The RFRA was enacted to block other laws that interfere with Americans' ability to practice their religion, and it was praised by liberals when it became law back in 1993. Bill Clinton happily signed the law, which overturned a 1990 Supreme Court decision by conservative Justice Antonin Scalia that effectively prohibited Native Americans from using the drug peyote even though it was part of a religious ritual.
The Religious Freedom Restoration Act reasserts a broadly accepted American concept of giving wide latitude to religious practices that many might regard as odd or unconventional. The bill deserves passage. ... With the Restoration Act, Congress asserts its own interest in protecting religious liberty. It's a welcome antidote to the official insensitivity to religion the Court spawned in 1990.
Of course, it's ironic that conservative Hobby Lobby is now trying to use the RFRA to undo a big part of a health care overhaul that many liberals have spent years fighting for. To do so, the arts and crafts chain will have to convince the Supreme Court that forcing employers to pay for birth control coverage doesn't serve a compelling government interest.
The Congressional Budget Office on Tuesday said that the Affordable Care Act will contribute to the equivalent of 2 million workers out of the labor market by 2017, as employees work fewer hours or decide to drop out of the labor force entirely.
The CBO revised much of its outlook on the Affordable Care Act in a new report released Tuesday. It said that much of the loss would come from workers choosing to provide less labor, not from employers deciding not to hire workers because of the law.
From the report:
CBO estimates that the ACA will reduce the total number of hours worked, on net, by about 1.5 percent to 2.0 percent during the period from 2017 to 2024, almost entirely because workers will choose to supply less labor — given the new taxes and other incentives they will face and the financial benefits some will receive.
The reduction in the numbers of hours worked projected by the CBO will lead to the equivalent of 2 million fewer workers in the labor force in 2017. That number will rise to about 2.5 million in 2024. Previously, the CBO had estimated the equivalent of 800,000 fewer workers by 2021.
"Although CBO projects that total employment (and compensation) will increase over the coming decade, that increase will be smaller than it would have been in the absence of the ACA," the CBO said in the report.
More from the report:
CBO has increased its estimate of the effect of a given reduction in aggregate compensation under the ACA on hours worked. CBO’s earlier estimate was based on a simplifying assumption that affected workers would have average earnings—in which case the percentage reductions in compensation and hours worked would be roughly the same. However, people whose employment or hours worked will be most affected by the ACA are expected to have below-average earnings because the effects of the subsidies that are available through exchanges and of expanded Medicaid eligibility on the amount of labor supplied by lower-income people are likely to be greater than the effects of increased taxes on the amount of labor supplied by higher-income people.
There is, of course, a disclaimer — the projections are subject to "substantial uncertainty" because of the broad, sweeping nature of a law that has yet to be fully implemented.
The White House pushed back on interpretations of the report, saying that any claims the Affordable Care Act hurts jobs are "belied by the facts in the CBO report."
"Over the longer run, CBO finds that because of this law, individuals will be empowered to make choices about their own lives and livelihoods, like retiring on time rather than working into their elderly years or choosing to spend more time with their families," Press Secretary Jay Carney said in a statement.
"At the beginning of this year, we noted that as part of this new day in health care, Americans would no longer be trapped in a job just to provide coverage for their families, and would have the opportunity to pursue their dreams.
In a statement, House Speaker John Boehner (R-Ohio) said the report confirmed the "devastating impact of Obamacare on jobs."
"For years, Republicans have said that the president’s health care law creates uncertainty for small businesses, hurts take-home pay, and makes it harder to invest in new workers," Boehner said. "The middle class is getting squeezed in this economy, and this CBO report confirms that Obamacare is making it worse."
The CBO also revised its projection of 2014 enrollment in federal health exchanges, because of the early turmoil with the federal health exchange website HealthCare.gov. The office said that only 6 million people would likely sign up through the exchanges by a March deadline, down from an original projection of 7 million.
But the CBO expects the uptick in enrollment to continue for the next few years. By 2020, it said, only about 30 million people would be without insurance, down from 45 million this year.
The CBO released its new budget and economic projections today, and here's the finding everybody is talking about: By 2024, the Affordable Care Act will reduce full time-equivalent employment by about 2.5 million workers, compared to what it would be if the law hadn't gone into effect. This is about triple what the CBO estimated when it first scored the law in 2010.
There's been a sort of annoying conversation about the report today, with conservatives saying "see? Obamacare kills jobs," and liberals insisting the reduction in labor supply is a good thing, because it reflects people choosing to work less once they're no longer tied to their jobs for health insurance.
The truth is more complicated: The law will reduce work hours through several mechanisms, some of which are desirable and some of which aren't. Here are seven things you should know about Obamacare, jobs, and the CBO estimate:
The decline in work will be almost entirely because people choose to work less, not because employers choose to hire less. Republicans tend to talk about Obamacare as "forcing people into part-time work." But CBO expects the law to have "small or negligible" effects on labor demand in most parts of the economy. The main effects will come on the labor supply side. This has important implications for wages: While a decline in labor demand will tend to reduce wages, a withdrawal of labor supply may actually help push them up, as employers compete to hire from a reduced pool of available workers.
Obamacare will discourage people from working in two main ways: through "income effects" and "substitution effects." Broadly, fiscal policies have two kinds of effects on behavior. There are income effects: When you give a person a subsidized health plan, you raise that person's real income, making it easier for him to quit his job, work fewer hours, or take a job that doesn't offer insurance. And there are substitution effects: If you phase out that person's health insurance subsidy with rising income, you encourage him to work less, and instead substitute non-taxed activities, such as leisure or child-rearing. Importantly, this substitution is a distortion: In absence of the tax, the worker would have preferred to work and earn his pre-tax wage, rather than spend time on something else.
