Obamacare is now expected to take 2.3 million full-time workers out of the labor market through 2021 while insuring 2 million fewer Americans in 2014 than expected, the Congressional Budget Office said Tuesday.
The overall result of Affordable Care Act regulation will be a 1.5 percent to 2 percent reduction in the numbers of hours worked between 2017 and 2024, the CBO concluded in its 2014 Budget and Economic Outlook.
The updated numbers are nearly triple the 2011 estimate, which found that Obamacare would push just 800,000 people would leave the work force.
The reduction will largely be due to people opting out of work. The biggest culprit remains premium subsidies, a significant transfer of wealth to those making under 400 percent of the federal poverty level. Because the amount of subsidies and eligibility decline as income rises, the structure makes work “less attractive,” CBO analysts wrote.
CBO also ratcheted down expectations for Medicaid and Obamacare private insurance enrollment. In 2013, the CBO predicted 9 million consumers would sign up for Medicaid or expansions, but now analysts believe just 8 million will sign up.
Unsurprisingly, the CBO shaved one million off its private insurance enrollment estimates. The CBO’s previous estimate that seven million Americans would need to sign up for the exchanges to be financially sustainable was repeated by the Obama administration as a measure of success for the exchanges. The nonpartisan agency now believes just six million Americans will enroll in coverage via Obamacare exchanges in 2014. Three million consumers have selected private plans on exchanges nationwide so far.
The budget agency also addressed Obamacare’s controversial risk corridors: payments to health insurance plans whose actual costs for medical claims on the exchanges are greater than expected. CBO projects that the risk corridors net result over three years (the provision expires in 2016) will be $8 billion in revenues for the federal government.
Meanwhile, the CBO expects the rising costs of health care to “intensify,” despite Obamacare proponents attributing 2012’s slower growth in health care costs to the program. Rising costs for standard federal health care programs in addition to Obamacare’s subsidies will “substantially boost” federal spending on health care relative to GDP, spurring the agency to warn that unless health care laws are changed or tax revenues hiked, debt will “rise sharply” by 2024.
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