Affordable Care Act could cut the number of full-time workers in the U.S. by more than 2 million

Workers that are eligible to buy cheaper health insurance or receive financial incentives under “Obamacare” may choose to work less hours, according to a Congressional Budget Office report.

Those choices would cut the number of full-time workers by over 2 million people by 2021. CBO had originally estimated that 800,000 people would make those choices.
“By providing subsidies that decline with rising income and increase with falling income, and by making some people financially better off, the Affordable Care Act will create an incentive for some people to work less,” the report states. “The structure of the tax code , in which rising incomes push some people into higher tax brackets , will also reduce labor force participation slightly.”

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For example, someone that works full time to keep employer benefits may choose to work part time and purchase health insurance through the exchange. Also, someone that is not eligible for Medicaid or a person that would like more help through subsidies could drop employment hours to make those gains.

 

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