The Congressional Budget Office says Obamacare will take people out of the labor force — and the law’s supporters say that’s a good thing.
“Yesterday, the CBO projected that by 2021, the Affordable Care Act will enable more than 2 million workers to escape ‘job-lock’ — the situation where workers remain tied to employers for access to health insurance benefits,” House Minority Leader Nancy Pelosi crowed in a press release. “The GOP seems to have forgotten that ending ‘job-lock’ has been an avowed Republican goal for years — even a highlight in the Republican Sen. John McCain’s 2008 presidential race.”
Washington Post fact-checker Glenn Kessler piled on as well: “Look at it this way: If someone says they decided to leave their job for personal reasons, most people would not say they ‘lost’ their jobs. They simply decided not to work.”
But the CBO report isn’t about “job-lock.” The numbers demonstrate that the equivalent of over 2 million full-time employees will be better off financially if they quit work entirely — not a particular job — in order to get more taxpayer subsidies for health care.
Most of that effect, the CBO reported, will be full-time employees moving to part-time work only because taxpayer subsidies will amount to more than the difference in pay.
In simpler terms, people will be discouraged from staying in jobs they’ve chosen because they’ll be paid more to be unemployed or underemployed. In the end, there will be a growing population of Americans who will receive a larger amount of public benefits provided by a shrinking share of working Americans.
“Job-lock” itself is a different problem. Instead of effectively paying people to work less, as Obamacare does, conservative proposals would end federal preferences for employer-based insurance, allowing Americans to take insurance with them from job to job. People would not be stuck with a specific employer because they want to stay insured.
Conservative health policy heavyweights James Capretta and Tom Miller have repeatedly argued for a movement to what they call portable insurance. The tax code ties gives those with employer-based coverage a break, making it harder for Americans to switch jobs as they please.
“If households, not firms, chose and controlled their own insurance plans, people would no longer face the risks that come with changing coverage based on new employment arrangements,” the scholars wrote just after Obamacare was passed in 2010. “By carrying the same insurance plan from one job to the next (or even through periods with no job at all), individuals would keep their coverage even as their health status changed.”
McCain’s 2008 presidential campaign also floated the idea of equalizing tax treatment for employer-based health insurance, as Pelosi recalled. McCain’s version extended equal tax breaks to those with health coverage that isn’t tied to an employer; other proposals could end tax breaks altogether.
Obama opposed these proposals, saying, “Senator McCain would pay for his plan, in part, by taxing your health care benefits for the first time in history.”
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