Will the health reform bill kill jobs? Devastate small businesses? Push us back into recession?
According to several organizations and and anti=reform politicians, it’s the worst thing to hit the economy since the Depression.
But it turns out those doomsayers are mostly wrong.
Here’s what FactCheck.com says about these claims:
“this is health-care hooey, aimed at exploiting public concern over continuing high unemployment, with little basis in fact.
As we’ve said before (a few times), experts project that the law will cause a small loss of low-wage jobs — and also some gains in better-paid jobs in the health care and insurance industries. [emphasis added]
It’s also expected that more workers will decide to retire earlier, or work fewer hours, when they no longer need employer-sponsored insurance and can obtain it on their own with help from federal subsidies. But that just means fewer people willing to work — and it will free up jobs for those who want them. If anything, that could reduce the jobless rate.” [emphasis added]
Here are a few factoids about the PPACA (aka Accountable Care Act) that seem to have escaped the attention of those concerned about health reform and jobs.
– some employers with fewer than 25 FTEs are already receiving government aid to help defray the cost of insurance
– employers with fewer than 50 FTEs are exempt from the requirement to provide coverage
– the original CBO analysis of reform’s impact on employment [opens pdf] indicated job losses from the employer mandate “would probably be small.”
In fact, the jobs picture, according to the CBO, is mixed.
“According to CBO’s August 2010 analysis, the legislation, on net, will reduce the amount of labor used in the economy by a small amount–roughly half a percent–primarily by reducing the amount of labor that workers choose to supply.30 That net effect reflects changes in incentives in the labor market that operate in both directions: Some provisions of the legislation will discourage people from working more hours or entering the workforce, and other provisions will encourage them to work more.”
The well-regarded Lewin Group concurs:
“Lewin’s analysis showed 150,000 to 300,000 jobs lost, all minimum wage or near minimum wage positions that would be lost permanently. That doesn’t account for increases in jobs in other sectors, mainly health care, that Sheils also expects but hasn’t quantified.”
There are entities with different opinions, but they are not neutral parties. Again, here’s FactCheck:
“a study by the National Federation of Independent Business…projecting a 1.6 million job loss…was issued Jan. 26, 2009 — well over a year before the new law was actually enacted. NFIB has not issued any study of what actually became law, and one of this study’s authors, Michael Chow, told us by e-mail that it has no present plans to do so…
NFIB did not study the new law. Its report was based on a hypothetical employer mandate that bears little resemblance to what was actually passed — and it also projects a gain of hundreds of thousands of health care and insurance industry jobs.”
I’d note that this hasn’t stopped the GOP from using the 1.6 million lost job figure when referring to jobs lost due to PPACA…
(note – an earlier version credited the NFIB with continued usage of the 1.6 million statistic; I should have said the GOP. I regret the error)
What does this mean for you?
While there are problems with PPACA, while it is far from perfect, and while it could stand improvement in many areas, no matter what NFIB et al claim, it is not a “job-killer.”

Now that Rick Santorum has grabbed the hot potato known as the ‘GOP presidential race front-runner‘, it’s time to learn about his stance on health care, his platform, and his history.
Let’s start with past history; while platforms and political statements are kinda interesting, it is always instructive to see what candidates did before they became candidates.
Before we dive in, let’s remember our guy Rick is an avowed small-government fiscal conservative. (SGC).
Got that? OK, off we go!
First, SGFC Santorum voted for Medicare Part D, even while acknowledging he didn’t like the lack of any funding for the handout to the elderly. FYI – Part D’s share of the nation’s debt is now over $16 trillion…
While in the Senate, SGFC Santorum worked his butt off to to include extra spending in a Medicare overhaul for hospitals in Puerto Rico. The extra spending, funded by taxpayers to the tune of $400 million, would have directly benefited Universal Health Services, a hospital management company based in his home state of PA. Santorum wasn’t entirely successful but that didn’t stop him from reaping the benefits of the revolving door; according to newspaper accounts, “Within months of leaving the Senate, SGFC Santorum joined the board of Universal Health Services, where he collected $395,000 in director’s fees and stock options before resigning last year.”
