“Something To Celebrate”: Affordable Care Act Gives Workers Freedom, Republicans Enraged
Since I wrote about postal banking this morning, I’ve decided to continue the day’s shameless, lowest-common-denominator clickbaiting by talking about a new Congressional Budget Office report and the Affordable Care Act. Hang on to your hats.
With all the hype of a new Beyonce album, the CBO dropped its latest report on government finances and other related topics, which includes the news that the deficit has dropped to its lowest level since Barack Obama took office. This may prove inconvenient for Republicans still invested in fomenting deficit panic, but they’ll be helped by the fact that most Americans actually believe the deficit has gone up in the Obama years. According to a new poll from the Huffington Post, not only do 54 percent of people think so, but 85 percent (!) of Republicans think so.
In any case, the part of the CBO’s report that’s getting more attention is their projection that as a result of the ACA, the labor force will be reduced by 2 million in 2017, rising to 2.5 million in 2024. Unsurprisingly, Republicans rushed to the trumpets to shout that “Obamacare is going to cost 2.5 million jobs!!!” even though that’s not actually what the CBO said. Even news organizations who ought to know better made the mistake; earlier today, a headline at the Washington Post‘s web site read, “CBO: Health Law to Mean 2 Million Fewer Jobs” (it has since been corrected to read, “CBO: Health Law to Mean 2 Million Fewer Workers”).
The important thing to understand about the reduction in the labor force is that this is exactly what was supposed to happen. When you eliminate “job lock,” where people who’d like to leave their jobs can’t because if they do they won’t have health insurance, a certain number of people are going to take advantage of their newfound mobility. In some cases you might be able to construe it as a loss to the economy, say if a productive full-time worker cuts back to part time because she can. But in many cases it’s something to celebrate: an American exercising their freedom.
Imagine, for instance, a couple. The wife is a lawyer in private practice; the husband is an accountant at a large firm. Since she’s a cancer survivor, he has stayed at his job for the health insurance it provides, because if he didn’t they wouldn’t have been able to get coverage, what with her pre-existing condition. But now, he can make a different choice. And it happens that her business is doing pretty well, and he’d rather stay home with the kids and work on his novel than be an accountant. So he has the freedom to quit his job, and they can still get covered. When he does so, he’s no longer in the labor force. But that doesn’t mean there’s one fewer job in the economy. His firm will just hire someone else.
That isn’t to say there will be zero net loss to the economy; without his income, the couple will probably spend less. But their children may also grow up happier and more well-adjusted, and who knows, he might write the next great young-adult dystopian fight-to-the-death trilogy with the extra time he has between 9 and 3 every day. These are good things.
That’s just one kind of person who leaves the labor force because of the ACA; there will also be lots of people who leave jobs to start their own businesses, and some who decide to retire early because now they can. If people are making those decisions freely—just like people have the freedom to do in every other advanced economy in the world—it would be crazy to think of it as something to be lamented.
By: Paul Waldman, Contributing Editor, The American Prospect, February 4, 2014
“Willful Stupidity In The Obamacare Debate”: Fat Chance, Republicans Are Not Looking For Enlightenment
One of the best arguments for health-insurance reform is that our traditional employer-based system often locked people into jobs they wanted to leave but couldn’t because they feared they wouldn’t be able to get affordable coverage elsewhere.
This worry was pronounced for people with preexisting conditions, but it was not limited to them. Consider families with young children in which one parent would like to get out of the formal labor market for a while to take care of the kids. In the old system, the choices of such couples were constrained if only one of the two received employer-provided family coverage.
Or ponder the fate of a 64-year-old with a condition that leaves her in great pain. She has the savings to retire but can’t exercise this option until she is eligible for Medicare. Is it a good thing to force her to stay in her job? Is it bad to open her job to someone else?
By broadening access to health insurance, the Affordable Care Act (ACA) ends the tyranny of “job lock,” which is what the much-misrepresented Congressional Budget Office (CBO) study of the law released Tuesday shows. The new law increases both personal autonomy and market rationality by ending the distortions in behavior the old arrangements were creating.
But that’s not how the study has been interpreted, particularly by enemies of the law. Typical was a tweet from the National Republican Congressional Committee, declaring that “#ObamaCare is hurting the economy, will cost 2.5 millions [sic] jobs.”
Glenn Kessler, The Post’s intrepid fact checker, replied firmly: “No, CBO did not say Obamacare will kill 2 million jobs.” What the report said, as the Wall Street Journal accurately summarized it, is that the law “will reduce the total number of hours Americans work by the equivalent of 2.3 million full-time jobs.”
