http://www.politico.com/story/2014/02/obamacare-first-year-enrollment-numbers-103098.html
Obamacare and jobs: CBO adds fuel to fire
By DAVID NATHER and JASON MILLMAN | 2/4/14 11:41 AM EST Updated: 2/4/14 6:51 PM EST
The Republicans just got a big gift from the Congressional Budget Office: It’s going to be a lot easier for them to call Obamacare a “job killer.”
That’s because the budget office’s new economic report says the health care law will cause Americans to work fewer hours – enough to be the equivalent of 2 million fewer jobs in 2017.
The latest number is nearly three times as high as the budget office’s previous prediction, and it’s supposed to rise in later years to the equivalent of 2.5 million jobs in 2024.
(Also on POLITICO: Mass. GOP aims at Obamacare)
There’s a lot more fine print about what those numbers really mean, and whether the jobs were “lost.” In fact, CBO said it’s in large part about the number of hours people choose to work, not actual job losses. But what matters politically is how the numbers look in attack ads. And in this election year, “2 million lost jobs” is a Republican ad maker’s dream.
The projection will put the White House, and especially red-state Democrats, in an even more awkward position heading into November. Until now, they’ve mostly had to worry about stories of canceled health plans and, of course, the botched website rollout. Now they’ll need to figure out how to counter, or at least explain, the new CBO job figures.
(Also on POLITICO: Spotlight on surgeon general pick)
The White House is already taking a crack at it. The report doesn’t actually say businesses will be forced to reduce employment, said the administration, which noted that the report also states there is “no compelling evidence that part-time employment has increased” because of the Affordable Care Act.
Instead, the administration said Tuesday, the health care law will allow people to choose to work less because they’ll be able to get health insurance.
Under Obamacare, “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,” White House press secretary Jay Carney said in a statement.
“It’s only a GOP talking point if you fail to point out the facts,” said Adam Jentleson, a spokesman for Senate Majority Leader Harry Reid. “The report is saying [the Affordable Care Act] reduces job lock. To portray these as lost jobs or anything like that would be inaccurate.” Job lock is when people feel they have to stay in a job for the health benefits.
(See POLITICO's full Obamacare coverage)
Still, Republicans wasted no time blasting out multiple emails and statements about job loss, “pink slips” and the new CBO estimates. House Speaker John Boehner’s office gave reporters a quick heads up and other Republicans piled on fast.
“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 in a statement. “The middle class is getting squeezed in this economy, and this CBO report confirms that ObamaCare is making it worse.”
House Majority Whip Kevin McCarthy declared that the new report “undercuts any claim by the president that his policies are helping to expand middle-class opportunity and growth – it’s doing the exact opposite.”
(IN 90 SECONDS: Democrats excited about health care again)
And in the Senate, Minority Leader Mitch McConnell called the job numbers “not surprising,” adding, “The tragedy is once again you’ve got an estimate from CBO that, when all’s said and done, we still have 30 million uninsured.”
The news quickly overshadowed two other important updates about how the law is doing. The budget office lowered its estimates of first-year enrollment in Obamacare’s health exchanges to 6 million, down from the 7 million it had predicted before. That’s a drop, but it’s not the cataclysm many had expected during the worst early months of the website debacle.
And in a significant victory for the Obama administration, the budget office now says the law’s “risk corridors” program — the part Republicans are calling a “bailout for insurers” — would actually save $8 billion over the long term.
The reason: The program is supposed to pay health insurers that have higher-than-expected costs, but the money flows both ways. So if insurers’ costs are lower than expected, the health plans are supposed to pay the government.
As a result, the CBO now projects that the program will collect more payments from insurers than it gives them, saving the government money between 2015 and 2017. The program is a temporary one that only lasts for three years.
House Minority Leader Nancy Pelosi’s office also pointed out that the CBO lowered its estimate of average premiums for exchange health plans by 15 percent this year.
But it was the jobs number that became the news of the day — and forced the White House into full rapid-response mode.
Republicans have argued all along that the health care law will discourage businesses from hiring workers, or at least lead them to cut the hours of part-time workers so they don’t have to provide health coverage when the employer mandate kicks in next year.
That’s not exactly what the report says. It says total employment will keep increasing over the next decade – though not as much as it would have without the Affordable Care Act. And it says the decrease will be a mix of people not working at all and other people working fewer hours – in a lot of cases, voluntarily.