The work-discouraging substitution effect from Obamacare is clearly bad. For workers who rely on health insurance subsidies created by the law, Obamacare will reduce the marginal return to labor: That is, they'll get less after-tax income for working one more hour. This is because a higher income will mean a smaller health plan subsidy. The effective tax rate will vary based on individual circumstances. For workers who work only part of the year (and therefore can get a cheap subsidized plan during the part of the year they're unemployed) CBO pegs the typical tax rate at 15%. For a single adult with a low or moderate income who works all year without employer-based health coverage, my back-of-the-envelope math puts the tax rate around 10%.
The work-discouraging income effect from Obamacare is mostly good.The pre-Obamacare health policy status quo, which focused heavily on tying insurance to full-time employment, provided a strong incentive for people to be full-time employed. Easy availability of comprehensive, subsidized health plans will make it easier for people to retire before age 65, quit a full-time job to start a business, or shift to part-time work and spend more time raising children or attending school. This is a feature, not a bug. As a Senior White House Official pointed out on a press call this afternoon, Social Security and Medicare reduce employment among seniors; this (making retirement possible) is a key aim of those programs, not a negative side-effect.
Any alternative policy to significantly expand health coverage will also have income and substitution effects that reduce labor supply. If you give out subsidies for health insurance that aren't tied to employment, you'll create an income effect that makes it easier for people to work less. If you phase out those subsidies, you'll create a substitution effect that encourages people to work fewer hours. (For example, the Republican Coburn-Burr-Hatch Obamacare alternative has both of these features, and so would also reduce employment relative to the pre-Obamacare status quo.) If you don't phase out the subsidies, they'll be really expensive, and you'll have to raise some tax to pay for them; that tax will also create a substitution effect that discourages work. There is a trade-off here, as with any government program that costs money: Taxes discourage work and reduce economic output, but they pay for things we value, like a near-universal health insurance entitlement.
Obamacare could be improved so it doesn't discourage labor supply as much. These fixes should be focused on alleviating the substitution effects, not the desirable income effects. The most obvious way to do this is by repealing the penalty on employers who don't provide health coverage, which has already been delayed to 2015. (While people mostly talk about the penalty as a policy that might reduce labor demand, CBO expects most of the penalty to be passed through to workers in the form of lower wages, which will reduce labor supply.) The phaseout range for subsidies could be extended, so workers lose less subsidy value for every extra dollar they earn. Most importantly, more effective policies to contain health care costs would reduce the size of the subsidies necessary to get people covered, which would then reduce the severity of the phaseouts.
Obamacare may positively affect the labor market in ways not addressed in the CBO report. De-linking insurance from employment isn't just good for personal fulfillment; making it easier for people to go back to school, take jobs that don't come with health insurance, or start their own businesses should lead to better job-matching and higher productivity. It remains to be seen how much of the recent slowdown in health inflation is attributable to the ACA, but if it persists, it will have positive economic and labor market effects beyond the direct fiscal effects of the law. Slower health inflation will lower the cost of health insurance to private employers, leading to some combination of higher labor demand and higher wages.
Broadly, one key goal of health policy should be to let people make work decisions without worrying about how those decisions affect their health insurance. The CBO report shows that Obamacare partly furthers that goal (by making insurance available to more people, regardless of income or employment status) and partly inhibits it (by withdrawing benefits from people who work more). Efforts to optimize the policy should focus on de-linking work decisions from insurance, not simply on maximizing the amount of labor supply.
Earlier today, the Congressional Budget Office released a report saying the Affordable Care Act will reduce employment by 2.5 million full time-equivalent workers as of 2024, almost entirely through effects on the labor supply side: That is, the law won't much change firms' interest in hiring, but it will make people want to work less.
Here's a key implication of that finding that most people are glossing over: Obamacare will drive wages up.
The price of labor, like any good or service, is determined by supply and demand. If producers of labor (workers) become less inclined to sell it, but consumers of labor (firms) are unchanged in their interest in buying, then the price of labor has to rise in order to bring the quantity supplied and the quantity demanded into line.
If labor supply falls and labor demand remains the same, how will the labor market clear? Higher wages. (3/4)
This helps explain why so many business owners have been apoplectic about the law.
The usual warning about Obamacare from the right has been that it will "kill jobs" by making firms less inclined to hire. While this warning tends to come from (or on behalf of) business owners, the phenomenon it describes would mostly have negative effects on workers, by increasing unemployment and reducing their ability to command wage increases.
If (as CBO predicts) the decline in work is driven almost entirely by a decline in labor supply, the upshot will be very different. Employers will be left holding the bag economically. Workers will choose to work fewer hours; since firms won't be any less interested in hiring, they'll have to pay more per hour to get those workers in the door.
The positive wage effect should be concentrated among low-skill workers, who will face the greatest discouragement to work from Obamacare, and therefore will be able to command the greatest wage increases in order to keep working.
More broadly, Obamacare alters the employer-employee relationship in a way that empowers employees. When an employee is dependent on his job not just for a wage but for health insurance, he is less able to threaten to leave if he doesn't get a raise. Severing the work-insurance link strengthens the employee's hand in bargaining — which is bad for employers and good for workers.
Over the last few decades, owners of capital have captured a rising share of national income, as wage growth has lagged. By strengthening workers' hands in negotiation, Obamacare should increase the labor share of GDP and reduce income inequality. The CBO finding that the law will reduce labor supply is just one example of that.
Lost amidst the furor over the Affordable Care Act and its effect on jobs is a much more worrisome trend in the labor market: the labor force participation rate continues to decline.
In a separate report released yesterday, the Congressional Budget Office (CBO) projected that the labor force participation rate would decline from 62.9% in the fourth quarter of 2013 to 60.8% by 2024.
