CBO Explains Health-Care Law Job Loss Projections

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Dec. 8 — The Congressional Budget Office Dec. 7 released a paper showing the methodology it used to project the employment impacts of the Affordable Care Act over the next 10 years.

The CBO in August projected that full-time employment would be about 2 million lower in 2025 than without the health-care insurance law. “Those estimates were based mainly on CBO's calculations of the effects of the law's major components on marginal and average tax rates and on the agency's analysis of research about the change in the labor supply resulting from a change in tax rates,” researchers Edward Harris and Shannon Mok of CBO's Tax Division said in the paper.

About three-quarters of the projected reduction in employment is due to the impact of health insurance expansions, which raise effective tax rates on workers' earnings—for instance, by phasing out health insurance subsidies as people's income rises, they said.

For More Information

For more information, see Compensation and Benefits Library's Effective Dates for Key Provisions Under the Affordable Care Act chapter.

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