Obamacare is back in focus this week in Washington, where lawmakers will hold a vote to repeal the law’s so-called “30 hour rule” with a bill called the Save American Workers Act.
The House of Representatives has passed the bill before, and with strong bipartisan support. Unfortunately, it has never been sent to the president. It offers a reasonable answer to a real problem: how to balance promoting access to health coverage for hardworking Americans without burdening employers with new expenses that may cost workers their jobs.
Americans have considered the 40-hour workweek as full-time work for more than 75 years now, dating back to when Congress amended the Fair Labor Standards Act in 1940. Obamacare broke away from decades of precedent and adopted a 30-hour standard for full-time work instead, which is lower than work weeks for our competitors in China, France, Japan and other countries.
Under the law, employers with 50 or more employees working an average of 30 hours a week or more must offer health coverage less they pay punishing fines.
The Save American Workers Act would repeal Obamacare’s arbitrary redefinition of full-time work and restore the 40-hour standard observed throughout the country. This is the right thing to do. At the Council for Affordable Health Coverage, where I serve as president, we support a robust employer-sponsored health coverage market, but the 30-hour work week does not help realize that goal. Instead of expanding coverage, it is reducing workers’ hours.
Don’t take my word for it: as far back as 2013, the Wall Street Journal reported on the new class of “Obamacare 29ers” who had seen their shifts cut as a result of this provision in the healthcare law.
In 2015, FiveThirtyEight took another look at these trends, confirming that “The health law has likely led a few hundred thousand workers to see their hours cut or capped … most of them are among the economy’s most vulnerable: low-wage, part-time workers who likely have few other options.”
Democrats like Rep. Dan Lipinski, D-Ill., are taking note. As he explained just last year, “Most Americans will tell you that a full-time work week is 40 hours, but the [Affordable Care Act] defines full-time as 30 hours … In its current form, the ACA puts the take-home-pay and scheduling flexibility for millions of hard-working Americans at risk. Changing the law … is just common sense.”
The version of the Save American Workers Act that is slated for a vote later this week contains some additional policies — like delaying Obamacare’s “Cadillac tax” on generous employer-sponsored plans (President Obama himself signed an earlier two-year delay of this tax into law) — but the centerpiece of the bill remains a needed fix to the unworkable 30-hour rule. It deserves swift passage.
Still, Congress should not be too quick to give themselves a pat on the back. While we at CAHC endorse the Save American Workers Act, there is more work to be done to truly save hardworking Americans from an unsustainable health cost trend.
Just last week, we released a study alongside brokerage firm Willis Towers Watson which found that runaway healthcare costs are eating away at workers’ take-home pay and concentrating income among the wealthiest Americans.
While total compensation has risen steadily since 1980, health benefits have taken up an ever-increasing piece of the pie for low and middle-income earners with precious little to show for it. Indeed, U.S. life expectancy declined in both 2015 and 2016 — the first two-year drop since the 1960s.
Washington Post columnist Robert Samuelson summed up our findings succinctly: “For the bottom 60 percent of U.S. workers, wage gains have been completely wiped out by contributions for employer-provided health insurance.”
And Obamacare is not the sole culprit. The 2010 healthcare law only exacerbated a trend that started long before it was enacted. Any meaningful fix must do more than pluck some of the lowest hanging fruit off its vine.
If lawmakers truly hope to “save American workers,” they must think and act bigger and broader than a single law and look to the underlying drivers of the medical cost trend.
That means addressing uncompetitive markets and correcting policies that lead to higher prices and medical costs, reforming laws that hold back the proliferation of value-based arrangements for prescription drugs, combating the $300 billion crisis of medication nonadherence, and yes, reforming or repealing aspects of Obamacare that ultimately lead to higher premiums and greater cost sharing.
More than anything, it means a willingness to act.
Joel White is the president of the Council for Affordable Health Coverage. Learn more at CAHC.net.
