

Health Care Law Projected to Cut the Labor Force - wikiburner
http://www.nytimes.com/2014/02/05/us/politics/budget-office-revises-estimates-of-health-care-enrollment.html

======
brohoolio
This is expected. There is a whole class of people who are working just for
insurance because it was prohibitively expensive on the open market for
individuals. If you make it affordable for them to purchase healthcare as
individuals they'll retire.

Hopefully it means that people who want to work will be able to back fill
those jobs.

I think it's a good thing for the economy. It can't be a good thing to force
individuals to work when they'd have the means to retire if they were able to
purchase healthcare at the same rates as large companies.

~~~
Shivetya
It won't be a good thing for the economy, more people on the dole is never a
good solution. The ACA was only going to "work" if it had enough healthy
workers paying into it, having larger numbers of unsubsidized players.

With so many dropping into the clearly subsidized roles this will push the
costs of the program up. With the guarantees to the insurance companies built
into the law the public will end up footing an even larger bill which requires
increase taxes and health care costs for those working putting a bigger drag
on the economy.

Having more part time jobs which is what will happen when the employer side of
this kick is not better that keeping full timers.

~~~
scarecrowbob
Well, take my wife (please): she was working as an employee, taking a job that
could have been done by someone else (teaching orchestra at a school), and
then we moved and she started a business (private violin studio). While she
makes more as a private teacher, prior to the ACA she was previously unable to
purchase health insurance on the private market due to a food allergy (a
precondition).

We had to move for other reasons than her job, but consider that there are
many people doing work that other people do, who are motivated to do things
like start a business, but who are otherwise unable to do so because of the US
healthcare system.

Additionally, consider my parents, who are also working not because they need
the income per se-- they could retire and live well-- except for the costs and
difficulties of purchasing health insurance on a private market.

So it isn't the case that people are just universally "going on the dole"...
making private insurance closer to the same cost to purchase health insurance
regardless of your status as an employee shouldn't affect the overall bottom
line of the leeches who provide insurance.

~~~
CWuestefeld
_prior to the ACA she was previously unable to purchase health insurance on
the private market due to a food allergy (a precondition)._

This is a common misunderstanding. For most people in this situation, the laws
on the books already took care of the problem. If she already had healthcare
insurance at her previous employer, if she could show continuous coverage, she
would be able to continue to purchase healthcare insurance privately, despite
her preexisting condition.

Whether the private insurance would be affordable to you is a different
question, but it's not true that a preexisting condition was, before
Obamacare, a complete roadblock to acquiring coverage privately.

~~~
tptacek
I believe you may be oversimplifying the continuous coverage rules.

Under HIPAA, continuous coverage ensures acceptance into _group health care
plans_ (for instance, employer-provided coverage) regardless of preexisting
conditions.

Further, continuous coverage ensures acceptance into _some form of individual
coverage_ , of a kind determined by the specific state you're in.

I do not believe it is the case that continuous coverage guarantees acceptance
into individual health care plans.

In 19 years of working, and (more relevantly) 15 years of marriage, I have
never had a lapse of health care coverage for myself or my family. When we
started Matasano, I had just previously left a full-time, full-benefits job at
a larger company where I'd been working for 4 years. I elected COBRA when I
left, and started shopping for individual coverage.

We were unable to get family coverage at any price in Illinois because of
preexisting condition concerns for two members of my family. In both cases,
the rejection cause was a total surprise, because the "condition" wasn't an
ongoing health problem, but rather a piece of medical trivia that caused
underwriters concern that there might have been more significant issues down
the road.

I shopped for insurance myself, and then with a professional broker who I paid
to deal with the problem, and who could not find a way around it.

We solved the problem first by my wife taking a full-time job outside
Matasano, which got us group coverage, and then by starting group coverage at
Matasano.