Santorum’s platform is best characterized as “platitudinous” – rife with paeans to the wonders of the free market, personal choice, doctor-centric care and other blather, along with the standard rants describing “Obamacare” as “cruel”, “one-size-fits-all”, “job-destroying”. But there’s nothing substantive beyond calls for repealing Obamacare and making Medicaid a block-grant program.
Noticeably, the platform of this champion of the free market does NOT mention SGFC Santorum’s support for Paul Ryan’s Medicare voucher system. A more public acknowledgement would be unwelcome among the over-65 set, and likely wouldn’t endear him to his UHS buddies either. Oh, Santorum does echo the usual Republican call to allow individuals to purchase insurance across state lines, as if this amazingly-naive approach would actually do anything to address cost or increase choice, while hypocritically denying states’ rights to control heath insurance within their borders (wait…isn’t Santorum in favor of states setting their own health care policies?)
One of the more trenchant reviews of Santorum’s platform is fromDavid Williams; his dissection of Santorum’s health care tenets is well worth considering:
“It’s interesting that he’s calling for universal, affordable access. Sounds a lot like the Patient Protection and Affordable Care Act (PPACA). The only difference is this piece about “government bureaucrats.” I wonder what specific elements of PPACA he means by this -because I don’t see a lot of interference in “health care decisions” in the Act relative to the pre-PPACA days.
It’s hard to argue with the idea of “targeted” and “patient-centered” solutions. And actually, that’s the path taken by PPACA. Didn’t opponents criticize the length of the bill? A lot of that is because there are many different targeted approaches taken: some for individuals, others for small business, others for medium sized organizations, still others for large entities. Other targeted interventions are in place for high-risk patients…”
One last thing. SGFC Santorum also doesn’t believe in evolution.
Oh my.

Mitt Romney’s comment ” I like to be able to fire people” has been turned against him by his GOP Presidential candidate opponents, with Gingrich and Rick Perry (remember him?) using it to illustrate Romney’s “out of touchiness” with regular Americans.
Of course they’re taking it way out of context. All who try to beat Romney will – a time-tested way to win is to use your opponent’s words against her/him; if he makes it thru as the GOP Presidential candidate, expect the Dems to feature that prominently in key states.
But there’s a deeper message here – yes, Mitt is out of touch – but no, not for the reasons cited by his opponents.
Romney clearly doesn’t understand that most of us can’t fire our insurance companies. A piece in the Columbia Journalism Review makes this point: Can you really fire your insurance company? The answer is that it’s darn difficult even in Massachusetts–the land of Romneycare.
For those covered by large employer or union plans, what you’ve got is what you’ve got – and if we don’t like it that’s too bad. Of course, many large employers offer several choices, so these folks have better options than those of us who don’t work for large employers – which happens to be most of us.
If your coverage is thru a small employer, your selection is most likely limited to one plan. While your employer probably shops the plan every few years, the only one who can “fire” his/her insurer is the employer. And that supposes the insurer doesn’t fire the employer first by raising rates to the point where the employer has to move to another health plan.
Those of us (that includes your faithful scribe) who get their coverage thru the individual market face even more limited choices (depending on where you live). If your health status changes while insured, it will be very tough for you to get a new insurer to take you on – and if they do, expect to pay a lot more for a plan that doesn’t cover your pre-existing conditions for some period of time (how long that period lasts depends on your state).
The net? While we’d all love to be able to fire our insurance company, most of us can’t.
And under Mitt’s health reform plan (such as it is), your ability to get coverage would be even more limited.
Of course, Mitt may have been paying a compliment to his potential opponent in the fall Presidential race – under PPACA (health reform), individuals can fire their insurance company, small employers may well have more choice (and the cost of that insurance will be less for many employers).
What does this mean for you?
Mitt is definitely out of touch – we can’t fire our insurance companies, but they sure can fire us.
There’s lots more detail on Federal limits on pre-ex here.

There’s been one consistent finding among all the polls and surveys seeking opinions on health reform: most respondents don’t know much about it and there are many misperceptions and misconceptions about reform.
