Health Care Law Will Mean 2 Million Fewer Workers

February 5, 2014

The Affordable Care Act will reduce the number of full-time workers by more than 2 million in coming years, says the Washington Post.

  • After obtaining coverage through the health law, some workers may forgo employment, while others may reduce hours, according to a report by the Congressional Budget Office (CBO).
  • Low-wage workers are the most likely to drop out of the workforce as a result of the law.
  • The CBO said the law's impact on jobs mostly would be felt after 2016.

The agency previously estimated that the economy would have 800,000 fewer jobs in 2021 as a result of the law. In that analysis, the CBO looked primarily at how employers would respond to a new penalty for failing to offer insurance to employees who work more than 30 hours a week. That response would include cutting people's hours, hiring fewer workers and lowering wages for new jobs.

On Tuesday, the agency released a more detailed estimate that includes how ordinary Americans would react to those changes by employers.

  • Some would choose to keep Medicaid rather than take a job at reduced wages.
  • Others, who typically do not work full-time, would delay returning to work in order to keep subsidies for private insurance that are provided under the law.
  • As a result, by 2021, the number of full-time positions would be reduced by 2.3 million.

The reduction in employment from the health care law "includes some people choosing not to work at all and other people choosing to work fewer hours than they would have in the absence of the law," the CBO said.

Source: Zachary A. Goldfarb and Sarah Kliff, "CBO: Health Care Law Will Mean 2 Million Fewer Workers," Washington Post, February 4, 2014. "The Budget and Economic Outlook: 2014 to 2024," Congressional Budget Office, February 4, 2014.

 

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