------
tking8924
I think its important to note their correction:

"An earlier version of a headline accompanying this article on the home page
was incorrect. The health law is projected to result in a voluntary reduction
in the work force equal to 2.5 million full-time workers, according to the
Congressional Budget Office, not two million fewer jobs."

~~~
coldcode
Seems like a rather glaring error to make. It's a huge difference between
retirees and the unemployed.

~~~
300bps
I think it would also be a glaring error to assume these are retirees. What
evidence do you have that they are retirees and not 30 year olds that are
purposely holding back productivity because of the incentive the government is
now giving to not work?

~~~
jeremymcanally
Uh, what? The government isn't really giving an incentive at all. If I were
young and didn't have a lifestyle that required a full-time salary, I
certainly wouldn't be shackled to a full-time job just to keep insurance. I
think that's the case for a ton of people.

You also have to consider the small business case. I can't tell you how many
technology workers I know who have health issues and would otherwise be
building a startup or working as a consultant, but before the ACA they could
never dream of getting or keeping health insurance. I mean I'm a relatively
healthy 20-something and was denied health insurance several times, and when I
was approved, was paying ridiculous amounts per month because I was 10 pounds
overweight.

Putting those prices back in line for most people and not tying health
insurance to a full-time job is the whole point. I fail to see how this is
government offering an incentive of any sort, unless that's what you meant and
it was poorly phrased?

~~~
300bps
_The government isn 't really giving an incentive at all_

This statement is incredibly naive and shows a complete lack of knowledge of
economics. When the government gives incentives for making less money, then
they are giving an incentive to make less money. It's that simple, but let me
explain.

To get a bronze family plan on healthcare.gov, I was quoted $12,000 per year
with a $12,700 deductible. Basically, I'd be paying $24,000 per year for
healthcare.

That's the list price, which is what I have to pay if my wife and I make more
than $96,000 per year (1/4 of the income goes toward healthcare). The cost
goes down the less I make below $96,000. This is government giving me an
incentive to make less money.

~~~
byoung2
* This is government giving me an incentive to make less money.*

Or at least report less income. I bet a lot of people will move into the
shadow economy, and get paid in cash. Instead of getting a W2 with 50k on it,
I can work a part time job and report 20k, and do some off books work for 30k.
I would qualify for the subsidy, and get a chunk of cash that I don't pay
taxes on.

~~~
dllthomas
Of course, prosecution for tax evasion when you're noticed living beyond your
means is an incentive not to do that.

~~~
hga
Funny enough, it's just been reported that under Obama criminal tax
prosecutions have gone up, e.g. [http://news.yahoo.com/u-fighting-increase-
tax-crimes-under-o...](http://news.yahoo.com/u-fighting-increase-tax-crimes-
under-obama-watchdog-205905030--business.html)

" _[...] under Obama the average annual number of tax crime prosecutions
sought by the Justice Department has been 1,568, versus 1,303 under Bush._ "

Doesn't sound like that's going to strike fear in the hearts of many. Plus I
suspect detecting small fry like in byoung2's example is rather difficult.

~~~
maxerickson
How many off the books $30,000 jobs do you think there are?

I'm sure there are lots of them, but I wonder if there are so many that it is
something to worry about.

~~~
byoung2
_How many off the books $30,000 jobs do you think there are?_

Given the audience of this site, web design would be the obvious choice. But
here are some more:

[http://livesafely.org/financial-freedom/67-jobs-that-pay-
und...](http://livesafely.org/financial-freedom/67-jobs-that-pay-under-the-
table/)

~~~
maxerickson
That's a list of roles that does nothing to establish that they provide
opportunities for $30k and nothing to estimate how many such positions are
available.

I'm not arguing that cash jobs are rare or nonexistent. I'm wondering how
prevalent "really good ones" actually are.

