CBO: Affordable Care Act will reduce full-time workforce by more than 2 million in the next decade

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House Ways and Committee Chairman Rep. Dave Camp (R-MI)
House Ways and Committee Chairman Rep. Dave Camp (R-MI)

The full-time work force will lose roughly 2 million people overall by 2024 as a result of the Affordable Care Act, according to new figures from the Congressional Budget Office. The CBO report, released Tuesday, came one week after an expert told lawmakers that nursing home staff are among those most likely to have their hours reduced due to the ACA. 

More than 7.5% of the nursing home workforce is vulnerable to having hours reduced as a result of the health law's “employer mandate,” Stanford University's Lanhee J. Chen, Ph.D., told the House Ways & Means Committee on Jan 28. The mandate calls for employers with at least 50 full-time workers to provide health insurance that meets certain requirements, or face a penalty. The ACA defines full-time work as 30 hours or more a week, and some employers threatened to cut workers' hours below that threshold to avoid the mandate.

The employer mandate places a total of 2.6 million workers at risk of reduced hours, according to Chen's written Congressional testimony. This number is similar to the CBO's projection that the full-time workforce will lose 2.5 million workers. However, the budget office said this erosion will mostly be due to expanded insurance options, not the employer mandate.

For example, the availability of government-subsidized, low-cost health plans available through the online marketplaces might lead some workers to work less, the CBO stated. This is because the premium subsidies decrease as the beneficiary's income increases.

While there are “anecdotal reports” of employers limiting workers' hours, there is “no compelling evidence” that the ACA has caused an increase in part-time employment, according to the report. Still, critics of the employer mandate — and the ACA generally — seized on the CBO figures to support their arguments. The report doubled the CBO's 2010 estimate of how much the health law will reduce labor use. The new numbers are from new research and more in-depth analysis, according to the budget office.

For its part, the House Ways and Committee seems to have been persuaded that changes should be made to the employer mandate. The panel, chaired by Rep. Dave Camp (R-MI), approved two bills Tuesday that would alter the definition of full-time work to 40 hours a week. This would give businesses more leeway to maintain the status quo and protect workers from having their hours cut by companies seeking to stay under the threshold of 50 full-time employees, according to the bills' supporters.

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