The Truth Behind ObamaCare And Jobs
It’s been one of the goals of the Affordable Care Act when President Obama signed it in 2010, but with all the debate since then over the healthcare law and its pluses and minuses, one benefit hasn’t gotten a lot of attention—job lock. That all changed in early February when the Congressional Budge Office released a report that says there will be the equivalent of 2.5 million fewer full-time workers by 2024 because of ObamaCare. Republicans ran with the theme that the ACA is a job killer and initial media headlines and reports spread a similar message that healthcare reform would “cost jobs.”
That’s not what the CBO report says at all, actually, and the media and GOP radically try to change the narrative on that report. The message of some Republicans, instead, was how ObamaCare would make people not want to work and therefore create a lazier and more entitlement-driven nation as has been argued about social programs.
The message that media gravitated to and what healthcare experts have argued since the law’s passage is that the Affordable Care Act will address the long-time problem of job lock, especially among those older than 50. Some in that group prior to reaching Medicare eligibility at 65 wanted to retire but don’t want to risk going into the open market for their insurance where it could be costly, cancelled at any time or not even be available.
Others preferred to work from home as a consultant or contract worker for their company but for the same reason didn’t want to give up their employer-based insurance. Three out of five full-time workers get their insurance through their employers. And still others wanted to start their own business but also faced the same concerns since they weren’t Medicare eligible.
Past surveys have shown more than 25 percent of currently employed workers say they won’t retire or change jobs because of concerns over insurance. One survey revealed that business ownership rates rise for men right before and after they’re eligible for Medicare. The shackles have now been removed and the impact will be “significant,” many analysts say.
“You’re going to see people do things like starting new businesses that weren’t a possibility before. It allows for innovation in the economy that we haven’t had and allows for worker mobility that we haven’t had,” says Deborah Chollet, a senior fellow at Mathematica Policy Research in Washington, D.C. “Most economists, if they’re being honest, will tell you that makes people happier, it improves welfare and it might in fact improve economic growth if there’s more innovation.”
Chollet says she expects the impact to show up in the 2014 numbers and grow even more in 2015 as those 50+ feel more confident about the Affordable Care Act and what it enables them to do in their lives.
Many will choose to be self-employed, accelerating the trend in the last two decades of a shift to contract workers, Chollet says. Rather than face a two-hour commute, many older workers will prefer to work from home instead. Others would start their own business or team up with family members, including children, and launch a company, she says. Some will start new careers they’ve never contemplated.
“It will allow people to make more sensible decisions for themselves and their families than they’ve been able to make,” Chollet says. “It also opens up opportunities for older children to care for their elderly parents in a more flexible work environment, and that’s becoming a huge issue.”
How the Affordable Care Act is helping eliminate job lock is that insurance companies won’t be able to turn someone down for a pre-existing condition that many face, especially when they reach 50. Previously, insurance companies could charge older customers six times what they charge their youngest ones, but the Affordable Care Act has reduced that to a three to one ratio. Finally, subsidies provided under the ObamaCare help people pay the cost of insurance and those workers will be able to obtain them more readily since their incomes, at least initially, will be lower after they leave their job.
Even though the deadline to enroll in ObamaCare for those without employer-based insurance or already insured privately insured or through Medicaid is March 31, there’s no rush to leave your job. Open enrollment for the Affordable Care Act won’t launch until November, but for those who leave their job after March 31 and until open enrollment begins, can still sign up.
After the initial reporting on the CBO report about the Affordable Care Act cutting jobs, Chollet said the message is getting out how it will help with job lock. The arguments about healthcare reform causing people to no longer work even got debunked at a White House press briefing in a humorous manner that made the point about the logic used against the law.
“The White House response was quite funny: If we didn’t have Medicare, people would be working until age 90,” Chollet says.
Now, people can base their career decisions on something other than worrying about getting dependable and affordable health insurance.