The good folk at Kaiser Family Foundation have put together an interactive tool to help remedy that situation. The YouToon application shows how reform will impact employers – large, small, and mid-sized; individuals and families, the well-off, middle class, and poor.
It’s easy to understand and a quick read too.
There’s a more “you-specific” tool here that is focused on individuals and families, not employers.
And the Washington Post has an interactive site where you can plug in details on income, family size, source of insurance, and marriage status and get specific info on how reform affects you – specifically – and what, if any, tax impact it has.

It looks like Congress may well include a two-year fix for Medicare physician reimbursement in a sort-of catch-all bill focused on extending the payroll tax cut.
At least that’s the way it looks this morning.
The Medicare SGR formula/process was first implemented in 2000, intended to establish an annual budget for Medicare’s physician expenses and thereby better control what had been steadily increasing costs. Each year, if the total amount spent on physician care by Medicare exceeded a cap, the reimbursement rate per procedure for the following year would be adjusted downward.
And for ten of the last eleven years, reimbursement – according to SGR – should have been cut, but each year (except 2002) it was actually increased, albeit marginally. The result is a deficit that is now about 300 billion dollars, a deficit that we’re carrying on our books, and, by the way, is not addressed in the bill currently under consideration in Congress.
The reason the deficit is still there, and still growing, is simple – fixing SGR permanently would require acknowledging the deficit and thereby adding it to the total debt.
But not fixing SGR may well be worse, as it is a fatally flawed cost containment “approach”. The SGR attempts to use price to control cost. The complete failure of the SGR approach to control cost is patently obvious, as utilization continues to grow at rapid rates. This was a problem four years ago, and its done nothing but get worse. Not only does the RBRVS/SGR approach contribute to cost growth, it also ‘values’ procedures – doing stuff to patients – more than listening to them (I realize this is an unfair comparison, for more click here).
There is at least one Senator willing to acknowledge the accumulated deficit – Sen Jon Kyl (R AZ).; Kyl is proposing using the “savings” from ending the engagement in Iraq and Afghanistan to offset the accumulated deficit, thereby allowing Congress to come up with a permanent fix. Kyl’s backed repeal of SGR before, notably when he joined with Sen Majority Leader Harry Reid (D NV) to push the Super-Committee to include the fix in their work.
What does this mean for you?
Fixing SGR for two years will remove this political dynamite from the landscape till 2014 – and give some stability to provider prices based on Medicare (which applies to lots of group and workers comp contracts).

If health reform is overturned, 20% of Americans may be without coverage in 2020, yet we’ll be spending 20% of our GDP on health care.
That’s David Blumethal’s prediction in today’s New England Journal of Medicine.
Blumenthal walks thru three potential electoral scenarios: status quo with the Democrats retaining the White House and Senate (ranked as unlikely); the GOP winning the Senate, House, and the Presidency; and what may be the most likely outcome of November’s elections: President Obama re-elected with a GOP-dominated Congress.
If the GOP wins the trifecta, ACA is dead, and at least at this point, there doesn’t look to be any Republican alternative to health reform that would fill the “replace” part of the “repeal and replace” slogan. Blumenthal notes that after blasting health reform for the last several years, a GOP administration and Congress would find it difficult to then legislate a new approach.
Moreover; ” the traditional Republican approach to covering uninsured Americans [is] an individual tax credit subsidizing purchases of private health insurance funded by ending the tax exemption for employers’ contributions to employees’ health insurance. Many employers and employees oppose this idea, and it would be difficult to pass without a major political fight. Historically, Republican presidents have been reluctant to take on the political costs of comprehensive health care reform, and the last thing a new Republican president will want is to fall on the political sword that impaled his predecessor.”
So, what does this all mean?
Repealing health reform will undoubtedly lead to more people without health insurance. My best guess is we’re somewhere in the 52-53 million range now, an all-time high due to the recession and ever-higher employer premiums coupled with an individual market that is essentially closed to all but the most affluent, healthiest Americans. Without limits on medical underwriting, it will become increasingly difficult for those with pre-ex conditions to get coverage in the individual market – and in many states, the small employer market will be severely restricted as well.
