category: politics

Stop the Spin! Understanding What The CBO Report Means For ObamaCare

This week, there has been a great deal of confusion (caused by deliberate obfuscation) regarding the CBO Report and what it denotes about ObamaCare.

My fellow conservatives railed that it shows ObamaCare will cost 2.3 million jobs and any number of other dire proclamations. (Liberals also erred — I’ll get to that later.)

The problem is: the CBO Report Β didn’t say that. In fact, no matter how conservative pundits distort it, the report isn’t much of a boon to the battle against ObamaCare.

So what did the report actually say?

In a nutshell, it found that, because ObamaCare provided subsidies for low-income individuals, or even free Medicaid for those with zero income, some folks may choose to either keep lower work hours or avoid seeking that salary-raising job. Because of this, there would be roughly 2.3 million less full-time job workers in the economy, come 2021.

The echo-chamber twisted this into:Β β€œThere are going to be 2.3 million less jobs openings in the job market!” and β€œUnemployment numbers will go up by millions of individuals!” It’s more nuanced — and different — than that. Rather, ObamaCare creates a disincentive because folks would prefer to stay at a low income job or even have no income in order to be eligible for the subsidies or for Medicaid.

The CBO Director and CBO report itself made it very clear that this isn’t a case of ObamaCare affecting those wanting work and unable to find it.

While lower participation in the labor force admittedly impedes economic growth, it is not, in fact, clear whether this has a significant impact during times of unemployment (and, let’s face it — we’re never at a nice, 3% unemployment). Moreover, those individuals whoΒ decide to opt out of the labor force or stay in a lower-paying job (in order to have cheaper or no-cost insurance), will then have greater purchasing power (having saved money on health insurance costs, they now have more money to spend): so is there really a cost to the economy, even assuming a lower economic growth caused by a lower labor participation rate?

Both sides doubled-down on stupid, though — facts be damned. The CBO Report felt like a child being torn apart by two bickering, divorcing parents!

Let’s start with the Democrats, who promoted that Americans are no longer job-locked (meaning we are no longer tied to our jobs in order to keep Β health insurance — which they termed “job-lock.”)

Alright, first, let’s all agree that job-lock sucks. No one should be tied to their job for health insurance. We all know what a nuisance it is to leave a job and suddenly be without health insurance. (In case you’re curious, about 60% of Americans receive their health insurance through their employer).

(A small amount of Twitter users — non-thinking ones — went into a snark-explosion on Twitter, claiming the Democrats now say having a job is being job-locked. No, that isn’t what they said. Please do try to read before Tweeting.)

But hang on, Dems, not so fast! How exactly does ObamaCare reduce or prevent job-lock? Because it provides subsidies or free insurance (Medicaid’s expansion in some states)? OK, technically that does help folks acquire health insurance individually (i.e., because it’s cheaper now for some folks) but it’s only for (a) low-income or no-income folks; and (b) for those who qualify for subsidies but are employed, is it a superior option to the health insurance offered via their jobs? If it isn’t, then how is ObamaCare helping folks avoid job-lock? For instance, someone who makes $35,000 a year may qualify for an ObamaCare subsidy (meaning they get a discount when they shop for health insurance directly). But, their job might offer them a similar plan through their employer for only $100 taken out of their paycheck each month and/or a better plan. So, I ask the Democrats: how does ObamaCare truly avoid job-lock, as you claim? It doesn’t.

But, the Democrats might retort, the CBO Report did find that ObamaCare makes premiums cheaper, so, in that sense, doesn’t that free up Americans from employer-provided health insurance?

To that, I would answer: (a) Not really. Again, one would have to compare what that individual’s employer-provided plan and premium cost is vs. what they would obtain on the open market. (b) Yes, the report found ObamaCare will make premiums decrease. But I question that finding. Tis a matter of simple math: considering ObamaCare forces insurance companies to accept and insure those with pre-existing medical conditions (“Have an illness that will cost CIGNA $3 million in the next two years? No problem!), as well as eliminating or reducing caps, how on earth are premiums expected to go down?

As for conservatives, back away from the ‘job-killer’ claim based on the CBO Report. It is a distortion of what the CBO Report actually found and there are stronger (factually accurate) arguments to made against ObamaCare, about which I have previously written.

Lo and behold the mess of the CBO Report: one report… yet a dozen different ways to spin, distort, and extrapolate one’s own agenda.

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