But that will be a hard sell if the attack ads focus on “2 million lost jobs.” Don’t look for them to explain more in any fine print.
Instead, the Obama administration will have to hope the “people can work less” line will suffice as a snappy comeback.
“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,” Carney said in the statement. For good measure, he added that “the Republican plan to repeal the ACA would strip those hard-working Americans of that opportunity.”
The enrollment news, meanwhile, suggests that the Obama administration likely won’t hit its initial target, but it also means the CBO believes the early website failures won’t ruin the first-year effort completely.
The budget previously estimated 7 million people would sign up through state- and federal-run exchanges in 2014, but “significant technical problems encountered in the initial phases of implementing the [Affordable Care Act]” prompted the revision Tuesday.
At least 3 million people have signed up for coverage as of two weeks ago, the Obama administration announced. However, the administration hasn’t released information about how many have paid for their coverage — the final step in completing enrollment. Those numbers don’t include millions more in Medicaid.
The CBO’s budget outlook predicts a late enrollment surge in the next couple of months. March 31 is the 2014 enrollment deadline to avoid the law’s individual mandate penalty for going without coverage.
The CBO projected that the law’s largest effects on the work force wouldn’t start until after 2016, and they would be felt the most among lower-wage workers.
Obamacare’s employer penalty, which was delayed until 2015, will take some of the blame for the workforce reduction, the CBO said. It said businesses with at least 50 full-time employees may cut back or limit full-time staffing to avoid the penalty for not providing health insurance meeting minimum standards.
The availability of subsidies for part-time workers will also encourage some people to avoid seeking full-time work, the CBO said, citing an “implicit tax” on those workers if they go back to a job with health insurance. The CBO also noted a “relatively modest” reduced incentive to work in states that expanded Medicaid eligibility, but only among “a relatively small segment of the population.”
The CBO said it nearly tripled its employment estimate from four years ago after reviewing new research about ways Obamacare affects labor.
In addition, CBO and the Joint Tax Committee predicted about 1.5 million will stay on health plans that were supposed to have been cancelled until the Obama administration in November they could still be sold, even if they don’t meet the new benefit rules. More than 500,000 people will still be on the policies into 2015 because they can be renewed up until October, the CBO and committee projected.
Obamacare and jobs: CBO adds fuel to fire
By DAVID NATHER and JASON MILLMAN | 2/4/14 11:41 AM EST Updated: 2/4/14 6:51 PM EST
The Republicans just got a big gift from the Congressional Budget Office: It’s going to be a lot easier for them to call Obamacare a “job killer.”
That’s because the budget office’s new economic report says the health care law will cause Americans to work fewer hours – enough to be the equivalent of 2 million fewer jobs in 2017.
The latest number is nearly three times as high as the budget office’s previous prediction, and it’s supposed to rise in later years to the equivalent of 2.5 million jobs in 2024.
(Also on POLITICO: Mass. GOP aims at Obamacare)
There’s a lot more fine print about what those numbers really mean, and whether the jobs were “lost.” In fact, CBO said it’s in large part about the number of hours people choose to work, not actual job losses. But what matters politically is how the numbers look in attack ads. And in this election year, “2 million lost jobs” is a Republican ad maker’s dream.
The projection will put the White House, and especially red-state Democrats, in an even more awkward position heading into November. Until now, they’ve mostly had to worry about stories of canceled health plans and, of course, the botched website rollout. Now they’ll need to figure out how to counter, or at least explain, the new CBO job figures.
(Also on POLITICO: Spotlight on surgeon general pick)
The White House is already taking a crack at it. The report doesn’t actually say businesses will be forced to reduce employment, said the administration, which noted that the report also states there is “no compelling evidence that part-time employment has increased” because of the Affordable Care Act.
Instead, the administration said Tuesday, the health care law will allow people to choose to work less because they’ll be able to get health insurance.
Under Obamacare, “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,” White House press secretary Jay Carney said in a statement.
“It’s only a GOP talking point if you fail to point out the facts,” said Adam Jentleson, a spokesman for Senate Majority Leader Harry Reid. “The report is saying [the Affordable Care Act] reduces job lock. To portray these as lost jobs or anything like that would be inaccurate.” Job lock is when people feel they have to stay in a job for the health benefits.
