Health Care Law May Result in 2 Million Fewer Full-Time Workers

WASHINGTON — A new analysis from the Congressional Budget Office says that the Affordable Care Act will result in more than 2 million fewer full-time workers in the next several years, providing Republican opponents of the law a powerful political weapon leading up to this year’s midterm elections.

The law is also expected to have a significant effect on hours worked, the nonpartisan budget office said in a regular update to its budget projectionsreleased Tuesday. With the expansion of insurance coverage, more workers will choose not to work and others will choose to work fewer hours than they might have otherwise, it said. The decline in hours worked will translate into a loss of the equivalent of 2.5 million full-time positions by 2024, the budget office said.

Republicans immediately seized on the report as evidence of the health care law’s adverse effect on the economy.

“Obamacare is only making things worse,” said Representative Paul D. Ryan of Wisconsin in a statement. “This costly law is not only pushing government spending to new heights, it is disrupting coverage and leaving millions of Americans worse off.”

Others also piled on. “For years, Republicans have said that the president’s health care law creates uncertainty for small businesses, hurts take-home pay, and makes it harder to invest in new workers,” said Speaker John A. Boehner of Ohio. “The middle class is getting squeezed in this economy, and this C.B.O. report confirms that Obamacare is making it worse.”

The budget office analysis found that much of the law’s effect comes from reducing the need for people to take a full-time job just to get insurance coverage, and from the premium subsidies effectively bolstering household income.

But it will also have an effect on businesses, the report said, including by encouraging them to reduce employee hours to avoid the so-called “employer mandate.”

The White House pushed back against the Republican attacks, citing the report’s finding that the law will have no effect on the total demand for worker hours.

“Claims that the Affordable Care Act hurts jobs are simply belied by the facts in the C.B.O. report,” said the White House press secretary, Jay Carney, in a statement. “C.B.O.'s findings are not driven by an assumption that A.C.A. will lead employers to eliminate jobs or reduce hours, in fact, the report itself says that there is ‘no compelling evidence that part-time employment has increased as a result of the A.C.A.'”

Republicans are considering demanding a repeal of the “risk corridor” provisions in the law in exchange for lifting the statutory debt ceiling this month. The budget office found that those provisions — designed to buffer the costs for insurers whose claims come in higher than anticipated, to prevent them from raising premiums — would net $8 billion for the government over three years, reducing the deficit.

The White House and congressional Democrats have refused to negotiate over the debt ceiling, a limit on the total amount of government debt the Treasury is allowed to issue.

The budget office also estimated that about a million fewer Americans than expected will receive health insurance coverage in 2014 through the marketplaces established by the Affordable Care Act, primarily because of the troubled rollout of the exchanges. It also revised its estimates of the number of people receiving coverage through Medicaid and Children’s Health Insurance Plan coverage, lowering it by about 1 million.“Just when we have the opportunity to make progress on investing in the future, some members of Congress are falling back into their old habits and planning to manufacture a crisis over the debt limit,” said Senator Patty Murray, Democrat of Washington, at a hearing on Tuesday. “Just like last time, they can’t seem to agree on which ridiculous demand to make in exchange for ensuring the United States pays its bills.”

The budget office now estimates that the 6 million Americans will enroll through the exchanges in their first year, rather than 7 million; and that expanded Medicaid and other public programs will enroll 8 million Americans, rather than 9 million. But the long-term effect of the problems with the rollout remains unclear, the budget office said, declining to alter its coverage projections for later years.

“Over time, more people are expected to respond to the new coverage options, so enrollment is projected to increase sharply in 2015 and 2016,” the budget office said in its report. It estimates that as of 2017, about 25 million Americans a year will obtain coverage on the exchanges.

The news in the report is not all bad for Democrats. The office also sees the budget deficit falling to $514 billion in the 2014 fiscal year, or about 3 percent of economic output, from $1.4 trillion in 2009. Many economists consider deficits of that size to be sustainable in the long term.

The budget office sees the deficit continuing to drop in the 2015 fiscal year, to $478 billion, or about 2.6 percent of economic output. From there, though, it anticipates the deficit rising again as government spending picks up, absent congressional action.