This is after the rate fell from a pre-recession peak of nearly 66%. In fact, the labor force participation rate was above 67% in the late 1990s and early 2000s.
Why is this happening? A few reasons:
Demographics - The Baby Boomer generation is getting older and retiring. As they do, a smaller percentage of the country will be working. Of the nearly three percentage points the labor force participation rate has dropped in the past six years, CBO attributes half of them to aging of the population. This trend is only going to increase during the next decade.
Workers Permanently Dropping Out of the Labor Force - This one was - and maybe still is - avoidable, but we need to act now. Millions of workers have been out of work more than 26 weeks. Many more have already dropped out of the labor force altogether and won't return. CBO estimates that so far 0.5% of the drop in the participation rate is from workers permanently exiting the work force.
Affordable Care Act - This was the big topic of conversation yesterday. CBO found that Obamacare will lead to a work reduction of the equivalent of more than 2 million jobs. BI's Josh Barro ran through the three reasons for this yesterday:
- One is good: the law allows workers to cut back their hours or exit the labor force without fear of being unable to purchase health insurance. This is commonly referred to as 'job lock' and health reform fixes it.
- One is bad: The Medicaid expansion and means-tested subsidies increase the marginal tax rate on workers and disincentivize work. This is an unavoidable flaw with means-tested programs that no one has found a way around.
- One depends on your views: Some people will work less because they can keep the same standard of living while working fewer hours. Liberals may view this as a good thing. Conservatives may not.
We don't know how much of work reduction is a result of each. If it is mostly the result of eliminating job-lock, then that is excellent. If it is the result of incentives, that's bad.
However, what we do know is that the combination of those three effects will lead to a smaller labor force participation rate and slower growth. That will lead to more spending on entitlements, a reduced tax base and larger deficits. From 2018 to 2024, CBO projects that GDP growth will average only 2.2% due to those factors.
"In CBO's projections, the growth of potential GDP over the next 10 years is much slower than the average since 1950," the report says. "The difference stems primarily from demographic trends that have significantly reduce the growth of the labor force. In addition, changes in people's economic incentives caused by federal tax and spending policies set in current law are expected to keep hours worked and potential output during the next 10 years lower than they would be otherwise."
Obamacare may also increase productivity through reduced health care costs - or it may not. We don't know and CBO did not attempt to quantify it. We do know that reduced labor force participation will be a drag on growth.
Here are five ways (some good, some bad) we can fix it:
Get the long-term unemployed back to work - Instead of losing millions of workers to permanent unemployment, we could implement policies to help them find jobs. Sen. John Thune (R-S.D.) is working on a plan that would do just that. The greatest lasting consequence of the financial crisis is the potential loss of these able-bodied workers. Priority number one should be to prevent that from happening.
Reform our immigration system - A great way to replenish our labor force is by opening our borders and letting more immigrants into the country, particularly high-skilled workers. CBO Director Doug Elmendorf said as much in his testimony before the House Budget Committee today.
Adjust Obamacare - One way to reduce the disincentive effects of Obamacare is to allow more people to receive subsidies so that the reduction in them is more gradual. This will lower the effective marginal tax rate on workers and reduce the work disincentives that worry conservatives.
Increase work incentives in other safety net programs - Many conservatives favor tying work to programs such as food stamps to reduce the work disincentives of them. I find that proposition dubious - food stamps are not generous to begin with so low income Americans already have strong incentives to work. In addition, tying safety net programs to work exacerbates cyclical problems during recessions. When a person lose their job, they also then lose their government benefits. This happened with the earned income tax credit in the most recent recession. Nevertheless, increasing work incentives could increase labor force participation.
Raise the retirement age for Social Security and Medicare - This would effectively force older Americans to work longer before retiring. Once again, this is mistaken policy. Recent gains in life expectancy have accrued almost entirely to the rich. Middle-class and poor Americans are still living the same length of time. We shouldn't force them to work longer for their promised retirement if they aren't living any longer. However, this would increase labor force participation as well.
For years, Republicans have criticized the Affordable Care Act for holding back economic growth and contributing to the slow recovery.
After the mediocre jobs report last Friday, Republican National Committee Chairman Reince Priebus continued to make that accusation.
“This week the Congressional Budget Office (CBO) said that fewer Americans will be working because of ObamaCare." Priebus said in a statement. "Today’s jobs report shows us exactly why that’s so devastating.
“America needs a larger, stronger, fully employed workforce, but there’s one thing standing in the way. It’s ObamaCare, and we can’t afford it any longer.”
Is Priebus right? Is Obamacare "standing in the way" of full employment?
To begin with: Obamacare is certainly not the main reason the economy hasn't reached full employment. The law's main provisions just took effect last month while the recovery has been slow for years now. A lack of demand for goods and services has been the true cause of the slow recovery, much of it brought on by unnecessary austerity that Republicans have championed.
However, that doesn't mean that Obamacare won't make it more difficult to return to full employment in the coming months and years. There are a few reasons to expect it might and a few to think otherwise. Let's break it down.
Last week, CBO released a widely talked about report on the budget outlook, including an update on the labor market effects of Obamacare. The budget office found that the law will affect the supply and demand for labor in a variety of ways.
Effect on Labor Demand
There are two main ways that the law will affect employers' demand for labor:
New regulations will increase compliance costs and can cause firms to adjust their hiring decisions. The two features of Obamacare that will significantly increase costs for firms are the employer mandate and the excise tax on high cost health insurance plans. The Obama administration has already delayed the mandate until 2015 and it is unclear if it will ever take effect. The excise tax doesn't kick in until 2018.
