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Old 02-05-2014, 09:11 AM   #1
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Hey! Get off my lawn

Interesting to get the Brits take on PPACA.

BBC News - 'Obamacare' will reduce US workforce, report finds

Quote:
President Barack Obama's health law will cut the US w*rkforce by the equivalent of more than two million w*rkers, budget analysts say.
...
Lower-income w*rkers will be hardest hit, limiting their hours to avoid losing federal subsidies.
...
The congressional analysts say there will be fewer w*rkers because healthcare subsidies would "reduce incentives to w*rk" and pose an "implicit tax on w*rking" for those returning to a job with health insurance.
Great. 2.3 million lay-abouts like me crowding the pubs, parks. beaches and shopping malls.
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Old 02-05-2014, 10:49 AM   #2
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Once we knew we would be guaranteed access to HI, we began making plans to pull the plug! Waiting for the SC decision was torture, but HI was the last piece of the puzzle.
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Old 02-05-2014, 10:53 AM   #3
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The mistake is having a cut off which makes for a cliff. I haven't thought about the mechanics, but surely there is a way to phase out the subsidy rather than have a sudden drop off to 0 for those on the wrong side of the line.
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Old 02-05-2014, 10:56 AM   #4
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It's interesting hearing the spin (from both sides) of this CBO report.

Readers of ER.org already knew there would be people engineering their income to avoid the subsidy cliff. Because heck, many of us are doing it (or planning to do it.)

I think one of the biggest benefits of the ACA is the elimination of "job lock" - folks can work less than full time, and get benefits outside the workplace. Folks can start a business full time, because they aren't tied to their former employers for benefits. This freedom of movement is going to result in at least some folks choosing to work less, or not at all. And the report reflects this.
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Old 02-05-2014, 11:02 AM   #5
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It's interesting hearing the spin (from both sides) of this CBO report.

Readers of ER.org already knew there would be people engineering their income to avoid the subsidy cliff. Because heck, many of us are doing it (or planning to do it.)

I think one of the biggest benefits of the ACA is the elimination of "job lock" - folks can work less than full time, and get benefits outside the workplace. Folks can start a business full time, because they aren't tied to their former employers for benefits. This freedom of movement is going to result in at least some folks choosing to work less, or not at all. And the report reflects this.
well said.
I have been looking to see what the commotion is about, and I can't find anything negative about this report, really. This just shows how HI has been an artificial influence on the market economy.
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Old 02-05-2014, 01:00 PM   #6
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Once we knew we would be guaranteed access to HI, we began making plans to pull the plug! Waiting for the SC decision was torture, but HI was the last piece of the puzzle.
Actually, many states in US already had laws guaranteeing access to HI prior to ACA. In fact, many states, inc mine, subsidized their hi-risk pools. Unfortunately, full (unsubsidized) ACA Marketplace premiums have turned out to be HIGHER than what many (not all) would have paid for comparable coverage in some of those HI pools.

IMHO- CBO report should have been issued years ago since it is not based on any significant new info. Obviously the features of ACA (or ANY real HC reform) will affect employment patterns, but that would be true of how gov't handles ANY industry making up ~17% of GDP. My concern going forward is the decrease in national productivity associated with the loss of those 2+ million jobs. Whether voluntary or not, fewer folks w#rking represents less national production. Japan has witnessed this with the aging of their population. Perhaps a big reason their stock market is trading at less than half what it was a quarter century ago.
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Old 02-05-2014, 01:11 PM   #7
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Actually, many states in US already had laws guaranteeing access to HI prior to ACA. In fact, many states, inc mine, subsidized their hi-risk pools. Unfortunately, full (unsubsidized) ACA Marketplace premiums have turned out to be HIGHER than what many (not all) would have paid for comparable coverage in some of those HI pools.
And many states, including mine, had un-subsidized hi-risk pools and the ACA premiums have turned out to be LOWER than comparable coverage in the hi-risk pools.
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Old 02-05-2014, 01:55 PM   #8
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I think it is important to understand that this is potentially 2 million people leaving the labor force, not neccesarily 2 million lost jobs.

