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ACA Agonistes
GOP Makes First Move Against Obamacare

The Republican Party’s first Affordable Care Act legislation since its midterm victory has passed the House, but its future is uncertain. The “Save American Workers Act,” which sailed through with 252 votes to 172, is designed to do something that at first seems fairly simple. The Affordable Care Act includes a requirement that employers who have more than 50 employees are required to provide health care to their full-time employees. For the purposes of the law, however, “full-time” counts as 30 hours a week or more—a standard different than that used elsewhere, where employees have to work 40 hours a week to count as “full-time.”

The GOP act proposes to change that standard to the 40 hour one, not only to bring the ACA in line with other norms but also to prevent employers from cutting their workers’ hours to less than 30 in order to avoid the cost of providing them with insurance (referred to as “creating 29ers”). But as the NYT reports, things aren’t so clear:

But many economists, including Congress’s official scorekeeper, see it differently. This week, the Congressional Budget Office said the legislation would prompt 1 million people to be dropped from employer coverage, pushing from 500,000 to 1 million people onto government insurance and increasing the number with no insurance by hundreds of thousands. That would raise federal spending by $53.2 billion over the next decade. […]

At issue is how far employers would go to avoid mandated coverage. More than half of all workers maintain at least a 40-hour workweek. Far fewer work only 30 hours a week. Budget office experts and other economists say that in a strengthening labor market, few employers would cut worker hours from 40 a week to 29, but many would be willing to cut them to 39 from 40. That means raising the definition of a full-time worker under the health care law would put far more workers at risk.

It’s not just ACA supporters who think the GOP’s act will actually create a worse problem of “39ers” than the current 30-hour standard does with “29ers.” Yuval Levin wrote in National Review, for example, that he thinks so, too. Disagreement over these questions, including whether the 30 hour standard or the 40 hour standard will do more damage to worker hours, is likely to define the official debate going forward, as the Senate takes up the act and President Obama stands waiting in the west wing with a promised veto, should it pass.

But it’s possible there is more going on here. This change would limit the scope of the employer mandate, which is a bête noir of both parties, and so may be seen as a first step to getting rid of that mandate. It’s not clear if that’s the intention of the GOP in passing this act, but if it is, it could be the first stage of a wider campaign to destroy the mandate. If that happens, Democrats and Republicans may actually achieve a moment of bipartisan unity. But that very much remains to be seen.

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  • Andrew Allison

    Despite the fact that there’s been an enormous increase in part-time employment since the introduction of ACA, due surely in no small part to the threat of the employer mandate, “Budget office experts and other economists say that in a strengthening labor market, few employers would cut worker hours from 40 a week to 29, but many would be willing to cut them to 39 from 40.” Draw your own conclusions as to their so-called “expertise.” The conversation should be about not who employers are required to insure but the distortions resulting from doing so. Employer provided health insurance is, like ACA, subsidized by the taxpayer: neither the employer nor the employee pay tax on the employer-paid portion, and thus neither see its real cost.

  • Boritz

    The answer is rather obvious. If changing full time from 30 to 40 creates problems by covering fewer people at a higher cost then change it from 30 to 20 to make things better: more people covered at a lower cost. Come up with some data to hand to the ever nonpartisan CBO to prove this and problem solved.

    • FriendlyGoat

      The standard should have been 20 in the first place.

      (But, the CBO is no longer “non-partisan”. Dynamic scoring will render it useless.)

      • Suzyqpie

        My whole family has worked 60+ hours a weeks for decades. It is a generational work ethic that some simply can not understand. The Rich Democrat Wing (RDW™) of our family works 80+ hours per week. They are MDs from liberal academia, who are well invested in Wall Street health care company stocks.

  • teapartydoc

    So say an employer cuts someone from 40 hours to 39 hours. They are still required to get insurance, right? And their premium is going to be determined in part by income and they may be eligible for a subsidy, right? So what’s the big deal? We still have a health care system that doesn’t make any sense. Isn’t that what everyone wanted? Cloward-Piven, and all that.
    By the way: If you ever hope to see health care offered at affordable prices in a competitive market environment, you will have to wait until Medical Licensing Is Abolished.

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