Oh my God, say opponents of the ACA, here is the government encouraging sloth! That’s true only if you wish to take away the choices the law gives that 64-year-old or to those parents looking for more time to care for their children. Many on the right love family values until they are taken seriously enough to involve giving parents/workers more control over their lives.
And it’s sometimes an economic benefit when some share of the labor force reduces hours or stops working altogether. At a time of elevated unemployment, others will take their place. The CBO was careful to underscore — the CBO is always careful — that “if some people seek to work less, other applicants will be readily available to fill those positions and the overall effect on employment will be muted.”
The CBO did point to an inevitable problem in how the ACA’s subsidies for buying health insurance operate. As your income rises, your subsidy goes down and eventually disappears. This is, as the CBO notes, a kind of “tax.” The report says that if the “subsidies are phased out with rising income in order to limit their total costs, the phaseout effectively raises people’s marginal tax rates (the tax rates applying to their last dollar of income), thus discouraging work.”
But the answer to this is either to make the law’s subsidies more generous — which the ACA’s detractors would oppose because, as the CBO suggests, doing so would cost more than the current law — or to guarantee everyone health insurance, single-payer style, so there would be no “phaseout” and no “marginal tax rates.” I could go with this, but I doubt many of the ACA’s critics would.
The rest of the CBO report contained much good news for Obamacare: Insurance premiums under the law are 15 percent lower than originally forecast, “the slowdown in Medicare cost growth” is “broad and persistent” and enrollments will catch up over time to where they would have been absent Obamacare’s troubled rollout.
The reaction to the CBO study is an example of how willfully stupid — there’s no other word — the debate over Obamacare has become. Opponents don’t look to a painstaking analysis for enlightenment. They twist its findings and turn them into dishonest slogans. Too often, the media go along by highlighting the study’s political impact rather than focusing on what it actually says. My bet is that citizens are smarter than this. They will ignore the noise and judge Obamacare by how it works.
By: E. J. Dionne, Jr., Opinion Writer, The Washington Post, February 5, 2014
“Obamacare Is Not A Job Killer”: How Critics Are Misreading A New Government Report
The Congressional Budget Office today released the latest update of its projections for the economy and the budget, including Obamacare. And a fair reading would be that not a ton has changed since last time. CBO now expects the law will lead to 25 million people getting health insurance, while some 31 million people will remain uninsured. It will require a lot of new government spending but, because of offsetting revenue and cuts to other programs, it will actually reduce the deficit.
But CBO revised one finding and, all day long, critics have been seizing on the revision as proof that the law is a boondoggle.
The real story, as usual, is a lot more complicated.
The projection is about how the Affordable Care Act will affect labor output—that is, the number of hours Americans work every year. From the get-go, CBO assumed that Obamacare would slightly reduce labor output, relative to what it might have been without the law in place. Why? The CBO gave a bunch of different reasons.
For one thing, CBO reasoned, the financial assistance Obamacare provides depends on income. The more money you make, the less assistance you get. CBO argued that this would discourage some workers from putting in more hours, since the reward for working harder would be more income but less assistance on health insurance. In addition, CBO noted, historically some people have taken or held on to jobs exclusively to get health insurance. Obamacare makes it possible to get coverage without a job. As a result, CBO predicted, some of these people would stop working—or, at least, work fewer hours.
These weren’t the only ways that Obamacare will affect jobs, according to the CBO. And sometimes Obamacare will lead to people working more hours—for example, by giving people with chronic medical problems more freedom to switch jobs or start their own firms.
Overall, the CBO had said previously, Obamacare’s net effect would be a reduction in total labor compensation of about 0.5 percent. Now, citing new research on the effects of taxes, CBO is predicting that the net effect will eventually be twice as large—a full 1 percent reduction in compensation, or the rough equivalent of what we’d expect if two million fewer people were in full-time jobs.
That sounds like a big deal—and Obamacare critics certainly treated it like one. Here’s the conservative publication Newsmax: “Simply put, the new analysis from the nonpartisan agency suggests the 2010 Affordable Care Act is driving businesses and people to choose government-sponsored benefits rather than work.” Here’s Republican Congressman Tom Price: “This independent analysis by the Congressional Budget Office confirms that Obamacare will destroy economic opportunity and with it financial security for many American families.” And here’s a spokesman for the National Republican Congressional Committee: “There is no way to spin this. Because of #ObamaCare, there will be 2.5 million less jobs in our economy.” (If you want more quotes, Glenn Kessler and Greg Sargent of the Washington Post have nice roundups—and some good analysis of their own.)