We currently have about 10 million unemployed people in this country. These are people looking for work that can't find it. If any of those people can do the jobs that are opened up by these 2 million people who choose to leave the labor force, the job is not "lost", just transferred to a new worker.

This reduction in demand for jobs is only going to impact production dramatically if the person leaving the workforce is in a high demand field with low unemployment, or if the economy heats up to the point where we have a shortage of labor.

In a world in which one of our biggest problems is too many people vying for too few jobs, this potential reduction in the labor force is a big positive, not a big negative.

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My concern going forward is the decrease in national productivity associated with the loss of those 2+ million jobs. Whether voluntary or not, fewer folks w#rking represents less national production. Japan has witnessed this with the aging of their population. Perhaps a big reason their stock market is trading at less than half what it was a quarter century ago.
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Old 02-05-2014, 01:58 PM   #9
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This is just more evidence to me that we need to separate employment and health insurance coverage.
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Old 02-05-2014, 02:11 PM   #10
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I think it is important to understand that this is potentially 2 million people leaving the labor force, not neccesarily 2 million lost jobs.

We currently have about 10 million unemployed people in this country. These are people looking for work that can't find it. If any of those people can do the jobs that are opened up by these 2 million people who choose to leave the labor force, the job is not "lost", just transferred to a new worker.

This reduction in demand for jobs is only going to impact production dramatically if the person leaving the workforce is in a high demand field with low unemployment, or if the economy heats up to the point where we have a shortage of labor.

In a world in which one of our biggest problems is too many people vying for too few jobs, this potential reduction in the labor force is a big positive, not a big negative.
+1. Very well put. I was watching on C-Span today CBO Director Doug Elmendorf trying to explain your first point to the members of the House Budget Committee.
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Old 02-05-2014, 02:31 PM   #11
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Actually, many states in US already had laws guaranteeing access to HI prior to ACA. In fact, many states, inc mine, subsidized their hi-risk pools.
Alas, many states also cap the number of people who can enroll in these programs.
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Old 02-05-2014, 02:34 PM   #12
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So, we will see a decrease in full time job opportunites, but we should also see an increase in the total number of people employed. Since it will increase part-time employement, we will probably see an increase in the number of working poor.

The 30 hour limit is a problem with ACA and should be adjusted down to 20 if it is kept at all. Actually, we need to decouple health care from employment. That is the 2000 pound elephant that needs to be talked about.
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Old 02-05-2014, 03:16 PM   #13
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And many states, including mine, had un-subsidized hi-risk pools and the ACA premiums have turned out to be LOWER than comparable coverage in the hi-risk pools.
. That has been my experience, too. In the states with which I am familiar, the high risk pools have been quite expensive. I believe that fewer than half the states had those pools, too. They just weren't a substitute for community rating. As I've noted before, my BIL, who is perfectly healthy, was paying quite a high price for a high risk pool insurance due to a heart murmur. He has a successful small business, too, but now he qualifies for reasonably priced, UN-subsidized HI. The ACA has allowed my sister to quit her corporate job (she retired, then went back because of the cost of HI) and pursue her own business. My husband and I, being lazy (but rich!) slobs are happy doing nothing.
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Old 02-05-2014, 03:20 PM   #14
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Actually, I suspect that my mother will be one of the people who leaves the workforce because of the ACA. She would like to retire from her redtape-filled job, and has enough money to do so, except that she would have been unable to purchase insurance due to pre-existing conditions.

She now has the option to retire before 65. She has been writing in her spare time for a long time, and just recently got her first book published. I suspect that she will ramp up the writing in retirement.

