Tuesday, January 13, 2015

McSally Votes To Change Obamacare, Help Biz, Expand the Deficit

Posted By on Tue, Jan 13, 2015 at 12:23 PM

In her first week in office, Southern Arizona Congresswoman McSally voted with her GOP colleagues to advance a number of measures, including HR30, which would change the definition of a fulltime worker for the purposes of the Affordable Care Act from 30 hours a week to 40 hours a week.

That legislation puts two of McSally’s campaign promises at odds with each other. She had pledged to work to undo the Affordable Care Act but also bring federal spending under control. While the vote would bring changes to the ACA, the Congressional Budget Office estimated that it would cause a million Americans to lose their company-provided health insurance while expanding the deficit by nearly $54 billion over the next 10 years. The CBO forecast suggested that at least a half-million of those who lost their employment-based health insurance would end up being insured by Medicaid, at least in states that have expanded Medicaid under the ACA.

The Obama administration announced that the legislation was headed for a veto, should it pass Congress. The official statement from the White House said, in part, that the legislation “would significantly increase the deficit, reduce the number of Americans with employer-based health insurance coverage, and create incentives for employers to shift their employees to part-time work—causing the problem it intends to solve.”

McSally spokesman Patrick Ptak said McSally believed revising the ACA’s mandate would help employers avoid cutting hours for their workers.

“The 30-hour work week provision in Obamacare could have drastic effects on workers, significantly reducing their hours and wages,” Ptak said. “With workers already struggling throughout Southern Arizona, the last thing the government should be doing is incentivizing cutting their hours. The bipartisan bill passed in the House last week restores the work week to a more accurate 40-hours and allows employers to focus on hiring more workers instead of paying more in Obamacare penalties.”

But whether the current law is leading to more part-time workers is an open question. The Center on Budget and Policy Priorities notes:

Recent data provide scant evidence that health reform is causing a significant shift toward part-time work, contrary to the claims of critics. The number of part-time workers who would rather be working full time is shrinking. And there’s every reason to believe that health reform will have only a small effect on the part-time share of total employment.

More important, raising the law’s threshold from 30 hours a week to 40 hours would make a shift toward part-time employment much more likely — not less so. That’s because only a small share of workers today — 7 percent — work 30 to 34 hours a week and thus are most at risk of having their hours cut below health reform’s threshold. In comparison, 44 percent of employees work 40 hours a week, and another several percent work 41 to 44 hours a week. Thus, raising the threshold to 40 hours would place many more workers at risk of having their hours reduced. In short, it’s the present legislation, not health reform, that threatens the traditional 40-hour work week the legislation’s sponsors say they want to protect.

However, the U.S. Chamber of Commerce supports the GOP's legislation:

While the hours of all employees are used to determine the 50- FTE employee threshold and dictate whether the company will be required to offer health care coverage, it is the new classification that those working 30 hours per week are now “full-time employees” that will cripple businesses and force them to restructure their workforce to mitigate costs.

Although many of the smaller businesses are slowing or halting their plans for growth by not hiring additional employees, perhaps more detrimentally businesses of all sizes are having to reducing the hours of workers who had been working 40 hours a week. The result: A nation of part-time workers with multiple jobs. This is not good for business and not good for workers.

This new 30 hour definition is hurting individuals that need as many hours as possible to support their families. Instead of benefitting workers, this provision is harming them. Before the ACA, over 178 million Americans, more than half of the population, received voluntary employer-based health insurance. The new definition of a full-time employment has slashed that number and hurt the income of millions of hard working hourly workers.

Critics of the GOP's legislation have an unlikely ally in the conservative National Review's Yuval Levin:

As Sherry Glied and Claudia Solis-Roman recently found, nearly 29 million employees of large firms work between 40 and 44 hours a week (and about 27 million of them work exactly 40 hours a week), while only about 3 million work between 30 and 34 hours a week and another roughly 4 million work between 35 and 39 hours a week for such firms. Even if you just look at workers not now offered employer coverage, this difference means that putting the cut-off for the employer mandate at 40 hours would likely put far, far more people at risk of having their hours cut than leaving it at 30 hours. That would make for a worse effect on workers and on the economy. So by setting the definition lower, Obamacare’s architects were trying to mitigate the damaging effects of the employer mandate some, and by setting it higher Republicans would be worsening those effects.

Of course, the effects on workers near the 30-hour cut-off are still unacceptable, just as Boehner and McConnell suggested. But the solution to that is not to punish far more workers but to lift the burden off of all of them by eliminating the employer mandate altogether. For these very reasons, the politics of doing so would also be better than the politics of just fiddling around with the law’s definition of full-time work. The administration has already delayed the mandate and held off from applying it to firms with between 50 and 100 workers, and when the House voted last year to put off the implementation of the mandate, 35 Democrats joined Republicans to support the bill. Such a measure could plausibly get the handful of Senate Democrats it would need to survive a filibuster. It might even get signed by the president. Some Democrats might oppose it because it would expose them to the argument that they were relieving employers but not individuals of an Obamacare mandate, but that’s just more reason for Republicans to support it, since they’d want to repeal the individual mandate too and would benefit from a chance to press the Democrats on it.

For reasons of both policy and politics, it seems to me that a repeal of the employer mandate makes much more sense than an adjustment of its definition of full-time work. And that adjustment, quite apart from the appeal of other measures, seems likely to be worse than doing nothing.

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