick up, topping 20 million in 2016. The exchanges, or online marketplaces, offer subsidized private coverage and cater mainly to middle-class people who don't have health insurance on the job.

The Congressional Budget Office also revised its Medicaid enrollment projection downward by about 1 million, for a new total of 8 million signups in 2014. About half the states have accepted the health law's Medicaid expansion.

What about those whose decisions about work might be affected by the new law?

Lower-wage workers are more likely to reduce their hours or quit their jobs because of Obamacare incentives, the report said.

Although some employers will choose not to hire additional workers, or will reduce hours, the budget office said that does not appear to be the main factor.

 

 
 


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