Opponents of the health-care expansion have consistently claimed that it has cost jobs. Yet another report shows that's not true.
As the Republican-controlled Senate prepares for another vote to repeal the Affordable Care Act, new information allows us to evaluate how ACA has performed.
Remember, Obamacare was a market-based plan originated by conservatives and implemented on a state level by Mitt Romney as governor of Massachusetts. It was not the single-payer option favored by progressives. Nevertheless, Republicans disowned and opposed it, spending years under President Barack Obama making symbolic repeal votes (more than 50 in the House). Now with total control of the government, they may make good on their repeal promises.
Obamacare unquestionably raised the number of insured Americans and lowered the numbers of uninsured to historic lows. But what about another claim: That ACA was a “job killer.” During the campaign, Donald Trump said repealing it would save 2 million American jobs. Republicans regularly campaigned against Obamacare using the label. Is it true?
Apparently not, based on a new paper by economists at Stanford University. It specifically focuses on a 2014 Congressional Budget Office prediction that the availability of affordable insurance in the individual market would cause many workers to cut their hours, resulting in the equivalent of 2 million fewer full-time jobs by this year. But the Stanford study says “the average labor supply effects of the ACA were close to zero.”
Most Read Business Stories
- License plate scanners were supposed to bring peace of mind. Instead they tore the neighborhood apart.
- Medicare Advantage is cheaper for a reason — beware
- As climate concerns threaten air travel, aviation industry banks on technology solutions
- Nuclear fusion edges toward the mainstream
- As housing costs climb, another Seattle apartment project tests a new way of building
More to the point, they were a wash. Labor force participation did fall in places with high numbers of uninsured people who were eligible for private insurance subsidies under the act.
“In contrast, in areas with a high share uninsured but with incomes too low to qualify for private insurance subsidies, labor force participation increased significantly. These changes suggest that middle-income individuals reduced their labor supply due to the additional tax on earnings while lower income individuals worked more in order to qualify for private insurance. In the aggregate, these countervailing effects approximately balance.”
Michael Hiltzik of the LA Times reported on how the act is credited with creating 240,000 health-care jobs from 2014 to 2016. And as I wrote last month, the nonpartisan Commonwealth Fund and the Milken Institute School of Public Health at George Mason University estimate that repeal could cost 1 million jobs by 2026.
In other words, the danger isn’t merely going back to a cruel pre-Obamacare status quo. It could be much worse.
Today’s Econ Haiku:
The Pathé building
I’m watching as ‘film row’ ends
The cutting-room floor