But CBO didn’t actually say Obamacare would lead to 2 million fewer jobs. It said that Obamacare would lead to the “equivalent” of 2 million fewer jobs. In reality, CBO expects a much larger group of people to reduce their hours by a much smaller amount. Only a relative few will stop working altogether.
More important, CBO says, most of the people working fewer hours will be choosing to do so. And that’s a very different story from the one Obamacare critics are telling. Some of the people cutting back hours will be working parents who decide they can afford to put in a little less time with their co-workers and a little more time with their kids. Some will be early sixty-somethings who will retire before they reach 65, rather than clinging to low-paying jobs just to get health benefits. “This is what we want in a fair society,” says Jonathan Gruber, the MIT economist and Obamacare architect. “We don’t want to enslave the old and sick to their jobs out of some sense of meanness. If they are dying to quit/retire, then let them. That’s a good thing, not a bad thing.”
Of course, some able-bodied Americans will cut back on hours for reasons that conservatives, in particular, might not like. To put it crudely, they’ll work fewer hours simply simply because they don’t feel like working so hard. But whether or not that’s so problematic, it’s also the inevitable by-product of any program that makes assistance conditional on income. The Earned Income Tax Credit works that way. So do food stamps and Medicaid.
And so, by the way, would the new health care proposal from three Republican senators, which makes subsidies available to people with incomes at 299 percent of the poverty line but not those with incomes at 300 percent. The only question with programs like these is how big the disincentive to work is—and whom, exactly, it affects. The only alternatives are to give help to everybody (which requires much more government spending) or to give help to nobody (which leaves many more people struggling).
Ironically, the CBO report included two other findings that should, if anything, make most people more optimistic about Obamacare’s future. First, the CBO found that the law will reduce the deficit by a little more than initial projections suggested. Second, it found that the now-infamous “risk corridor” program, in which government and insurers share gains and losses, will result in net payments from insurers to the government, rather than the other way. (Jonathan Chait has the details on that drama.)
The change in projected deficits isn’t very large and the risk corridor prediction comes with more uncertainty than usual, so you wouldn’t want to bet a lot of money on either prediction coming true. But both findings call into more serious doubt two of the Republicans’ favorite talking points—that Obamacare will drive up the deficit and that, because of the risk corridor program, it’s a “taxpayer bailout” of insurers. As of today, those claims look even weaker than they did before.
Will Republicans stop making these arguments? Or will they at least acknowledge some uncertainty about them? Nope. And that’s a prediction in which you can feel very confident.
By: Jonathan Cohn, The New Republic, February 4, 2014
“When Women Have Options”: Obamacare, The Greatest Pro-Life Victory Ever
A new report finds that between 2008 and 2011, the abortion rate hit its lowest point since 1973, when Roe v. Wade declared access to the procedure a Constitutional right.
The rate fell 13 percent to 16.9 per 1,000 women in 2011, down from its peak of 29.3 per 1,000 in 1981.
While conservatives want to claim credit for the decline with onerous restrictions on a woman’s right to choose, the availability of contraception and family planning deserve most of the credit, according to the Guttmacher Institute’s Rachel Jones, the lead author of the study.
“The decline in abortions coincided with a steep national drop in overall pregnancy and birth rates,” she said in a statement. “Contraceptive use improved during this period, as more women and couples were using highly effective, long-acting reversible contraceptive methods, such as the IUD. Moreover, the recent recession led many women and couples to want to avoid or delay pregnancy and childbearing.”
Use of contraceptives has become near-universal and more common among married women than single.
Obamacare’s birth control mandate obligates all insurers to cover contraception without a co-pay, as it does all preventive care. Before the law 28 states already had such mandates in place and 85 percent of large firms offered coverage as part of their plans. Since August 1 of last year, that coverage is now standard for women no matter where they live or how they acquire health insurance.
A Washington University study released last year showed that providing birth control at no cost reduced the rate of abortions by 62 to 78 percent compared to the national rate. Meanwhile the right’s strategy of reducing abortions by requiring sonograms has had no effect on a large majority of women, according to a new study in Obstetrics and Gynecology.
Instead of encouraging the pro-life benefits of Obamacare, conservatives continue to try to minimize them. Republicans want to give employers the ability to opt out of the mandate, asserting falsely that some of the birth control options available induce abortion.
