Saturday, February 12, 2011

Will Obamacare Kill Jobs? No, but it will free the jobs market.

Below, Ezra Klein explains how job losses will occur under health care reform. Not only are the job losses good, but the influx of new labor will have more openings to fill.

The GOP's rediscovery of the Congressional Budget Office's estimate that the health-care law will reduce the labor supply (which they recast as "destroying jobs") (is explained this way): 
 If you make health-care insurance cheaper and make it harder for insurance companies to deny people coverage, then a certain number of people who would like to leave the labor force but can't afford or access health-care insurance without their job will stop working. 
To understand why, imagine a 62-year-old woman who works for IBM and beat breast cancer 10 years ago. She wants to retire. She has the money to retire. But no one will sell her health care under the status quo. Under the health-reform law, she can buy health care in an exchange because insurers can't turn her away due to her history of breast cancer. So she'll retire. Or imagine a 50-year-old single mother who wants to home-school her developmentally disabled child but can't quit her job because they'll lose health care. The subsidies and the protections in the Affordable Care Act will give her the option to stop working for awhile, while under the old system she'd need to stick with her job to keep her family's health-care coverage. That's how health-care reform can reduce the labor supply. 
So when Republicans say that they want a better health-care reform bill that does even more to reduce costs, they're calling for legislation that, according to them, would "destroy" even more jobs than the Affordable Care Act. If they're against all legislation that might destroy jobs in this way, then they're against making health care cheaper. 
In fact, by that logic, we could just jack the price of health-care insurance up and make it easier for insurers to turn individuals away. Then even more people would have to stick with their employers. Job creation!  

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