($30k being a real good cash job is just like my opinion, but whatever)

~~~
byoung2
It would be very difficult to count the number of people doing these jobs for
cash since they aren't reporting the income, but it isn't hard to imagine that
these jobs could pay 30k if you combine some of the lower paying ones (e.g.
$10/hour of gardening and day labor for 60 hours a week), or if you have
skills that pay more (I did test prep tutoring for $60/hour in college).

------
rwissmann
The whole discussion is baffling. The US health care system consumes almost
20% of GDP. That is twice as much as any other developed country - without
seeing better health care results.

Making changes to a system that corresponds to one fifth of the annual
economic output will obviously have massive consequences. However, it is hard
to see how you could possible make the economics of US health care worse. ACA
gives more people the ability to individually choose their health care
insurance, thus increasing competition and hopefully giving the health care
buy side more incentive to drive down prices.

~~~
jboggan
Choosing not to have a certain level of health insurance or any health
insurance at all is also a choice. Or rather, it was.

------
rtpg
This title will be read by people and a lot will interpret it as 'less jobs'.
But the _exact opposite_ will happen: Some people will work less, so more
people will need to be hired. Plus wages will have to go up to account for the
shortage.

In a way, the ACA is creating jobs. Or at the very least, it'll increase
wages. That's a selling point.

EDIT: I thought I wrote the "increasing jobs" in a "wouldn't it be funny if
this were true" sort of sense, guess I didn't.

As for the wage increase, Business insider seems to think so at least
([http://www.businessinsider.com/the-buried-lede-in-the-cbo-
re...](http://www.businessinsider.com/the-buried-lede-in-the-cbo-report-
obamacare-will-raise-wages-2014-2)).

~~~
yummyfajitas
Your interpretation of the article is not supported by the body. If the CBO
believed in the effect you postulate, they would not predict fewer jobs (more
precisely, reduced effort equivalent to fewer jobs).

According to the body, hours worked and full time employment will drop. This
is a straightforward supply shock, along the same lines as the oil shortage of
the 70's (assuming of course you believe in reducing the entire economy to 2
graphs, as the Keynesians often do).

Also, increasing wages in a recession is a big no-no if you believe in
Keynesian economics. Assuming this effect is not taken into account by the
CBO's headline number, it means there will be further job losses.

~~~
dragonwriter
> If the CBO believed in the effect you postulate, they would not predict
> fewer jobs.

They're predicting a smaller labor force (non-institutionalized population of
working age working _or actively seeking work_ ) resulting from the reduced
health insecurity from the ACA, not fewer jobs. [1]

To see where that fits into the unemployment picture, understand that the
unemployment rate is (1 - (Filled Jobs / Labor Force)).

> Also, increasing wages in a recession is a big no-no if you believe in
> Keynesian economics

We're not in a recession. We're in an expansion in which both wages and
employment rates have recovered slower than normal -- which was also true in
the _last_ expansion between the 2001 recession and the Great Recession --
which is why it _feels_ like we've been in a 13 year recession to many people
who aren't major capitalists, though there have only been 26 months of
official recession in that period.

[1] The ACA effect is described on p. 14 of the report [2], which is linked
from the NYTimes article, in the section under the heading "Labor Force
Participation" (heading on p. 13).

[2]
[https://www.cbo.gov/sites/default/files/cbofiles/attachments...](https://www.cbo.gov/sites/default/files/cbofiles/attachments/45011-LaborMarketReview.pdf)

~~~
yummyfajitas
_They 're predicting a smaller labor force (non-institutionalized population
of working age working or actively seeking work) resulting from the reduced
health insecurity from the ACA, not fewer jobs._

According to the CBO, the difference between actual and potential GDP will
decline to 0.5% by 2017. At that point (and possibly before) a reduced labor
force is reduced jobs and (more importantly) reduced production.

It could result in reduced jobs/production even before that if workers who
choose to reduce output are not interchangeable with unemployed [1] workers
willing to take those jobs at the same wage.

 _We 're not in a recession. We're in an expansion in which both wages and
employment rates have recovered slower than normal_

Either we need fiscal/monetary stimulus or not. If we need stimulus,
increasing wages is a bad idea according to all mainstream economic theories
(Keynesian, Monetarist, Structuralist). Which is it?

Here is the report, btw:
[https://www.cbo.gov/sites/default/files/cbofiles/attachments...](https://www.cbo.gov/sites/default/files/cbofiles/attachments/45011-LaborMarketReview.pdf)

[1] Including discouraged, at least if employers can find the discouraged
workers.

