Job Loss with the ACA: The law of unintended consequences!

Watch CNN and you’ll see spin from one angle. Watch FOX News and see another. For a balanced assessment of a recently released non-partisan report from the Congressional Budget Office (CBO), read this!


According to the NY Times, the CBO released a report on Tuesday that was quite shocking to many, including me. The office, which truly is non-partisan and basically crunches the numbers regarding how the budget is affected by legislation passed by Congress (including the Affordable Care Act (ACA)), stated that the ACA will shrink the work force by more than 2 million full time positions!


When I read this, I thought the CBO was referring to employers firing or laying off their full time employees so they wouldn’t have to purchase insurance for their employees under the employer mandate (employers with more than 50 employees have to pay for their employees health insurance). But that really wasn’t the underlying reason.


The reason there will be fewer full-time positions is that employees will choose not to work as much or not at all! Essentially, in the past, consumers had to get a full time job so they could receive employer-based health insurance. Now with the ACA promising more affordable insurance coverage through health exchanges and providing insurance even in the case of pre-existing conditions, consumers don’t necessarily need to work full time to get employer-based coverage because they can theoretically afford it on their own now. So they’ll prefer a part-time job or maybe the spouse of a two-income family won’t feel the pressure to work at all. According to the CBO, there will be 2.5 million fewer full-time positions by 2024!


Bottom line is that there will be fewer full-time positions – not because employers want to reduce their costs but because employees are choosing to work less…and that’s an unintended consequence if there ever was one!



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