Blumenthal predicts as many as 65 million Americans will be without health insurance in 2020 – eight years out. I think he’s optimistic.
As more go without insurance, cost-shifting to those with coverage will increase, driving up their premiums even faster. The vicious cycle will accelerate, and as costs rise, employers and families will drop coverage, dumping more cost onto the ever-smaller population of insureds.
I’ve been predicting family premiums will top $30,000 this decade. If ACA is repealed, that timetable will accelerate, and perhaps then America will wake up.
Then again, probably not.
Thanks To Merrill Goozner for the tip.

You know them – the friends and colleagues without work, the folks who’ve been looking for a job for months and months. Perhaps they’ve sort of dropped out of sight, embarrassed about their inability to find work. Maybe you stay in touch, passing on leads and dropping an email or call occasionally to check in.
Or this might be you; laid off from what looked to be a solid job, terminated as a result of a corporate directive or faceless superior’s decision or lack of business or tax revenue.
Whether it’s personal or professional, there’s something very different about this economic recovery. Just beneath the surface of the Occupy Wall Street and Tea Party movements is a palpable fear, a desperate sense that “I could be next”. This isn’t about assigning blame or lamenting missed opportunities or decrying failed economic policies, it’s about trying to understand what’s happening, why, and what we can do.
Because there’s something structural going on, something much deeper than we’ve been able to explain.
We know there are far more people looking for work than jobs available for workers – according to WCRI’s Rick Victor the total number of jobs we’re going to create over the next decade is about 3.5 million, matched against around 25 million potential workers. Between the newly unemployed (a declining number, thank goodness), the long-term under-employed (those working fewer hours or at part time jobs and/or for lower wages), and long-term unemployed (those out of work for six months or more) and those with some partial disability that prevents them from working at their past position and limits their attractiveness to new employers, the population without work today totals around 15 million.
While I’m far from a labor economist, there are a few trends I’ve been following that provide some insight into what’s happening.
1. State and municipal workforces are declining, disproportionally hitting minorities and removing “middle class” jobs with excellent benefits from the available supply. This trend is well-established, having begun in mid-2008.
2. Construction – especially housing construction – continues to suffer, and will likely not recover. As people move from exurbs into close-in suburbs and back to cities, there’s little demand for – and a huge oversupply of – single family tract homes.
3. Increasing automation – in the name of efficiency and higher quality in manufacturing – has sucked huge numbers of jobs out of the economy (Five million over the last decade alone, driven in large part by automation). Factories that used to need hundreds of workers now need a few dozen, and the jobs that are gone are usually at the middle skill levels – above laborer but below highly skilled machine operator.
4. A woefully low level of investment in infrastructure – whether it be new or maintaining existing transportation, energy supply and communications – means there are few jobs for out-of-work construction workers, and low demand for machines and materials needed to build and maintain infrastructure.
A deeper discussion of trends and a utopian vision of a solution comes from a well-regarded sociologist, Herbert Gans, who writes “the current jobless recovery, and the concurrent failure to create enough new jobs, is breeding a new and growing surplus pool. And some in this pool are in danger of becoming superfluous, likely never to work again.”
So, what does this mean for health care?
Well, if you don’t have a job, you aren’t going to have employer-based health insurance. And you probably can’t afford COBRA, so you are likely going to either a) go without insurance, or b) enroll in Medicaid. If it’s ‘a’, then if and when you need health care, the providers are going to have to charge others more to pay for your needs.
If it’s ‘b’, then taxpayers are going to have to pay more for your care, while providers are going to charge other payers more to make up for the shortfall between what it costs to provide that care and what Medicaid pays (it’s not this simple but close).
If you’re an injured worker due to an occupational injury, it is going to be hard to find a new job – which will add cost due to an extended disability duration.
I’m no Luddite, but I am a realist. Unless we get our economy moving – which will require heavy investment in infrastructure – we aren’t going to see much improvement in employment over the near to mid term.