~~~
dragonwriter
As we are in an expansion, we don't really need stimulus, we need retraction
of the policy changes of the last 35, and particularly the last 15, years that
redirected more of the gains from private sector expansion to the capital and
the very upper end of non-capital income earners, at the expense of everyone
else; stimulus in these conditions doesn't really address the fundamental
problem. At best, it provides a short-term backstop against the fundamental
weakness of a poorly-distributed expansion crashing back into recession, but
even that is hampered by the same distributional problems when using
traditional monetary and fiscal stimulus levers.

Sure, from the POV of much of the workforce the economic. car isn't going
anywhere, but stimulus is like trying to give it a jump start when the engine
is runnin but the transmission is in neutral.

------
joshuaheard
The economy is a measurement of the productivity of the workers. By cutting 2
million man/hours, or whatever metric they use, you are cutting the economic
productivity that much. So, it will hurt the economy no matter how you spin
it.

Further, it is not like they are getting health care due to an efficiency in
the system. The government is taking resources from the productive (taxes) and
giving it to the unproductive (subsidies) in order to purchase insurance. This
will further erode economic productivity.

~~~
mchristo34
This reflects a misunderstanding of the study, the article written about the
study, the words "productivity", "economics" and the phrase "economic
productivity". Jesus christ.

------
heydenberk
People who would otherwise spend time with their families, friends, hobbies
and side projects will no longer be forced to work more hours at their jobs.
Others who don't have full-time jobs will have an easier time getting them.
Some good news for once.

~~~
angrybits
These are houly people that need the hours to make ends meet. They are being
forced into part time so that they aren't eligible. This is definitely a net
negative, but not the least bit surprising.

~~~
throwwit
Part time jobs have already been leveraged by companies to reduce obligations.
I'm not sure if there's much left to squeeze out at this point.

~~~
hga
With a deadline of the end of this year, I suspect we've only seen a fraction
of what'll happen when the employer mandate goes into effect. Especially since
a bunch of regulations for big companies, the ones that self-insure, haven't
been finished yet, so it's probably up in the air if such maneuvers will help
(i.e. would D.C. pass up such an opportunity to squeeze more cash out of
them?)

------
michaelochurch
_Correction: February 4, 2014 An earlier version of a headline accompanying
this article on the home page was incorrect. The health law is projected to
result in a voluntary reduction in the work force equal to 2.5 million full-
time workers, according to the Congressional Budget Office, not two million
fewer jobs._

If true, this is a good thing. We, as a society, don't need "jobs" or hours
worked. We need stuff made. Voluntary attrition of the least productive
5-billion person-hours per year won't hurt us much, but that will cause wages
to rise (which will, over time, improve what is produced).

We're already producing a lot of stuff. What we need now is a qualitative
focus, serious consideration of sustainability and, above all, better
leadership. Taking some pressure off the lower and middle classes (i.e.
peeling back the wage serfdom that gives power to feudal strongmen) is a
start.

There used to be a Fordist connection between general prosperity and the well-
being of businesses, rippling up to the very rich. But the consumer credit
boom killed that (sort of). Instead of letting wages rise or prices fall, the
poors could be pumped full of loans they couldn't afford to repay. We saw, in
2008, how well that works out, but the fundamental structure of society hasn't
changed.

Obama has made many tactical mistakes with the PPACA, and I wish he had
started at single-payer to make public-option the compromise, but if
"Obamacare" is bringing us back toward a more cooperative, progressive
society, then that's a good thing.