CBO projects that firms will eventually pass on the costs of both of those regulations to their workers in the form of lower real wages. But that is unlikely to happen in the first few years, because employers often do not cut their employees' nominal wages (a phenomenon known as sticky wages) and instead allow inflation to slowly eat away at them. Thus, in the first few years, firms may pay the costs of the mandate and excise taxes themselves and adjust their hiring decisions accordingly. Of course, neither of those provisions has taken effect yet so they should have very little impact on labor demand so far.
CBO also suggests that uncertainty over different provisions in the law "probably has encouraged some employers to delay hiring," but has not quantified that effect. In addition, other regulations will increase costs for employers, but CBO did not mention them.
The Medicaid expansion and exchange subsidies will increase demand for goods and services. CBO reports that during the next few years, Obamacare will stimulate demand in the economy and cause firms to increase their hiring. This will be partially offset by new taxes in the law on high-income households, but the net effect is still positive.
"On balance, CBO estimates that the ACA will boost overall demand for goods and services over the next few years because the people who will benefit from the expansion of Medicaid and from access to the exchange subsidies are predominantly in lower-income households and thus are likely to spend a considerable fraction of their additional resources on goods and services - whereas people who pay the higher taxes are likely to change their spending to a lesser degree."
The budget office does not make any attempt to quantify which effect is stronger. However, it does note that the stimulative effect on demand for goods and services is "especially strong under conditions such as those now prevailing in the United States."
Effect on Labor Supply
The Affordable Care Act will also affect the supply of labor, although less so in the next few years. The main way it does so is through the Medicaid expansion and exchange subsidies, which will disincentivize work and cause a reduction in total hours worked. However, these disincentives will be smaller in the first few years as fewer Americans will receive subsidies or coverage through the Medicaid expansion.
This is where it gets complicated. Obamacare's new disincentives to work will affect the economy's path to full employment in two ways:
Workers who reduce their hours or drop out of the labor force may open up jobs for the unemployed. CBO explicitly points this out as a reason that the law will have a smaller effect on employment in the next few years. In fact, this would actually move the economy closer to full employment if other unemployed people fill their positions.
Some unemployed people may pass up jobs they otherwise would have taken if not for Obamacare. This is the classic conservative argument against unemployment insurance (UI). The work disincentives cause unemployed Americans to forgo jobs and hold back the economy. However, a number of studies have found that UI has had only a slight negative effect on employment since the financial crisis. Since Obamacare is so new, similar studies do not exist for the law.
It's unclear which of those effects dominates the other. Once the economy returns to full employment, the first effect will dissipate. That's why CBO projects that in 2024, Obamacare will lead to a reduction of 2.5 million full-time equivalent jobs in the workforce.
So, what's the final answer?
Unfortunately, it's not clear.
CBO reports that there will be a small drop in employment in the 2014-2016 period, but that does not necessarily indicate that the law will stand in the way of full employment since it will also create a smaller labor force. For instance, if five workers exit the labor force, but four unemployed ones take their place, that would be both a drop in employment and bring us closer to full employment. On the other hand, if other unemployed Americans forgo jobs because of the law, then that would reduce employment and make it harder to reach full employment.
Nevertheless, the law is brand new and unlikely to severely distort the labor market in the upcoming months. To blame the January job's report on the law is absurd. At most, Obamacare may be marginally holding back the economy from reaching full employment. But it's also just as likely that it is helping the economy return to full employment right now.
Finally, while we should be aware of how Obamacare affects the economy, we also must remember that the goal of the law is to bring affordable health insurance to millions of Americans. It's not supposed to bring us closer to full employment and some distortions in the labor market are acceptable along the way. There are plenty of other things Congress can do to spur on hiring - from policies targeted at the long-term unemployed to smart infrastructure spending.
The Obama administration announced Monday that it will delay implementation of part of the Affordable Care Act's employer mandate for the second consecutive year.
The Treasury Department said it will delay the mandate's penalty another year for small businesses with 50-99 workers. It will also adjust some of the requirements for larger employers.
Under the new Treasury Department rules, businesses with 100 employees or more must offer coverage to at least 70% of full-time workers in 2015 and 95% in 2016, or face a penalty.
Though the administration emphasized that the change won't affect a large number of people, the Treasury Department hinted that it was meant to assuage small businesses' concerns about the law's implementation.
"While about 96% of employers are not subject to the employer responsibility provision, for those employers that are, we will continue to make the compliance process simpler and easier to navigate," Assistant Secretary for Tax Policy Mark J. Mazur said in a statement.
"Today’s final regulations phase in the standards to ensure that larger employers either offer quality, affordable coverage or make an employer responsibility payment starting in 2015 to help offset the cost to taxpayers of coverage or subsidies to their employees."
House Majority Leader Eric Cantor (R-Va.) joked immediately on Twitter that after the latest delay of part of the law, Obamacare should have a new, Olympic-themed logo:
House Speaker John Boehner slammed President Barack Obama for what he said was a corporate break.
"Once again, the president is giving a break to corporations while individuals and families are still stuck under the mandates of his health care law," Boehner said.
"And, once again, the president is rewriting law on a whim. If the administration doesn’t believe employers can manage the burden of the law, how can struggling families be expected to? This continued manipulation by the president breeds confusion and erodes Americans’ confidence in him and his health care law. We need fairness for all, with relief from Obamacare for every American."
"I mean this is stuff that that you do in a banana republic," Krauthammer said Monday on Fox News' "Special Report."
"It's as if the law is simply a blackboard on which Obama writes any number he wants, any delay he wants, and any provision. It' s now reached a point where it is so endemic that nobody even notices or complains."
The Obama administration announced on Monday that it will delay the mandate's penalty for small businesses with 50-99 workers. It will also adjust some of the requirements for larger employers.
Under the new Treasury Department rules, businesses with 100 employees or more must offer coverage to at least 70% of full-time workers in 2015 and 95% in 2016, or face a penalty.
