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Health care law will mean fewer people on the job, CBO report says



By ANDREW TAYLOR and RICARDO ALONSO-ZALDIVAR

WASHINGTON (AP) - Several million American workers will reduce their hours on the job or leave the workforce entirely because of incentives built into President Barack Obama's health care overhaul, the Congressional Budget Office said Tuesday.

That would mean 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 care subsidies or Medicaid, the agency said. It had estimated previously that the law would lead to 800,000 fewer jobs by that year.

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

It's the latest indication that "the president's health care law is destroying full-time jobs," said Republican Rep. John Kline of Minnesota, chairman of the House Education and the Workforce Committee. "This fatally flawed health care scheme is wreaking havoc on working families nationwide," he said.

But the White House said the possible reduction would be due to 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 had to depend only on their employers for health insurance.

"CBO's findings are not driven by an assumption that (the health care law) will lead employers to eliminate jobs or reduce hours," said White House Press Secretary Jay Carney.

The agency also reduced its estimate of the number of uninsured people who will get coverage through the health care law. The budget experts now say more than 1 million fewer people than had been expected will gain coverage this year, 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 by far 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. The report noted that the 2014 premiums that people pay for exchange coverage are coming in about 15 percent lower than projected, and the health care law, on balance, still is expected to reduce the federal deficit.

However, the budget experts see 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 previously predicted.

As for health care signups, the website woes have largely been cleared up, but 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 care 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 people 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.

"The estimated reduction stems almost entirely from a net decline in the amount of labor that workers choose to supply, rather than from a net drop in businesses' demand for labor," the report said.

The health care analysis is layered with complexity. The job losses are measured in "full-time-equivalent workers," which means more people are actually affected than, say, the 2 million full-time-equivalent jobs lost in 2017. It could take several part-time workers or people deciding to reduce their hours to produce the wage loss of one full-time equivalent.

The report also contains an important caveat, that the estimate of job losses is "subject to substantial uncertainty" and could be larger or smaller than predicted. There now are more than 130 million jobs in the economy.

Meanwhile, the broad federal deficit projection shows another yearly improvement. Obama inherited an economy in crisis and the first deficits ever to exceed $1 trillion. The 2009 total, swelled by the costs of the Wall Street bailout, hit a record $1.4 trillion, while the deficits of 2010 and 2011 each registered $1.3 trillion.

The agency sees the deficit sliding to $478 billion next year before beginning a steady rise years through 2024 that would bring the annual imbalance back above $1 trillion. Overall, it forecasts deficits totaling $7.3 trillion over the coming decade, about $1 trillion more than previously estimated.

"CBO expects that economic growth will diminish to a pace that is well below the average seen over the past several decades," the report said, citing an aging population and a decrease in the rate of growth in the labor force.

Tuesday's report comes as Obama and Republicans in Congress are taking a respite in the budget wars that have periodically consumed Washington since Republicans took control of the House in 2011. The declining deficit numbers mean they could feel even less urgency to act now.

A December budget agreement and last month's follow-up spending bill could buy peace through November's midterm elections. Republicans also appear to be taking a less confrontational approach to legislation needed this month to increase the government's borrowing limit to avoid defaulting on its obligations.


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plcsassafrass66 February 06 2014 at 10:33 PM

do you really think i'm gonna wait for them to call me???? haa haaa....no way.
I can't wait to call them....just to see what they say.

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billes8412 February 06 2014 at 3:57 PM

The headline on the AOL front page is incorrect. The CBO said there would be fewer workers not jobs. The real question is why AOL would continue to use this debunked and bogus Republican talking point? This is one of the reasons people are so misinformed and vote against their own best interest.
For those workers who have wanted to retire before their eligibility for Medicare, worked more hours in order to qualify for employee healthcare or wanted to start a small business but couldn't because of employer based health care, this is perfect. There are well over 350 million people in the US. Excluding minors not everyone has to work. The doubly good news is it frees up jobs for those who are looking for work. This is a bad thing?

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wht4u2 February 05 2014 at 2:55 PM

I know one thing, I am paying 27% more this year for health insurance, but for less coverage. Who does that benefit? Not me and my family. By the way 49% of my total income last year(2013) was tax and fees that i am required to pay by law. I tracked it for the entire year. How much more should the middle class pay??

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teamhillaryc February 06 2014 at 12:23 PM

There is a 700 club advocate on Obama care that has good insite. I ref this person bcuz I saw it on t.v. the lady . But like there are other resources that may help u opt to a lower pay out for insurance for basic coverage. Remember to eat healthy:)

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Mary February 05 2014 at 12:21 PM

Earners becoming voluntarily unemployed? More liberal lipstick on a pig. The fact is that a little publicized provision of Obamacare requires healthcare providers to trim their overhead to 15% of revenues. Bottom line-- insurers, hospitals, doctors and other service providers will all be cutting staff or staff hours to accommodate this provision. End result-- longer waits for everyone, both to get services and in waiting rooms, not to mention longer processing times by insurers for claims. Welcome to better healthcare for everyone!

