CBO Budget Report Includes ACA Impact on Health Coverage, EmploymentImage Banner

CBO Budget Report Includes ACA Impact on Health Coverage, Employment

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CBO Budget Report Includes ACA Impact on Health Coverage, Employment

February 12, 2014

The Congressional Budget Office issued a report, "The Budget and Economic Outlook: 2014 to 2024" last week. The report finds that the Affordable Care Act will increase the number of non-elderly people who have health insurance by 13 million in 2014, 20 million in 2015, and 25 million in each year going forward through 2024. Despite this increase, however, the CBO found that approximately 31 million non-elderly individuals will not have health insurance, with twenty percent of that group being Medicaid-eligible but who opt not to enroll, and another five percent living in a state that has chosen not to expand its Medicaid program. 

Since its release, the report's estimate of the impact of the ACA on the labor market has been seized upon by critics and supporters of the law alike. The report estimates that the ACA will reduce the total number of net hours worked by up to two percent from 2017 to 2024. This reduction will come from a decline in the number of full-time equivalent workers in the workforce. The report notes that the reduction will come from a decline in the amount of labor that workers choose to supply, rather than from a drop in business' demand for labor. In other words, more people will stop looking for work that were before. This is because provisions in the ACA for subsidies and employer-mandated coverage will give people more flexibility to work fewer hours, change jobs, or leave a job to pursue other education or professional goals. The report estimates that the effect of this net reduction in labor will be small or negligible for most