It's the second consecutive year the Obama administration has delayed part of the employer mandate, amid concerns from the small-business community about the health-care law's effect on business. Krauthammer's "banana republic" comment stemmed from the notion that it was meant to assuage business concerns ahead of the 2014 midterm elections.
"It's changing a law in the way that you are not allowed to do," Krauthammer said.
The administration took pains to emphasize that the change will not affect many people, as about 96% of employers are not currently subject to the mandate.
The Wall Street Journal is out with an editorial this morning that attempts to conflate the Obama administration's announcement yesterday that it was delaying the employer mandate again with last week's Congressional Budget Office report that found that the Affordable Care would lead to a reduction in work.
The editorial mischaracterizes liberal reaction to the report and then proceeds to misunderstand the report itself.
Let's break it down.
Yesterday, Health and Human Services announced that employers with 50-99 employees would be exempt from the mandate until January 1, 2016 and employers with 100+ employees would only have to cover 70% of their workers next year and 95% thereafter.
The Journal argues that this delay validates conservative arguments that Obamacare is hurting the economy. Forgive the long block quote:
Like the individual mandate, the employer decree is central to ObamaCare's claim of universal coverage, but employers said the new labor costs—and the onerous reporting and tax-enforcement rules—would damage job creation and the economy.
Liberals insisted that such arguments were false if not beneath contempt, but then all of a sudden the White House implicitly endorsed the other side. Now the new delay arrives amid a furious debate about jobs after a damning Congressional Budget Office report last week, only this time with liberals celebrating ObamaCare's supposed benefits to the job market.
Well, which is it? Either ObamaCare is ushering in a worker's paradise, in which case by the White House's own logic exempting businesses from its ministrations is harming employees. Or else the mandate really is leading business to cut back on hiring, hours and shifting workers to part-time as the evidence in the real economy suggests.
The Journal is right that the employer mandate delay is an indication that the White House is concerned about its effects on the labor market in the next few years, but that doesn't mean that the law won't have a positive impact on workers over the long-term.
These are two entirely separate ideas that the Journal conflates to set-up a false comparison:
The employer mandate will reduce hiring in the short-term. CBO projects that the costs of the employer mandate and other regulations will eventually be passed on to employees, who will adjust their working hours accordingly. That is, eventually the employer mandate will lead to reductions in the labor supply as employers reduce their compensation.
However, employers are often unwilling to reduce their employees' nominal wages (a phenomenon known as sticky wages) and will instead let inflation reduce their real value over time. Thus, in the short-term, employers may not pass on those costs to their employees, but will eat the costs themselves and adjust their hiring in response.
Obamacare will have both positive and negative effects on the labor market in the long-term. Liberals have not argued that Obamacare will usher "in a worker's paradise." Instead, they have argued that some features of the law's effect on the labor market - such as ending job lock - are a positive development while others - the disincentive effects on work - are a negative one. The White House and many liberals believe the net effect is positive overall.
The Journal sets up a straw man argument that it's impossible to have both of these views.
But it's entirely coherent for the administration to phase in the employer mandate, because they believe it will reduce hiring in the short-term, while also arguing that the law enhances worker power over the long-term. Liberals do not have to choose between these ideas.
In addition, CBO also found that, despite the Journal's claims otherwise, "there is no compelling evidence that part-time employment has increased as a result of the ACA." That's as clear as it gets.
The editorial concludes with the following:
Liberals say the law isn't harming jobs or economic growth, but everything this White House does screams the opposite.
The Journal wants to portray Obamacare as a job-killer that liberals have been wrong about all along. But that only works if you ignore what they've been saying, what the law actually does, and instead attack a straw man argument.
This is what happens when a political party spends four years opposing every policy put forward by the White House.
It suddenly finds that it has indirectly criticized many of its own ideas as well. This is the scenario that the Republican Party finds itself in right now.
The arguments over Obamacare and work disincentives this past week demonstrated this clearly.
Republicans struck on a Congressional Budget Office (CBO) report that projected that Obamacare would lead to a reduction of 2.5 million full-time equivalent jobs in the workforce. But this isn't only a feature of Obamacare. The current top conservative health plan, the Coburn-Burr-Hatch plan, which was proposed a few weeks ago, also offers means-tested tax credits to low-income Americans. That means the Coburn-Burr-Hatch plan would also cause a reduction in work, albeit likely less than that of Obamacare.
Many reform conservatives have responded to this charge by pointing out that their preferred health policy would eliminate employer sponsored health insurance altogether and instead offer a tax credit to everyone. Since this tax credit wouldn't be means-tested, it would eliminate most of the work disincentives that Obamacare creates.
But there is a reason Sens. Tom Coburn (R-Okla.), Richard Burr (R-N.C.) and Orin Hatch (R-Utah) did not choose a universal credit. It's because doing so would be extremely disruptive to the health care market. After criticizing Obamacare over the past few months for causing insurers to cancel health plans, Republicans cannot just go and propose a plan that would be much more disruptive.
Short-sighted Republican criticism narrowed the policy options for Coburn, Burr and Hatch to choose from. Now, the party is vehemently criticizing Obamacare for an effect that the Coburn-Burr-Hatch causes as well.
Imagine this: House Majority Leader Eric Cantor (R-Va.) has promised to put a health care reform bill on the floor this year. What will that bill look like? If it is similar to the Coburn-Burr-Hatch proposal, it will also disincentivize work as Obamacare does. How can Republicans support that after the past week of non-stop criticism? Have Republicans already disowned the Coburn-Burr-Hatch plan already? Probably not, but they are dangerously close to doing so.
