Commentary Magazine


Topic: employment

New ObamaCare Losers: Public Employees

Earlier this week, Health and Human Services Secretary Kathleen Sebelius mocked the idea that ObamaCare is costing people their jobs. Sebelius even went so far as to say that “every economist will you tell you” that there is no evidence of job loss. According to her, the whole idea of economic suffering related to the misnamed Affordable Care Act is a “myth.” While that kind of hyperbole is easily exposed (Every economist? Really?), ObamaCare critics don’t need to beat the bushes to find conservative economists to counter that assertion. All they need to do is to read today’s New York Times.

The number of those who have already been hurt by ObamaCare are legion, including millions of individual purchasers of insurance who have lost their coverage or been denied the ability to keep their doctors in spite of President Obama’s promise to the contrary. But it’s long been accepted that the employer mandate will eventually reduce the number of full-time workers because of new rules about coverage requirements. Yet it turns out that those affected are not just employees at small or mid-sized companies. The impact on one of President Obama’s key support group turns out to be just as bad. As the New York Times reports:

Cities, counties, public schools and community colleges around the country have limited or reduced the work hours of part-time employees to avoid having to provide them with health insurance under the Affordable Care Act, state and local officials say.

The cuts to public sector employment, which has failed to rebound since the recession, could serve as a powerful political weapon for Republican critics of the health care law, who claim that it is creating a drain on the economy.

President Obama has twice delayed enforcement of the health care law’s employer mandate, which would subject larger employers to tax penalties if they do not offer insurance coverage to employees who work at least 30 hours a week, on average. But many public employers have already adopted policies, laws or regulations to make sure workers stay under that threshold.

Sebelius was as wrong about the question of ObamaCare’s impact on employment as she was about the rollout of the law’s website. But the problem for the administration isn’t just a credibility gap that was already as big as the Grand Canyon. It’s that the ranks of ObamaCare losers are now growing and being filled by people that are the backbone of the Democratic Party. That means the real myth about ObamaCare is the assumption that once it goes into effect it will be transformed from an unpopular law to a beloved national institution like Social Security.

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Earlier this week, Health and Human Services Secretary Kathleen Sebelius mocked the idea that ObamaCare is costing people their jobs. Sebelius even went so far as to say that “every economist will you tell you” that there is no evidence of job loss. According to her, the whole idea of economic suffering related to the misnamed Affordable Care Act is a “myth.” While that kind of hyperbole is easily exposed (Every economist? Really?), ObamaCare critics don’t need to beat the bushes to find conservative economists to counter that assertion. All they need to do is to read today’s New York Times.

The number of those who have already been hurt by ObamaCare are legion, including millions of individual purchasers of insurance who have lost their coverage or been denied the ability to keep their doctors in spite of President Obama’s promise to the contrary. But it’s long been accepted that the employer mandate will eventually reduce the number of full-time workers because of new rules about coverage requirements. Yet it turns out that those affected are not just employees at small or mid-sized companies. The impact on one of President Obama’s key support group turns out to be just as bad. As the New York Times reports:

Cities, counties, public schools and community colleges around the country have limited or reduced the work hours of part-time employees to avoid having to provide them with health insurance under the Affordable Care Act, state and local officials say.

The cuts to public sector employment, which has failed to rebound since the recession, could serve as a powerful political weapon for Republican critics of the health care law, who claim that it is creating a drain on the economy.

President Obama has twice delayed enforcement of the health care law’s employer mandate, which would subject larger employers to tax penalties if they do not offer insurance coverage to employees who work at least 30 hours a week, on average. But many public employers have already adopted policies, laws or regulations to make sure workers stay under that threshold.

Sebelius was as wrong about the question of ObamaCare’s impact on employment as she was about the rollout of the law’s website. But the problem for the administration isn’t just a credibility gap that was already as big as the Grand Canyon. It’s that the ranks of ObamaCare losers are now growing and being filled by people that are the backbone of the Democratic Party. That means the real myth about ObamaCare is the assumption that once it goes into effect it will be transformed from an unpopular law to a beloved national institution like Social Security.

The findings of the Times report validate the conclusions of the Congressional Budget Office study released earlier this month on the impact of ObamaCare on employment. Though administration figures like Sebelius have been orchestrating a campaign seeking to deny these facts, the Times story illustrates the futility of this effort. Municipalities and public institutions around the country have been cutting the hours of their workers in order to avoid paying for their health care. Thus even though the point of the Affordable Care Act was to get more people covered, the unintended consequence of its passage was to cut the pay as well as deprive a significant population of public-sector workers of their chance to get insurance from their employer.

As the article notes, public workers are being especially hard hit because municipal employers can’t pass along the increased costs of the insurance mandates to consumers the way private companies can try to do. Instead, they must cut down on the number of those they employ. But rather than reduce the ranks of those public employees getting expensive benefits and pensions that often are far more generous than those received by the taxpayers who pay their salaries, the people losing out in the ObamaCare squeeze are those at the bottom end of the wage scale.

These findings once again point out the problem with the administration’s belief that their ObamaCare troubles are merely the result of a rough rollout and will soon disappear. It is true that millions of Americans who are either poor or have pre-existing medical conditions will be net winners as a result of ObamaCare. But unlike government entitlements like Social Security and Medicare, ObamaCare has also created a vast number of net losers who are losing coverage, losing jobs, or getting their hours and possible benefits cut.

