Many people assumed that the problems associated with the implementation of the Affordable Care Act (ACA) were just growing pains that would be fixed over time. From the website glitches to the lack of security to the cancellation of millions of insurance policies, the ACA has been plagued with troubles since its inception.
Another Major Problem With the ACA: Job Loss
Now, America is looking at yet another problem with the Affordable Care Act: it’s resulting in the loss of millions of jobs. While many industry experts predicted this before the Act was even signed, the Obama administration chose to deny the probability of loss of employment and instead forged ahead with their ill-planned health care reform mandates.
Large companies that are required to provide comprehensive (and expensive) group coverage for full-time employees will have to cut jobs. Many employers will make changes in their employment policies to accommodate the higher expense of providing insurance—which means fewer full-time positions. The employer mandate deadline was fortunately extended, but the mandate won’t be postponed indefinitely.
Because businesses with over 50 employees are required to provide health insurance, many small companies are making efforts to reduce the numbers of employees on their payroll.
In addition to employers decreasing their work force and cutting hours, projections by the Congressional Budget Office suggest that some workers may willingly choose to drop out of the work force or only work part-time. Over time, the lack of people willing to work will force companies to dissolve over 2 million full-time positions.
Implications of Providing a Disincentive to Work
One of the reasons more people may opt out of working is simple—insurance premium subsidies. Health care subsidies can range from as little as a few hundred dollars to upwards of $10,000 or more, far offsetting the income an individual would make working a low-paying or part-time job and ultimately encouraging workers to work less or not at all. Additionally, in the states where the Medicaid expansion was approved, an even greater number of people qualify for free health care under Medicaid.
The loss of 2 million workers has a direct negative impact on our country’s economy.
Sebelius Hides Her Head in the Sand, Again
Job loss is one of the potential issues that cropped up when the Affordable Care Act was merely an idea, yet it has constantly been ignored by the Obama administration and the Department of Health and Human Services (HHS). In fact, HHS Secretary Kathleen Sebelius is sticking to the party line that “There is absolutely no evidence—and every economist will tell you this—that there is any job loss related to the Affordable Care Act.”
Despite her insistence to the contrary, a nonpartisan CBO report states that instead of their 2010 prediction that the ACA would result in about 650,000 cut jobs, the new prediction is now 2 million lost jobs. This is a much larger number than even the most skeptical experts could have imagined.
Unemployment has a devastating effect—on individuals, and on our culture in general. Health care access and affordability is a serious problem, but the solutions are not top-down directives that will raise costs, impede competition, and depress the economy. Instead, we need policies that increase price transparency, choice and competition.
What Do You Think?
What do you think about the loss of jobs associated with the Affordable Care Act? Is this something that causes you concern? I’d be curious to know. Share your thoughts with me in the comments section below.
Wiley Long is President of HSA for America, and a passionate advocate for consumer-based solutions that will improve price transparency and lower health insurance and medical costs for people purchasing individual and family health insurance plans.