The larger concern here is that many leaders in the Republican Party are making strides proposing positive policy ideas. But it's a long way towards turning those ideas into pieces of legislation that the whole party can get behind. That will take time, but it also requires that the party not accidentally disown those ideas in the meantime. Instead of reflexively criticizing every Democratic policy, Republican policymakers need to look to see if any of those criticisms overlap with their own ideas.
In cases when they do - such as with the work disincentive effects of means-tested tax credits used for the purchase of health insurance - it's better to hold off on those attacks or make them more nuanced. That's not easy, but it's a key part of building a positive policy agenda as the opposition party. Up until recently, Republicans weren't worried about that part. Now that they are, they need to start rethinking their political attacks in a smarter way.
“These encouraging trends show that more Americans are enrolling every day, and finding quality, affordable coverage in the Marketplace,” Secretary of Health and Human Services Kathleen Sebelius said in a statement.
Of the 3.3 million, about 1.9 million are signed up through the federal exchange, which serves 36 states. 1.4 million are signed up through the exchanges from 14 states and the District of Columbia.
There was a slight uptick in the number of young people who signed up, a fact that HHS pushed in its report. Overall, 27% of enrollees in January were between the ages of 18-34, up from 24% the previous three months. But both are lower than the 40% goal. Young, healthy people signing up is crucial to the success of the law, as their inclusion will help subsidize older and sicker enrollees.
Here's the chart showing the uptick:
The Obama administration did not release data on how many of the people signed up have actually paid their premiums.
Anyone shopping for health insurance in a Colorado resort town may feel like closing the laptop and schussing the slopes to ease frustration. These areas were just named the most expensive for medical coverage under the Affordable Care Act (ACA).
Kaiser Health News — which says its findings are based on recent data from the Kaiser Family Foundation, the federal HealthCare.gov website and state exchanges — gives Colorado's Eagle, Garfield and Pitkin counties (including Aspen and Vail ski getaways) the highest premiums, at $483 a month.
Rural regions of Georgia, Mississippi and Nevada are not far behind, as is a Connecticut suburb of New York City, all of Alaska and most of Wyoming. The premiums are based on the lowest price "silver" plan, which is mid-level coverage that most consumers are buying through the exchanges.
Here are the 10 most costly areas, based on monthly premiums, according to Kaiser Health News:
1. $483 — Colorado mountain resorts (Eagle, Garfield and Pitkin counties). Also, premiums in Colorado's Summit County are $462.
The Kaiser report says the lofty premiums in Colorado can be blamed on high costs for medical care in those areas. In other pricey regions, insurers are able to ask for more money because there is a limited number of hospitals and specialists available to patients.
"High individual insurance rates also reflect the extra costs that come when locals tend to be in poor health and where large numbers of people lack employer-sponsored insurance, leaving providers with more charity cases and lower-reimbursed Medicare patients," according to the report.
Health insurance options beyond the health insurance exchanges
The ACA requires that the uninsured have coverage by the March 31 deadline or face a penalty. The fine in 2014 is $95 or 1 percent of an individual's taxable income, whichever is higher. The penalty climbs to $325 in 2015 and $695 by 2016.
Subsidies are available to help shoulder costs for those who qualify. Consumers are eligible for a tax credit if they earn up to 400 percent of the federal poverty level — that's $94,200 for a family of four in 2013. The tax credits are not available for health insurance purchased outside the exchanges.
You can shop for insurance through the government-run exchange in your state, but there are other options:
Can you get it at work?
Most employer-sponsored plans meet minimum standards set by the feds; your boss should have notified you of that by Oct. 1. Keep in mind, though, that most employer-based plans have open enrollment in the fall. Your workplace can give you the specific details, including deadlines.
Does an employer's plan cover spouses or dependents?
Most work-based health plans extend benefits to spouses, even though they aren't legally required to. Again, check with your employer.
Also, anyone under 26 can remain on their parent's medical plan, even if they already have access to health insurance elsewhere, don't live with them or are married.
Do you qualify for a government health insurance plan?
The ACA says you're covered if you have Medicare or Medicaid; your kids are covered if they receive benefits under the Children's Health Insurance Program.
Medicare is usually eligible to anyone 65 or older, have a disability or end-stage renal disease. You have a seven-month period (starting three months before your 65th birthday) to sign up for Medicare at the government's Medicare.gov site. If you don't sign up then, you can enroll from Jan. 1 to March 31 of each year.
Medicaid eligibility, which has been expanded under the ACA, is based on income and family size. Do you qualify? You can fill out an application at your state's health insurance exchange to find out. You can also see if your kids can be covered through the Children's Health Insurance Program.
Go directly to a health insurer
Some companies that offer medical coverage — including United Healthcare, Humana, Aetna, Cigna and Coventry — aren't participating at some of the exchanges. But, of course, they're still selling health insurance.
You can get relevant information by checking out their websites, talking to their representatives or working with an insurance agent. These companies may provide a larger variety of plans than the exchanges, which offer more standardized coverage.
State governments are realizing how much money they can save by passing on inmate health care costs to the federal government following changes under Obamacare.
Ohio, Illinois, Maryland, Minnesota, and Oregon have all started enrolling inmates in Medicaid if they're hospitalized for more than 24 hours while they're incarcerated and when they get out of jail, according to The Cincinnati Enquirer.
While Medicaid, America's health insurance for the poor, was once rarely given to childless adults, childless adults who make up to 138% of the federal poverty level (about $16,000) are now eligible for Medicaid.
While state and local governments must generally pay for inmates' health care, they are allowed to have them apply for Medicaid if they're hospitalized for at least a day, Bloomberg's Mark Niquette has noted. This lets states pass on the costs of big-ticket items like heart surgery. Since counties often have to pay for poor people's hospital care, it can also save money to have ex-cons enrolled in Medicaid, according to Niquette.
Ohio stands to save $18 million this year alone by enrolling prisoners and ex-cons in Medicaid, according to the Enquirer, and $22 million a year by 2022.
