Filed Under:Health Insurance, Individual Health

CBO claims PPACA will slash work hours

(AP photo/Carolyn Kaster)
(AP photo/Carolyn Kaster)

(Bloomberg) – The Patient Protection and Affordable Care Act will reduce the total number of hours Americans work by the equivalent of 2 million full-time jobs in 2017, mostly among low-wage earners, the Congressional Budget Office said.

The total number of hours worked will fall about 1.5 percent to 2 percent from 2017 to 2024 as a result of the health-care overhaul, the CBO said today in a report. The reduction is due “almost entirely” to low-wage employees who may choose to give up extra hours of work to avoid losing subsidies or tax advantages under the law, the report said.

Republicans said their warnings that the health law would discourage employment are proving correct. The report “is further evidence the president’s health-care law is destroying full-time jobs,” U.S. Representative John Kline, a Minnesota Republican who is chairman of the House Education and the Workforce Committee, said in a statement.

The Patient Protection and Affordable Care Act, known as Obamacare, is expected to cover 6 million people through its insurance exchanges this year, according to the report. About 8 million people will enroll in an expansion of Medicaid, the state-run health plan for the poor, under the law. Both figures represent reductions of 1 million from the agency’s estimates before the Obama administration’s faltering rollout of the insurance expansion began in October.

Increasing enrollment

“Over time, more people are expected to respond to the new coverage options, so enrollment is projected to increase sharply in 2015 and 2016,” the CBO said in its report.

The Affordable Care Act marks the largest U.S. expansion of health insurance in more than 40 years. The law was passed by a Democratically controlled Congress in 2010 and many of its major provisions took full effect Jan. 1. The ACA set up government- run insurance exchanges where Americans can buy private health plans with the help of federal tax credits and expanded eligibility in Medicaid.

About 3 million people signed up for private plans through Obamacare from Oct. 1 to Jan. 24, the Department of Health and Human Services said last month. The law’s first enrollment period ends March 31.

By 2017, from 24 million to 25 million are expected to obtain coverage each year, the CBO said.

Subsidy costs

The subsidies given to low-wage earners to help them afford insurance under the law will total $20 billion in 2014, along with related spending, the report said. People earning as much as 400 percent of the federal poverty level, or about $94,200, are eligible for tax credits that discount premiums they pay in the exchanges.

The subsidies disappear at higher incomes, which may encourage people at the threshold of eligibility to cut back on work so they don’t lose the tax credits.

“My Republican colleagues and I have been warning for years of the devastating effects Obamacare would wreak on our health-care system and our economy,” U.S. Representative Diane Black, a Tennessee Republican, said in a statement. “This report from CBO further underscores the need to repeal Obamacare and replace it with a system that expands access to health care and doesn’t put Americans out of work.”

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