'Obamacare' will reduce US workforce, report finds

 BBC

 

Kentucky - cancer capital of the US - is deeply divided on "Obamacare"

The reductions will begin in 2017 after the law's provisions take full effect, the Congressional Budget Office (CBO) said in its report.

Lower-income workers will be hardest hit, limiting their hours to avoid losing federal subsidies.

Conservatives and the White House promptly clashed over the findings.

In Tuesday's report the nonpartisan CBO said work hours would be reduced by the equivalent of 2.3 million full-time workers by 2021. The watchdog had previously estimated the healthcare law would result in 800,000 fewer workers.
'Making it worse'
The Patient Protection and Affordable Care Act, commonly known as Obamacare, will result in a slower rate of employment growth over the next decade, according to the findings.

The congressional analysts say there will be fewer workers because healthcare subsidies would "reduce incentives to work" and pose an "implicit tax on working" for those returning to a job with health insurance.

The CBO said some US businesses might decide to reduce their workforce to fewer than 50 full-time employees to avoid having to provide health insurance as mandated under the law.

The report also found older US workers nearing retirement may opt to work shorter hours to retain healthcare subsidies until they qualify for Medicare, a federal health programme for the elderly.

Employees may also face lower wages due to tax levees and penalties against their employers, the report found.

The CBO findings provided fodder for congressional Republicans who are likely to make the health law a major issue in November's midterm elections.

"The middle class is getting squeezed in this economy, and this CBO report confirms that Obamacare is making it worse," Republican House of Representatives Speaker John Boehner said in a statement on Tuesday.

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'Obamacare' setbacks

• Oct 2013: Obama says "no excuse" for healthcare.gov website meltdown
• Nov: President is excoriated for "broken promise" that customers can keep their existing health insurance
• 27 Nov: Year's delay in online insurance enrolment for small businesses, the latest in a string of postponements
• Feb 2014: Analysts find the law will result in 2.3m fewer full-time workers by 2021

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