Of course, Obama himself didn't talk a lot about inmate health care when he was trying to sell Obamacare to the American people. In fact, U.S. Senator Kent Conrad, who was on the Senate Finance Committee when Obamacare was enacted, told Bloomberg's Niquette that the increased inmate coverage was an unintended consequence of Obamacare.
“It starts to look a little like a scheme by the states and local jurisdictions to avoid responsibilities that are really theirs,” Conrad told Bloomberg.
WASHINGTON (Reuters) - Hillary Clinton, who leads the pack of potential Democratic 2016 presidential contenders, defended Obamacare on Wednesday but added she was open to "evidence-based changes" in the program, CNN reported.
President Barack Obama's signature healthcare reform law is shaping up as a hot-button campaign issue in congressional elections in November and possibly the 2016 White House race.
The law, which seeks to extend health coverage to millions of uninsured or underinsured people, has been under steady attack by Republicans, who say it is too costly, kills jobs and robs many Americans of healthcare choices.
"I think we are on the right track in many respects," CNN quoted Clinton as saying in remarks in Orlando, Florida, to the Healthcare Information and Management Systems Society.
"But I would be the first to say if things aren't working, then we need people of good faith to come together and make evidence-based changes," said Clinton, who led a failed effort to pass healthcare reform during the administration of her husband, Bill Clinton.
Among issues she said should be addressed were small businesses of 50 or more employees providing health coverage and companies moving people to part-time from full-time work to avoid making healthcare contributions.
Clinton praised Obamacare for allowing people under 26 to stay on their parents' healthcare plans and broadening access to preventive care.
She said all the "misinformation" was making it difficult to discuss the law in Washington.
"Part of the challenge is to clear away all the smoke and try to figure out what is working and what isn't," Clinton, who served as secretary of state in Obama's first term, was quoted by CNN as saying.
"What do we need to do to try to fix this? Because it would be a great tragedy, in my opinion, to take away what has now been provided."
In case you're still wondering how Obamacare is going to affect you, you now have another answer.
You might start seeing Obamacare surcharges on your restaurant checks.
The Executive Editor of CNN Money, Chris Peacock, tweeted a snapshot of one such bill this morning. You can see the surcharge there right at the bottom: $0.20 for "ACA"— a.k.a., the Affordable Care Act, a.k.a., Obamacare.
And now, long after the state stopped making payments to the company, Oracle may be ramping down its efforts to fix the website, even though it still won't let individuals sign up for health care, reports The Oregonian's Nick Budnick.
Over the past week, Oracle has yanked about 100 employees off the Cover Oregon project, sources told Budnick. That would leave about 65 people still working on it.
Sources told Budnick that the remaining Oracle employees appear to be working on maintenance, and not on finishing the site.
After the site missed its Oct. 1 launch date, Oracle executives promised to infuse the project with its best programmers and agreed to fix the most serious bugs for free. By December, Oracle had bulked up the effort from 40 people to 176, "each of them billing between $177 and $374 per hour," Budnick reported.
The site was supposed to cost $43 million and be completed by Feb. 15, 2013. Oracle delivered a website in May, 2013, that wasn't operational.
Oracle has also charged the state more than $90 million over the last two years, and Cover Oregon has refused to pay invoices since September, Budnick reported.
The state had been enrolling people into health care programs by using paper forms. Recently, agents began using a password-protected beta website and has enrolled more than 700 people that way, Budnick reports.
But the site still doesn't let citizens hop on the web and sign up for health care on their own.
Oracle has been taking heat for months. In December, Oregon Senator Jeff Merkley went on television and blasted the company during an interview with NBC's Chuck Todd. Merkley said the site was "in complete dysfunction."
It's actually extremely common for huge IT projects have problems, even in the private market. In 2012, McKinsey released a landmark study that found, on average, 66% of large software projects run over budget while being late and not delivering all of the promised functionality.
Last month Oregon Gov. John Kitzhaber commissioned an independent review to determine what went wrong in this case and if Oregon should sue Oracle, reports news site KGW.com.
We reached out to Oracle for comment and will update when we hear bck. Oracle declined comment on the story published by the Oregonian.
The results of the Institute for Supply Management's monthly survey of firms in the American services sector revealed concern about the implementation of the Affordable Care Act.
"The Affordable Care Act is creating significant financial uncertainty to health care organizations," said a survey respondent from the health care and social assistance industry.
"With little warning, the negative impact on revenue has been unprecedented."
ISM's gauge of monthly hiring trends in the American services sector went negative in February for the first time since 2010.
Some of the slowdown may be attributable to the ACA.
"This would be in line with the slowdown in health care and social assistance payroll growth to just 1,000 per month in January and December from an average of just under 30,000 for the 12 prior months," says Cooper Howes, an economist at Barclays.
"In February, ISM noted that this sector reported the third-largest decline in employment among those reporting, suggesting that this trend could continue."
Obamacare has been delayed once again, so if you like your plan, you really can keep it — through the 2016 election.
In a move that was immediately attacked by Republicans, the Obama administration announced on Tuesday it would allow insurers to keep offering "grandfathered" health care plans that don't meet basic requirements of the Affordable Care Act through Oct. 1, 2016 — a two-year extension.
It means nearly 500,000 people won't get cancellation notices right ahead of the 2014 mid-term elections.
"This reeks of politics," said Brendan Buck, a spokesman for House Speaker John Boehner. "Instead of working with Congress to prevent Americans from losing the plans they like and can afford, the president is unilaterally re-writing laws around the election calendar. You have to wonder if he’s more interested in keeping his promise or keeping seats in the Senate."