By opposing the mandate, the right reveals that its goal has always been to reduce women’s options, not unintended pregnancies. Obamacare will reduce thousands — if not hundreds of thousands — of abortions and could reduce even more if the Republican-led states that rejected Medicaid expansion would agree to provide subsidized care to approximately 4 million Americans.
Instead, so-called “pro-lifers” enable politicians who deny health insurance to those who need it most, threatening the lives of thousands. If only they were as pro-life as Obamacare is.
By: Jason Sattler, The National Memo, February 4, 2014
“Delusions Of Failure”: How Republicans Are Deceiving Voters And Deceiving Themselves
The Republican response to the State of the Union was delivered by Cathy McMorris Rodgers, Republican representative from Washington — and it was remarkable for its lack of content. A bit of uplifting personal biography, a check list of good things her party wants to happen with no hint of how it plans to make them happen.
The closest she came to substance was when she described a constituent, “Bette in Spokane,” who supposedly faced a $700-a-month premium hike after her policy was canceled. “This law is not working,” intoned Ms. McMorris Rodgers. And right there we see a perfect illustration of just how Republicans are trying to deceive voters — and are, in the process, deceiving themselves.
I’ll get back to “Bette in Spokane” in a minute, but first, is Obamacare “not working”?
Everyone knows about the disastrous rollout, but that was months ago. Since then, health reform has been steadily making up lost ground. At this point enrollments in the health exchanges are only about a million below Congressional Budget Office projections, and rising faster than projected. So a best guess is that by the time 2014 enrollment closes on March 31, there will be more than six million Americans signed up through the exchanges, versus seven million projected. Sign-ups might even meet the projection.
But isn’t Obamacare in a “death spiral,” in which only the old and sick are signing up, so that premiums will soon soar? Not according to the people who should know — the insurance companies. True, one company, Humana, says that the risk pool is worse than it expected. But others, including WellPoint and Aetna, are optimistic (which isn’t a contradiction: different companies could be having different experiences). And the Kaiser Family Foundation, which has run the numbers, finds that even a bad risk pool would have only a minor effect on premiums.
Now, some, perhaps many, of those signing up on the exchanges aren’t newly insured; they’re replacing their existing policies, either voluntarily or because those policies didn’t meet the law’s standards. But those standards are there for a reason — the same reason health insurance is now mandatory. Health reform won’t work if people go uninsured, then sign up when they get sick. It also can’t work if currently healthy people only buy fig-leaf insurance, which offers hardly any coverage.
And what this means, in turn, is that while we don’t know yet how many people will be newly insured under reform, we do know that even those who already had insurance are, on average, getting much better insurance. Since the goal of health reform was to make Americans more secure — to reduce their risk of being unable to afford needed health care, or of facing financial ruin if they get sick — the law is doing its job.
Which brings me back to Bette in Spokane.
Bette’s tale had policy wonks scratching their heads; it was hard to see, given what we know about premiums and how the health law works, how anyone could face that large a rate increase. Sure enough, when a local newspaper, The Spokesman-Review, contacted Bette Grenier, it discovered that the real story was very different from the image Ms. McMorris Rodgers conveyed. First of all, she was comparing her previous policy with one of the pricier alternatives her insurance company was offering — and she refused to look for cheaper alternatives on the Washington insurance exchange, declaring, “I wouldn’t go on that Obama website.”
Even more important, all Ms. Grenier and her husband had before was a minimalist insurance plan, with a $10,000 deductible, offering very little financial protection. So yes, the new law requires that they spend more, but they would get far better coverage in return.
So was this the best story Ms. McMorris Rodgers could come up with? The answer, probably, is yes, since just about every tale of health reform horror the G.O.P. has tried to peddle has similarly fallen apart once the details were revealed. The truth is that the campaign against Obamacare relies on misleading stories at best, and often on outright deceit.
Who pays the price for this deceit? In many cases, American families. Although health care enrollment is actually going pretty well at this point, thousands and maybe millions of Americans have failed to sign up for coverage because they believe the false horror stories they keep hearing.
But conservative politicians aren’t just deceiving their constituents; they’re also deceiving themselves. Right now, Republican political strategy seems to be to stall on every issue, and reap the rewards from Obamacare’s inevitable collapse. Well, Obamacare isn’t collapsing — it’s recovering pretty well from a terrible start. And by the time that reality sinks in on the right, health reform will be irreversible.
By: Paul Krugman, Op-Ed Columnist, The New York Times, February 2, 2014
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