A top economist estimates that Obamacare likely will create small reductions in hours and pay once it is fully implemented, but experts counter the law’s economic impact has been overstated.
The heated debate occurred Wednesday during a hearing of the Joint Economic Committee. Battles over the economic impact of the law are likely to heat up in the next year or so now that it is closer to full implementation and the law’s employer mandate takes effect.
Economist Casey Mulligan said that once implemented, the law would reduce worker hours by 3 percent and national income by 2 percent compared to if the law didn’t exist. He said several new taxes introduced by Obamacare and the law’s employer mandate will lead to the reductions.
Starting next year, the law requires employers with more than 50 employees who work for 30 hours or more to provide health insurance to at least 95 percent of them or pay a penalty for each employee.
That mandate is a principal reason workers will have reduced hours, said Mulligan, an economics professor at the University of Chicago.
“There is no doubt you will have the 29ers, people working 29 hours,” he said.
He added that the estimated reduction in income could be linked to how employers have responded to tax changes previously.
Mulligan made an important caveat, however — he didn’t take into account the health benefits of the law and its expansion of coverage.
Another expert countered that dire predictions surrounding the law have yet to come true.
“Health reform has not been a job killer,” said Paul Van de Water, senior fellow at the left-leaning think tank Center on Budget and Policy Priorities.
“The share of part-time work rose sharply during the recession, but that situation has turned around,” he told the panel. “Since Obama signed healthcare reform in 2010 all of the increases [in new jobs] have been in full time, and the share of part timers continues to fall.”
Van de Water also noted that healthcare reform effectively kills “job lock,” which occurs when an unhappy worker stays at a job he or she hates because of the insurance. Now consumers have more options for insurance because of Obamacare and can find another position, he said.
Available data from the federal government hasn’t shown large job losses due to the law, but there is evidence of fewer hours.
The Bureau of Labor Statistics found last month that more Americans are working just under 30 hours a week and fewer are working just over that threshold compared with the middle of 2013. However, the percentage is rather small at about 1.5 percent.
Questions from panel members largely fell across partisan lines, with Republicans taking on Van de Water’s claims and Democrats blasting Mulligan’s.
“I have thousands of letters and emails [from constituents] that would say, ‘I don’t know what Van De Water is talking about,'” said committee Chairman Sen. Dan Coats, R-Ind. He said constituents have told him that they are paying more for health plans.
Rep. Carolyn B. Maloney, D-N.Y., the committee’s ranking member, said that repealing Obamacare could result in killing thousands of people due to lack of coverage.
