'Obamacare' will reduce US workforce, report finds

media captionMark Mardell reports on how people in Kentucky are responding to Obamacare

President Barack Obama's health law will cut the US workforce by the equivalent of more than two million workers, budget analysts say.

The reductions will begin in 2017 after the law's provisions take full effect, the Congressional Budget Office (CBO) said in its report.

Lower-income workers will be hardest hit, limiting their hours to avoid losing federal subsidies.

Conservatives and the White House promptly clashed over the findings.

In Tuesday's report, the nonpartisan CBO said work hours would be reduced by the equivalent of 2.3 million full-time workers by 2021. It had previously estimated the health law would result in 800,000 fewer workers.

'Making it worse'

The Patient Protection and Affordable Care Act, commonly known as Obamacare, will result in a slower rate of employment growth over the next decade, according to the findings.

The congressional analysts say there will be fewer workers because healthcare subsidies would "reduce incentives to work" and pose an "implicit tax on working" for those returning to a job with health insurance.

The CBO said some US businesses may also decide to reduce their workforce to fewer than 50 full-time employees to avoid having to provide health insurance as mandated under the law.

The report also found US workers nearing retirement may opt to work shorter hours to retain healthcare subsidies until they qualify for Medicare, a federal health programme for the elderly.

Employees may also face lower wages due to tax levees and penalties against their employers, the report found.

The CBO findings provided fodder for conservatives, who are expected to make the health law a major issue in November's midterm elections.

"The middle class is getting squeezed in this economy, and this CBO report confirms that Obamacare is making it worse," Republican House of Representatives Speaker John Boehner said in a statement.


But the White House said the impact on the workforce would be due to voluntary steps by workers rather than businesses cutting jobs.

The law will leave people "empowered to make choices about their own lives and livelihoods", said White House Press Secretary Jay Carney.

media captionThe BBC's Mark Mardell assesses what the potential legacy of Obamacare

He added that the law would allow participants the freedom to retire early or become stay-at-home parents.

The glitches that plagued the healthcare website during its October rollout would probably result in one million fewer enrolled participants than initially anticipated, the CBO found.

Six million people are now forecast to sign up for coverage by this year.

The president's Democratic allies have been trying to distance themselves from the issue in the lead-up to November's elections.

Those polls will determine which political party holds sway in Congress for the final two years of Mr Obama's presidency.

Republicans say the law, America's most sweeping social legislation in decades, is an unacceptable government intrusion into healthcare. They have voted to repeal the act more than 40 times.

A Gallup poll on Tuesday found Americans continue to be more likely to disapprove of the law, by 51% to 41%.

image source, Reuters
image captionThe US spends more on healthcare per capita than any other nation

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