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What has PPACA really done to jobs?

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Two analysts today gave the Joint Economic Committee conflicting accounts of how the U.S. job market is really doing now that major Patient Protection and Affordable Care Act (PPACA) insurance programs and insurance rules have come to life.

One witness, Paul Van de Water, a witness from the Center on Budget and Policy Priorities, a research center popular with Democrats, testified at a committee hearing on PPACA’s effects on employment that the job market looks good because it is good.

“Health reform has not been a ‘job killer,’” Van de Water testified. “The economy has experienced the longest stretch of job growth on record.”

Unemployment has fallen since President Obama signed PPACA into law, in March 2010, and the percentage of all workers who are involuntarily working part-time has also fallen sharply since 2010, Van de Water said.

PPACA could eventually improve the job market in some ways by, for example, improving workers’ health, and by giving people more flexibility to change jobs and start new businesses, Van de Water said.

See also: Dire PPACA predictions: A look back

Separately, Fredric Blavin and other analysts affiliated with the Urban Institute today published a paper supporting the idea that the group insurance market has remained stable from June 2013 through March 2015. Those analysts say there is no evidence that PPACA has hurt low-income workers’ access to group health benefits or group health take-up rates.

Casey Mulligan, an economist from the University of Chicago, argued that, logically, PPACA is likely to reduce employment by 3 percent, and gross domestic product (GDP) by 2 percent, because it makes being a full-time worker so expensive.

“The health law has made full-time workers some of the only people who have to pay the full price of health care,” Mulligan said.

Through taxes, fees and cost-shifting, the full-time workers also have to pay for everyone else’s coverage, Mulligan said.

The net effect of the penalty on large and midsize employers that fail to provide PPACA-compliant health benefits, and PPACA exchange plan premium subsidies for people who lack access to employer-sponsored coverage, is about zero, and that means PPACA imposes only a little more of a net burden on workers at employers that offer no coverage than on workers at employers that offer PPACA-compliant coverage, Mulligan said.

The law means that part-time workers, who trigger no penalty payment requirements and get subsidies they can use to buy their own PPACA coverage, are much cheaper to employ than full-time workers, whether the full-time workers have group health benefits or no group health benefits, Mulligan said.

The effect, which, in economic terms, can be described as a tax that “is so large that some people would earn less working full-time than they would working part-time,” Mulligan said.

See also: PPACA spawned dozens of startups


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