The Obamacare subsidies case might cost poor people federal assistance for health coverage, but it will boost wages and jobs in the long run, a new analysis argues.
If the Supreme Court blocks the insurance subsidies this summer, workers could earn up to $940 more and 1.2 million more people will join the workforce, estimates Doug Holtz-Eakin, former director of the Congressional Budget Office under George W. Bush and president of the American Action Forum.
Advocates for the Affordable Care Act are worried that millions of Americans will lose access to affordable health insurance if the court upholds the case King v. Burwell. But to Holtz-Eakin and other conservatives, a decision blocking the subsidies would have positive ripple effects by enabling economic growth.
In June, the court will say whether or not the Obama administration may keep awarding the subsidies to low and middle-income Americans in the 37 states relying on healthcare.gov. The subsidies are a major way the law seeks to get coverage to low-income people and lower the uninsured rate.
Everyone agrees that losing the subsidies would make coverage unaffordable for many Americans. But in an analysis released Wednesday to the Washington Examiner, AAF argues that more individuals would be prompted to join the workforce where they could receive employer-sponsored coverage.
Employers would also be exempt from the law’s penalty for failing to offer affordable coverage, since the penalty is triggered by the subsidies. Many companies that already offered coverage before the healthcare law would continue to do so, but some wouldn’t, freeing up funds to hire more workers or pay them for more hours.
In total, the group estimates that a decision upholding the King challenge would exempt 262,000 businesses from the coverage mandate, prompting the creation of 237,000 news jobs and causing 1.2 million more workers to join the workforce.
“While a ruling in favor of the plaintiffs … would prohibit subsidies flowing to states without their own exchanges, there are also economic benefits related to the elimination of the individual mandate for some and the employer mandate for all affected citizens,” the analysis says.