(See POLITICO's full Obamacare coverage)
Still, Republicans wasted no time blasting out multiple emails and statements about job loss, “pink slips” and the new CBO estimates. House Speaker John Boehner’s office gave reporters a quick heads up and other Republicans piled on fast.
“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 in a statement. “The middle class is getting squeezed in this economy, and this CBO report confirms that ObamaCare is making it worse.”
House Majority Whip Kevin McCarthy declared that the new report “undercuts any claim by the president that his policies are helping to expand middle-class opportunity and growth – it’s doing the exact opposite.”
(IN 90 SECONDS: Democrats excited about health care again)
And in the Senate, Minority Leader Mitch McConnell called the job numbers “not surprising,” adding, “The tragedy is once again you’ve got an estimate from CBO that, when all’s said and done, we still have 30 million uninsured.”
The news quickly overshadowed two other important updates about how the law is doing. The budget office lowered its estimates of first-year enrollment in Obamacare’s health exchanges to 6 million, down from the 7 million it had predicted before. That’s a drop, but it’s not the cataclysm many had expected during the worst early months of the website debacle.
And in a significant victory for the Obama administration, the budget office now says the law’s “risk corridors” program — the part Republicans are calling a “bailout for insurers” — would actually save $8 billion over the long term.
The reason: The program is supposed to pay health insurers that have higher-than-expected costs, but the money flows both ways. So if insurers’ costs are lower than expected, the health plans are supposed to pay the government.
As a result, the CBO now projects that the program will collect more payments from insurers than it gives them, saving the government money between 2015 and 2017. The program is a temporary one that only lasts for three years.
House Minority Leader Nancy Pelosi’s office also pointed out that the CBO lowered its estimate of average premiums for exchange health plans by 15 percent this year.
But it was the jobs number that became the news of the day — and forced the White House into full rapid-response mode.
Republicans have argued all along that the health care law will discourage businesses from hiring workers, or at least lead them to cut the hours of part-time workers so they don’t have to provide health coverage when the employer mandate kicks in next year.
That’s not exactly what the report says. It says total employment will keep increasing over the next decade – though not as much as it would have without the Affordable Care Act. And it says the decrease will be a mix of people not working at all and other people working fewer hours – in a lot of cases, voluntarily.
But that will be a hard sell if the attack ads focus on “2 million lost jobs.” Don’t look for them to explain more in any fine print.
Instead, the Obama administration will have to hope the “people can work less” line will suffice as a snappy comeback.
“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,” Carney said in the statement. For good measure, he added that “the Republican plan to repeal the ACA would strip those hard-working Americans of that opportunity.”
The enrollment news, meanwhile, suggests that the Obama administration likely won’t hit its initial target, but it also means the CBO believes the early website failures won’t ruin the first-year effort completely.
The budget previously estimated 7 million people would sign up through state- and federal-run exchanges in 2014, but “significant technical problems encountered in the initial phases of implementing the [Affordable Care Act]” prompted the revision Tuesday.
At least 3 million people have signed up for coverage as of two weeks ago, the Obama administration announced. However, the administration hasn’t released information about how many have paid for their coverage — the final step in completing enrollment. Those numbers don’t include millions more in Medicaid.
The CBO’s budget outlook predicts a late enrollment surge in the next couple of months. March 31 is the 2014 enrollment deadline to avoid the law’s individual mandate penalty for going without coverage.
The CBO projected that the law’s largest effects on the work force wouldn’t start until after 2016, and they would be felt the most among lower-wage workers.
Obamacare’s employer penalty, which was delayed until 2015, will take some of the blame for the workforce reduction, the CBO said. It said businesses with at least 50 full-time employees may cut back or limit full-time staffing to avoid the penalty for not providing health insurance meeting minimum standards.
The availability of subsidies for part-time workers will also encourage some people to avoid seeking full-time work, the CBO said, citing an “implicit tax” on those workers if they go back to a job with health insurance. The CBO also noted a “relatively modest” reduced incentive to work in states that expanded Medicaid eligibility, but only among “a relatively small segment of the population.”
The CBO said it nearly tripled its employment estimate from four years ago after reviewing new research about ways Obamacare affects labor.
In addition, CBO and the Joint Tax Committee predicted about 1.5 million will stay on health plans that were supposed to have been cancelled until the Obama administration in November they could still be sold, even if they don’t meet the new benefit rules. More than 500,000 people will still be on the policies into 2015 because they can be renewed up until October, the CBO and committee projected.
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