In November, after a media firestorm amid a flawed rollout of the health-care law, Obama announced insurance companies could keep offering the grandfathered for another year. The new policy gives states and issuers the option of allowing consumers to renew these plans for another two years.
Administration officials denied any political motives behind the alterations. However, the administration did say the changes were made in consultation with certain Democratic senators including a quarter who are up for re-election this year — Mark Warner (Va.), Jeanne Shaheen (N.H.), Mary Landrieu (La.), and Mark Udall (Colo.).
"These policies, from the U.S. Department of Health and Human Services and the Treasury Department, implement the health care law in a common-sense way by continuing to smooth the transition for consumers and employers, recognizing that in many cases a one-size-fits-all approach doesn’t work best," a senior Obama administration official said.
The administration also announced a change to the "risk corridor" program, which aims to make it easier for insurance companies to transition to the new health-care system. This is done largely by making it less financially risky for them to sell new insurance plans on the exchanges established by the Affordable Care Act. Under the change, the administration said the government won't lose money on the program, and that it would be budget neutral.
"We've always said we were going to take steps to smooth out the implementation," White House press secretary Jay Carney told reporters on Air Force One.
Two surveys released Thursday found that only ten percent of uninsured people who qualify for private insurance have signed up for Obamacare, according to The Washington Post. On top of that, only five in ten uninsured individuals have looked into the exchanges or is thinking about looking into them. So, in a nutshell, the people who are signing up for Obamacare probably already had insurance.
Polling over the last few months has hinted toward this. In November the Kaiser Family Foundation found that 40 percent of uninsured Americans had never even heard of the exchanges. And a December poll found that 45 percent of uninsured Republicans would rather stay uninsured than sign-up for Obummercare. But it's March now. In a little over three weeks the enrollment period will (probably) be over, meaning there's not much time left to inform people that Obamacare exists and would help them.
Supporters of the law have set up 4,000 events over the next three weeks to get people enrolled, especially communities that have been underinformed. “Halfway through the enrollment period, there remained a really big information gap for consumers, and more so for communities of color and people of low income,” Enroll America told The Huffington Post. Enrollment efforts to reach Spanish-speaking citizens have also been lacking, especially in larger states like California.
Still, when March 31 comes and goes we probably won't have a clear idea of how effective the healthcare law was in getting the uninsured enrolled. The administration says it hasn't been tracking the number of uninsured signing up. That may have something to do with how bad the numbers are:
CMS' Cohen, asked how many uninsured signing up for ACA: “That's not a data point we are really collecting in any sort of systematic way”
House Republicans have a bold new strategy to attack Obamacare, which involves huge pay cuts for physicians unless Democrats agree to delay the law's individual mandate to buy insurance.
GOP leaders intend to vote on legislation this week, aides say, to delay the individual mandate in order to fund a "doc fix" that avoids a 24 percent pay cut to physicians under Medicare -- which will automatically take effect on April 1 unless Congress acts. Inaction would disrupt the health care system, in part by causing many doctors to stop accepting Medicare patients.
The strategy is unlikely to succeed and could backfire on Republicans. Delaying the individual mandate is a nonstarter for the Democratic-led Senate and White House. By demanding a largely partisan unraveling of Obamacare in exchange for must-pass bipartisan legislation, they risk being blamed by seniors and the health care industry if the doctor pay cuts go into effect. When Republicans insisted on such an approach for federal funding last fall, the governmentshut down and they took most of the blame.
"This bill represents a new low, even for House Republicans," fumed Drew Hammill, a spokesman for House Minority Leader Nancy Pelosi (D-CA), who decried the plan as "irresponsible and dangerous" and promised it'd be a "legislative dead-end."
The House voted last week to delay the individual mandate for one year. It was the GOP-led chamber's 50th vote to repeal or dismantle Obamacare. The doc fix is a lose-lose dilemma because it requires offsets simply to maintain the status quo, and imposing cuts to influential industry players like hospitals or drug companies is problematic in an election year. It's plausible that Republicans won't insist on the mandate delay if their bill stalls, and may be willing to look elsewhere for offsets to patch the cuts.
"It gives them an easy off ramp to a patch while still saying they tried," said a health industry lobbyist and former congressional Republican aide.
A bit of background: in 1997, Congress enacted a formula to limit Medicare reimbursement rates to physicians, known as the Sustainable Growth Rate (SGR). Starting in 2002, it began imposing significant cuts to doctor payments. Congress responded by routinely passing short-term patches to stave off the cuts (and instead giving doctors pay raises), usually by cutting health care spending elsewhere. There is virtually unanimous agreement in Congress that the cuts shouldn't go into effect, but the formula remains in place because replacing it with a bipartisan alternative would cost a whopping $138 billion over a decade.
Rep. Mike Conaway (R-TX) said Thursday that the House bill will "replace the flawed SGR formula" and be "completely paid-for." A one-year mandate delay would save the federal government $9 billion, according to the Congressional Budget Office, so that alone won't suffice. Conway said that "the specifics of the pay-for have not yet been finalized."
In recent months, there has been some hope that Congress will finally replace SGR with a more viable formula because the price tag has fallen dramatically from $300 billion, where it was in recent years. The American Medical Association, an influential physicians group, has been aggressively lobbying Congress for a permanent fix. But finding $138 billion in savings that can pass a Congress this divided remains a tall order, especially by the end of this month. Many believe short-term patches are inevitable for the foreseeable future.
The Republicans' latest strategy is actually a step away from bipartisan negotiations for a fix.
House Minority Whip Steny Hoyer (D-MD) warned that the Senate would reject a bill that chops the individual mandate, and said the GOP's approach makes it harder to fix the SGR problem in time. "Obviously there hasn't been agreement [to roll back the mandate] in the past," he said, "and if we use that as a pay-for, it seems to me it puts at risk meeting the March 31 deadline."