Hasn’t the hubbub over the Affordable Care Act been fun? Regardless of politics, a piece of legislation that has been repeatedly called a “job killer” is somewhat concerning. Although we likely won’t understand the full economic impact of the bill for another 50 jillion years, let’s take a minute to talk about what we do know now- and whether or not it will make a difference in getting hired next week.
Aside from the overall economic impact of the bill, two aspects have been hailed as particularly damaging to jobs. One is the expansion of Medicaid which will extend benefits to able-bodied adults earning up to 133 percent of the poverty line, or around $15,000 per year. The second aspect is that requiring employers to provide insurance will make them less likely to hire more employees.
The expansion of Medicaid isn’t set to go into effect until 2014, and as part of the ruling last week individual states will be allowed to opt out of it if they choose. As far as its impact on jobs goes, economists are somewhat divided. If you work in the healthcare industry, you’re definitely in luck, as the direct influx of federal funding will create jobs in medicine. However, the Congressional Budget Office (CBO) still predicts that the Affordable Care Act will reduce the amount of labor in the economy by roughly half a percent.
Does that mean that people are going to have their jobs eliminated? Not necessarily. With the availability of health insurance independent of employment, many Americans may choose to leave their jobs. The CBO estimates that the majority of labor lost because of the ACA will be because of breaking the “job lock,” not because jobs are going to be eliminated.
Next, having to provide insurance to every employee is certainly daunting enough to cause some businesses to reduce their workforce, or freeze hiring. However, the overall cost to most businesses is set to be fairly small, according to an assessment by the Urban Institute. Businesses with fewer than 50 employees will not have to provide insurance, and if they choose to, they stand to receive $4.5 billion in subsidies in the form of tax credits. The cost of providing insurance is expected to drop for small firms by about 8 percent, with the option to purchase coverage in the Small Business Health Options Program (SHOP) exchanges. Medium-sized businesses (around 1,000 employees) who do not already provide coverage will incur a significant cost to begin doing so, but 94 percent of businesses of this size already provide insurance to their employees. Large businesses may see their health insurance related costs rise by about 1 percent.
Although some businesses claim the Affordable Care Act will impact their hiring, the current numbers don’t indicate a significant change in cost- except savings for small businesses. Jody Miller, of the Business Talent Group, even argues that the Affordable Care Act is crucial for small businesses, which need to provide healthcare in order to be competitive employers. For my money, that doesn’t seem too job-killing or daunting.
Thoughts? We know you’ve got ‘em. Chat it up in the comments below or tweet me: @ithinkther4iamb
SOURCES: PolitiFact, NY Times
IMAGE: Courtesy of NJP4WF