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teamhillaryc February 06 2014 at 12:33 PM

No NO NO this will be where all the jobs go... They did a story on the news about doctor offices being overcrowed...There is going to be a demand for more doctors only where will those doctors come from INDIA ? or America... And not being biased but how can we afford to hire foreign doctors who send all of their money home ? It is part of the problem now . Bills take a certain amount of signatures : You can drumb up bills in your town , get signatures and send them to congress / Obama ... These people work for the people . A lot of complaints with no action (peaceful action) renders no resolve. You just continue to gripe and waste life, energy. I have learned u do have the power to be a part of society when u CONTRIBUTE. You see where corruption is going on in your local area complain together with a remedy to the problem at hand . Work together w/out ego and hangups. Have a picnic in the community embrace one another for just being a person.

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cpenrod February 05 2014 at 11:47 AM

Why is Commie Obama still in the White House??? Because the cowards and traitors in Congress lack the guts and integrity to impeach him, try him for treason and hang him!

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teamhillaryc February 06 2014 at 12:25 PM

Wow... What is treason ???? Of course they will not becuz they lie together or one is not whistle blowing on the other becuz there is corruption going on.

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snovakpage February 05 2014 at 11:46 AM

"It will get worse before it gets better.” President Obama did the right thing, trying to fix the healthcare system in the USA. This should be the first step towards a system that is inclusive and not exclusive.
Hard working Americans are entitled to a descent life and a caring society just like Sweden, Denmark, Germany, France and other civilized countries of the world.
Our women deserve maternity leave just like women in Canada and other civilized countries of the world.
Let's put and end to this highway robbery, this systematic exploitation of human beings by the rich and powerful who run the system and try to keep people ignorant and in fear, by telling them that they would loose their jobs if they would get something back for their Tax Dollars in exchange. Don't worry, things will even out, the next thing that our President must do is to slap 100% import tax on business' who send work to China, India and other slave labor countries and bring the product back to the USA to sell it.

People aren't some kind of commodities that could be insured just like a lost suitcase..! Society should have rules, safeguards and measures that would protect and serve the participating members and do not turn the process into a money making racket.

Today’s Health Insurance Companies became too big for their own britches, together with the Healthcare Providers and Pharmaceutical Companies they became a powerful financial oligarchy of the 21 Century. They need no transparency, no government involvement, they wish to keep things as they are and protect their mega profits.

If we could manage the Healthcare ourselves why would we need Mega Insurance Companies to send us these outrages hospital bills and dictate to qualified Medical Doctors the extent of their help? Insurance companies got so greedy that the average American can no longer afford medical insurance or care. We don't need a of money making machine between ourselves and the doctor who will tell us what the doctor can do for us or cannot! Wake up and see through this haze that the Banksters and the 1% of America are constantly throwing at you to keep you down, ignorant and exploited. Look at the travel industry and the ex- Travel Agents; today the internet makes it possible for you to book your ticket online and save the money that the Travel Agent would've pocketed from you. Also, let’s do not forget that you have a choice.

My prediction: Within 3 years the program will have mega million participants, quietly people will join up and the sky won't fall on us as the Banksters predict it every time they need more money or want to instill fear in you to protect their money making game. Let's get on with it America, let's join the modern world, prosper and thrive :-}.

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2 replies to snovakpage's comment
Larry February 05 2014 at 11:51 AM

Remove the rose-colored glasses, they're distorting your vision.

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1 reply to Larry's comment
snovakpage February 05 2014 at 12:08 PM

Larry, I will keep those glasses on.
If other countries succeeded creating a fair and functioning healthcare system one day we'll do to...
By profession I'm a Design Engineer and here goes my motto:
If it works don't fix it.
If the design is bad to the bone, than scrap the whole thing and start from scratch. Create a new one and don't introduce modules from a bad design.

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cartier100 February 05 2014 at 12:12 PM

PS....my premiums doubled and offer LESS coverage....if you deem that helpful, you're crazy. These people who believe Socialism is so wonderful should move there and quit trying to convince the rest of us. I don't WANT Socialism!!

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snovakpage February 05 2014 at 3:59 PM

It sounds like you can afford to pay more... If this works for you than keep on paying more and expect less and less .
Myself I'm for the full and improved Obamacare package. We already pay enough in Taxes that I'd love to see put to good use.

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Ralph February 05 2014 at 11:18 AM

Most findings of the results of the Affordable Care Act, since it was rolled out on Oct 1, shows that it is doing more harm than good. More people have lost their health insurance due to the ACA than people who have enrolled into the ACA and are covered by the ACA.
This Affordable Health Act is not affordable, it was never designed to reduce the costs of health insurance premiums. It has successfully allowed the government to control 1/6 of the economy, giving the government its biggest power grab in US history. Every day it seems that new facts are emerging as a result of the ACA....like the CBO finding that because of the Affordable Care Act, fewer people will be seeking work, which would further increase the rate of unemployment.
There appears to be no end in sight to the misery index caused by Obama's Affordable Care Act.

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ljm691 February 05 2014 at 11:08 AM

Affordable care act now , Universal Care Next just what we all are looking forward too.

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anothergent007 February 05 2014 at 10:59 AM

so if i work full time i will have to pay for people who dont

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Ralph February 05 2014 at 11:23 AM

Not only that, you wouldn't have to pay for Obamacare because the government will subsidize the cost of your health plan.

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peteskswisdom February 05 2014 at 10:51 AM

Barry said the private sector was doing fine and that is what the liberal media is reporting. If those racist Tea party people and mean Republicans would just shut up, everything would be perfect.

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cartier100 February 05 2014 at 12:13 PM

OMG.....stupid!

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teresa198 February 05 2014 at 1:52 PM

take off your rose colored glasses an get the facts.

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