Why would any conservative lawmaker vote for a law to increase the federal budget deficit, force more Americans into government-funded health care, reduce private sector employee working hours, and increase the number of uninsured, because fewer will get private coverage from their employers? You would think that conservative members of Congress associated with the Tea Party would be up in arms about such a law—the movement, after all, was founded over opposition to increased federal spending and “government-run” health care.
Yet passing such a law is up as one of the first items of business of the new GOP-controlled 114th Congress—with the strong support of Tea Party lawmakers! The House of Representatives is expected to vote as early as today on a law, the Save American Workers Act of 2015, to increase the work-week hours counted toward being defined as a “full-time” employee from 30 to 40, for the purposes of determining whether larger employers are required to offer them a private health insurance plan that meets the requirements of the Affordable Care Act (ACA). Under the ACA, employers with 50 or more employees must provide “qualified” coverage to all employees who work 30 or more hours, or pay a penalty. The bill will almost certainly pass the House, and then be taken up by the Senate in short order (although it is unclear if Senate leadership can muster enough Democratic votes to reach the 60 votes needed to overcome a filibuster).
At first glance, raising the work hours from 30 to 40 that count as full-time employment, thereby subject to Obamacare’s employer mandate, seems reasonable, the argument being that the ACA currently creates an incentive to cut back employees’ working hours to fewer than 30 hours to get around the law’s employer-mandate. But raising the work hours from 30 to 40 will actually increase the number of Americans who will be forced to work fewer hours and lose their employer’s health insurance plan. Many of them will either then end up in the taxpayer-subsidized Obamacare plans offered through the exchanges, or in Medicaid. As a result, the number of people getting “government-run” taxpayer-subsidized coverage will go up, while employer-based private sector coverage will go down—adding tens of billions to federal spending and the budget deficit in the process.
Here are more details on what will happen if Congress raises the work hours from 30 to 40:
The deficit will go up, private sector coverage will go down, there will be more uninsured, and more people will become dependent on government programs. According to the Congressional Budget Office, the budget deficit will increase by $53.2 billion over the next ten years, because the government will end up paying for people who lose their employer health insurance coverage as employers reduce their hours to fall below 40); if they make less than 400% of the federal poverty level, they will be eligible for government subsidies to buy coverage from the exchange plans, or they might end up in Medicaid, depending on their state’s income eligibility standard. The states will also pay more because they will have to pay part of the costs for more people enrolling in Medicaid. “The agency [CBO] thinks that 1 million fewer people would get health insurance at work: an employer might decide not to offer coverage to someone who works 35 hours per week, for example, because they no longer face a penalty,“ explains Vox Media’s Sarah Kliff. “Some of these people would just be out of luck — a bit fewer than 500,000 people, CBO says, would end up uninsured. More would end up on government programs: between 500,000 and 1 million people would join Medicaid or enroll through the exchanges (maybe with a federal subsidy, if they earn less than 400 percent of the poverty line) after losing their employer coverage.”
That the GOP’s proposed change will increase the budget deficit nevertheless was “dismissed” by Senate Majority Leader Mitch McConnell, who argued that "It is wreaking havoc out in society regardless of what the CBO view may be of the impact on the U.S. budget.”
More people will be at risk of having their work hours cut. Kliff cites another independent study that concluded that “while working slightly more than 40 hours is common, working slightly more than 30 hours is rare. In other words, few workers are at risk of having hours slashed from 31 per week to 29, but many could be cut back from 41 to 39.” The study, by the Commonwealth Fund, found that “Compared with the current 30-hour definition, at a full-time definition of 40 hours per week, there are more than twice as many workers at high risk of hours reductions because they are within five hours of the full-time definition at firms that do not offer health insurance coverage.”
These hardly sound to me like outcomes that most Republicans would want. But in their zeal to undue any part of Obamacare, the very un-conservative result of more deficit spending, and more people in government run plans, doesn’t seem to matter as much as showing their base that they are doing something, anything to reverse the law. (Some conservatives get this: the National Review’s Yuval Levin argues that “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).”
As it turns out, the White House has promised that Obamacare will veto a change in the work hours, so this bill isn’t likely to become law anyway.
This initial Obamacare fight, though, illustrates a much bigger challenge facing the GOP-controlled Congress, which is that about any change that they might make in Obamacare will increase the deficit, and cause many people to lose coverage, just like the change in work hours. If they take away Obamacare’s taxes on insurance companies and medical devices, the deficit will go up. The same thing if they reduce payment cuts to hospitals and Medicare Advantage plans, or if they eliminate the cost-saving Medicare Independent Payment Advisory Board. People will lose health insurance coverage if they trim funding for Obamacare’s premium subsidies or Medicaid expansion, or if they repeal the individual insurance mandate. (The 114th Congress will likely try to pass these and other changes, but few will become law anyway because Obama would veto them).
As the work hour debate shows, it is one thing for conservatives to run against Obamacare, but making changes in it that don’t make things worse, and that don’t violate some of their own conservative principles (like not increasing the deficit), is going to be close to impossible.
Today’s question: What do you think of Congress’s effort to change the Obamacare work week?