The fact that a large number of those losers are members of a demographic that is a key element of the Democratic base is a potential political disaster for the president’s party. Rather than going away as the midterms approach, if the Times is to be believed, it is getting worse. In this case, the Democratic focus on income inequality appears to be pertinent. But rather than being able to blame the plight of low-income workers on the wealthy or the Republicans, it is President Obama’s signature accomplishment that is to blame.

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CBO Political Dynamite: OCare Job Losses

Judging by his State of the Union address and the confidence with which Democrats have tried to focus the national political conversation on income inequality, it was obvious that the administration had concluded that ObamaCare was no longer a political problem. But today’s report from the Congressional Budget Office predicting that the health-care law would result in the loss of more than two million full-time jobs shows just how unfounded that conclusion has turned out to be. The report, which provides the most detailed analysis of the impact of ObamaCare on the economy, said the law would reduce hours worked by Americans across the board.

As the New York Times reports:

The budget office analysis found that much of the law’s effect comes from reducing the need for people to take a full-time job just to get insurance coverage, and from the premium subsidies effectively bolstering household income.

But it will also have an effect on businesses, the report said, including by encouraging them to reduce employee hours to avoid the so-called “employer mandate.”

The report also chipped away at the administration’s main argument for retaining the controversial law: the vast expansion of benefits for the poor and those unable to obtain insurance because of pre-existing conditions:

The budget office also estimated that about a million fewer Americans than expected will receive health insurance coverage in 2014 through the marketplaces established by the Affordable Care Act, primarily because of the troubled rollout of the exchanges. It also revised its estimates of the number of people receiving coverage through Medicaid and Children’s Health Insurance Plan coverage, lowering it by about 1 million.

While the White House is attempting to spin the numbers to prove that the job losses are meaningless, the political impact of this report is clear: ObamaCare will remain a major, if not the single most important, political issue in the 2014 midterm elections. Moreover, since the CBO says most of the damage won’t be fully felt until after 2016, the idea that the health-care law will be widely accepted once implemented is also a pipe dream of the Democrats who passed it without a single Republican vote. That means Democrats, including Hillary Clinton, dreaming of the White House must understand that they will also be faced with the absolute necessity of defending the law in the next presidential election cycle.

Read More

Judging by his State of the Union address and the confidence with which Democrats have tried to focus the national political conversation on income inequality, it was obvious that the administration had concluded that ObamaCare was no longer a political problem. But today’s report from the Congressional Budget Office predicting that the health-care law would result in the loss of more than two million full-time jobs shows just how unfounded that conclusion has turned out to be. The report, which provides the most detailed analysis of the impact of ObamaCare on the economy, said the law would reduce hours worked by Americans across the board.

As the New York Times reports:

The budget office analysis found that much of the law’s effect comes from reducing the need for people to take a full-time job just to get insurance coverage, and from the premium subsidies effectively bolstering household income.

But it will also have an effect on businesses, the report said, including by encouraging them to reduce employee hours to avoid the so-called “employer mandate.”

The report also chipped away at the administration’s main argument for retaining the controversial law: the vast expansion of benefits for the poor and those unable to obtain insurance because of pre-existing conditions:

The budget office also estimated that about a million fewer Americans than expected will receive health insurance coverage in 2014 through the marketplaces established by the Affordable Care Act, primarily because of the troubled rollout of the exchanges. It also revised its estimates of the number of people receiving coverage through Medicaid and Children’s Health Insurance Plan coverage, lowering it by about 1 million.

While the White House is attempting to spin the numbers to prove that the job losses are meaningless, the political impact of this report is clear: ObamaCare will remain a major, if not the single most important, political issue in the 2014 midterm elections. Moreover, since the CBO says most of the damage won’t be fully felt until after 2016, the idea that the health-care law will be widely accepted once implemented is also a pipe dream of the Democrats who passed it without a single Republican vote. That means Democrats, including Hillary Clinton, dreaming of the White House must understand that they will also be faced with the absolute necessity of defending the law in the next presidential election cycle.

The CBO report isn’t all bad news for Democrats as it predicts lowered deficits in the years to come. But try as they might, the job loss numbers are a body blow to the president’s party heading into a midterm election cycle in which the odds were already stacked against them. With ObamaCare enrollment numbers significantly below where they must be for the system to pay for itself and state exchanges burdened by “glitches” that also imperil the law’s success, the outlook for the misnamed Affordable Care Act is grim.

Since the law’s passage in 2010 critics feared the employer mandate would result in massive cuts in full-time employees as small companies reduced workers to part-time status in order to avoid the costs and the regulatory headaches of complying with the statute. It has also led to the decisions of major companies such as Target, Trader Joe’s, and Home Depot to reduce insurance coverage for part-time employees pushing them into the exchanges to purchase ObamaCare.

All this adds up to a situation in which the number of ObamaCare losers is starting to outnumber the total number of Americans who benefit from the law. The assumption all along by both hopeful Democrats and worried Republicans was that once it was in place the law’s distribution of benefits would make it impossible to significantly amend or repeal it. But with each passing month as the disastrous rollout of the law continues, and more details of its catastrophic effects on the economy become apparent, it becomes clearer by the day that the problems it is creating for millions of Americans who have seen their existing plans canceled and replaced with more expensive coverage or are faced with the loss of full-time employment cannot be ignored.

Democrats who plan to face the voters in November by trying to change the subject to discussions of the minimum wage or vague talk about inequality must think again. Ignoring the devastating impact of ObamaCare on an economy that is still not fully recovered from 2008 is not a winning strategy. Faced with voters who know from their own experience they are paying a heavy price in jobs, increased health-care costs, and poorer coverage, Democrats are going to have to do better than to tell the people that ObamaCare is off-limits for discussion or debate.

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