Rest assured, I am confident that her employer will be able to fill her position, so the economy should not be harmed. It may actually result in greater economic output, if she is successful in writing more books.
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Old 02-05-2014, 04:37 PM   #15
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One of the best things about ACA is that it will free workers who are now glued to their current job due to medical needs. I personally know of several young people who are limiting their hours working for a corporation so that they can pursue their own business. They could not do this if they had to work 40 hours a week to get insurance (or even 30) . And I know of several folks who are retiring early because they no longer fear the loss of health insurance. IMHO, this should make for a healthier business and employment environment. My 2 cents. Time will tell.
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Old 02-05-2014, 05:03 PM   #16
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I don't see this as the 'Brit's take on PPACA' but as a pretty straightforward summary of the just released CBO report. There were also a couple of articles in the WSJ today on the same subject, and I'm sure in every other major newspaper.

Whatever it is it certainly underscores just how wide ranging the law's effects will be.
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Old 02-05-2014, 05:35 PM   #17
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Apparently the media has been reporting this as 2M lost jobs, not 2M workers choosing to leave their jobs. A big difference, but perhaps hard for some to understand at first.
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Old 02-05-2014, 05:38 PM   #18
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Whatever it is it certainly underscores just how wide ranging the law's effects will be.
I recall that Joe Biden himself said it was a BFD.
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Old 02-05-2014, 05:44 PM   #19
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Increased labor market efficiency (rather than having people locked into a job for HI) would be good for productivity and the economy.

The efficiency of the labor market is also enhanced when market distortions are reduced/eliminated. The ACA leaves some of these distortions unaddressed (e.g. untaxed employer-provided insurance), decreases some (by de-linking insurance from employment for PT workers), and increases other labor market distortions (by requiring employer-provided insurance above this arbitrary 30 hour/week level, by providing subsidies that function as a very heavy tax at a certain income level, etc). It's fairly hard to say whether the net effect on labor market efficiency is positive or negative.

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In a world in which one of our biggest problems is too many people vying for too few jobs, this potential reduction in the labor force is a big positive, not a big negative.
Despite all the research and experience to the contrary, the old "lump of labor" chestnut endures. There's no fixed number of jobs and no fixed number of job seekers--each number responds to the market.

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The 30 hour limit is a problem with ACA and should be adjusted down to 20 if it is kept at all. Actually, we need to decouple health care from employment.
Isn't this contradictory? You say that linking employment to health insurance is a bad idea, but you propose doing it to more jobs/workers? The lower we put the cutoff, the worse the problem becomes. Jim can now work 2 jobs of 25 hours per week each and get his insurance on the exchanges, but if the cutoff were 20 hours he'd be dealing with 3 employers if he wanted to work the same number of hours. It becomes a full-employment plan for accountants and HR types, and it makes Jim unavailable to work more than 20 hours at the job he likes the most (or which pays best = his highest/best use). Those who favor delinking employment from health insurance would want the hourly limit raised--maybe the employer would have to buy insurance for workers putting in more than 100 hours/wk.
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Old 02-05-2014, 08:34 PM   #20
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I think it is important to understand that this is potentially 2 million people leaving the labor force, not neccesarily 2 million lost jobs.
Quoting from the CBO report-

"Although CBO projects that total employment (and compensation) will increase over the coming decade, that increase will be smaller than it would have been in the absence of the ACA." (emphasis added)


So whether this relative decline in employment is voluntary (choosing fewer hrs,ER) or not (businesses limiting hiring or hrs due to HI mandates), with ACA the CBO report still projects fewer total jobs (smaller absolute increase).

IMHO- CBO's logic here is sound from both human nature & macroeconomic viewpoints. Incentivize w@rking less & folks tend to w@rk less. More folks w@rking less means lower national productivity (total output per unit population). Lower productivity eventually leads to slower economic growth, inc fewer jobs than if growth were more robust.

Actual CBO's report is here-
http://www.cbo.gov/sites/default/fil...utlook2014.pdf


HOWEVER- it's prob not worth losing sleep over specifics of CBO's latest missive, since their ACA analyses have not been the model of consistency (e.g. current est of pop remaining uninsured post-ACA implementation (FY2016) now 40+% higher than est given Congress just before ACA passed)
http://cbo.gov/sites/default/files/c...tion_noted.pdf
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