Will Obamacare Really Kill Jobs?

Fiscal Times: “The Congressional Budget Office released a new working paper this week predicting that the Affordable Care Act will have a negative effect on the size of the U.S. labor supply over the coming decade.”

“Republican foes of Obamacare and some news organizations seized on the CBO report as evidence that the controversial health care law would eliminate or ‘kill’ 2 million jobs by 2025.”

“But the CBO isn’t looking specifically at job loss. It’s making projections about aggregate hours worked and the total number of workers who choose to stay in the workforce: ‘The labor force is projected to be about 2 million full-time-equivalent workers smaller in 2025 under the ACA than it would have been otherwise,’ the agency wrote. That is, fewer work hours will be logged and paid for, the rough equivalent of 2 million jobs. But those two things — reduced hours across the economy and total jobs — are different things. And it’s important to note that the reduction in hours worked is relative to the number of hours that would have been worked in the absence of the law; in either case, total work hours continue to grow into 2025, it’s just a matter of by how much.”

Where Americans Have the Most Student Debt

City Lab: “The collective student loan debt in America stands at $1.2 trillion. That’s ‘the second-largest class of consumer debt behind mortgages,’ according to a recent government report, and it’s growing. An analysis of this data released in September found that this amount is four times what it was 12 years ago. This year, the average student debt in the country surpassed $35,000—the highest it’s ever been in U.S. history.”

“A new interactive map takes a geographic look at the troubling trends. Built by the Washington Center for Equitable Growth, Generation Progress, and Higher Ed, Not Debt, the map tracks student loan balances, delinquency rates, and median income by zip code.”

Image Mapping Student Debt

Krugman: The U.S. Economy Doesn’t Look So Bad

Paul Krugman says “the U.S. Economy isn’t doing too badly. So what did we do right?”

“The answer, basically, is that the Fed and the White House have mostly worried about the right things. (Congress, not so much.) Their actions fell far short of what should have been done; unemployment should have come down much faster than it did. But at least they avoided taking destructive steps to fight phantoms.”

“The result of these not-so-bad policies is today’s not-so-bad economy. It’s not a great economy, by any measure: Unemployment is low, but that has a lot to do with a decline in the fraction of the population looking for work, and the weakness of wages ensures that it doesn’t feel like prosperity. Still, things could be worse.”

“Fed officials believe that the solid job growth of the past couple of years — which happened, by the way, as Obamacare, which conservatives assured us would be a job killer, went into full effect — will continue even if rates go up. I’m among those who believe that America is facing growing drag from the weakness of other economies, especially because a rising dollar is making U.S. manufacturing less competitive. But those officials could be right, in which case waiting to raise rates could mean some acceleration of inflation.”

Americans Say Health Premiums Increased in 2015

Gallup: “Nearly three in four American adults (74%) who pay all or some of their health insurance premiums say the amount they pay has gone up over the past year. This percentage is up marginally from the 67% who last year said their costs increased, but it is generally in line with what Gallup has found in yearly updates since 2003.”

Self-Reports of Cost Changes Among Adults Who Pay All or Some of Their Health Premiums

“Though Americans are still more likely to be satisfied than dissatisfied with their personal healthcare costs, the latest poll indicates they are more likely to be grappling with higher premium costs than in previous years.”

“What Americans pay for their healthcare premiums has not noticeably improved since the ACA’s implementation, and experts have stressed that a rise in premiums will continue for several years. Meanwhile, the White House contends that recent premium increases would have been larger if not for the ACA.”

Another Robust Jobs Report

“The American economy created 211,000 jobs in November, the government reported Friday, a robust showing that all but guarantees policy makers at the Federal Reserve will raise interest rates for the first time in nearly a decade when they meet this month,” the New York Times reports.

“The unemployment rate held steady at 5 percent, unchanged from October.”

Which State Works the Hardest?

Screen Shot 2015-12-04 at 8.26.20 AM

Governing: “This broad definition of work considers the amount of time people spend engaged in income-generating activities, including tasks related to work (business lunches) or time spent looking for a job. Because estimates include those not working, the reported averages are lower than they would be for only employed workers.”

The Student Debt Problem, Mapped

Vox: “The student debt problem in the US is really two problems. The first is that a college degree is more expensive than it used to be, and students are graduating with higher debt loads than ever. The second is that some students are struggling to pay back their debt.”

“When you look at individual states or metropolitan areas, you see that the zip codes with high average loan balances aren’t the same as those where delinquency is high. In fact, they’re almost reversed. Here are the loan balances around Washington, DC, where a darker color indicates a higher balance:”

Map of debt loads around Washington

And here are the delinquencies. A darker shade indicates more people are delinquent:

Map of loan delinquencies in DC metro area

“This contradiction, that the people who borrow the most in student loans often end up doing fine, makes it hard to create a sensible student loan policy. Many people think of the student loan problem as all about balances. But it’s really about the hidden, struggling borrowers, whose inability to pay back their loans can follow them for life.”

Why Do We Pay More for Prescription Drugs?

The Wall Street Journal reports its findings on its study on “international drug-cost differences and what lies behind them.”

In the case of Norway, “U.S. prices were higher for 93% of 40 top branded drugs available in both countries in the third quarter. Similar patterns appeared when U.S. prices were compared with those in England and Canada’s Ontario province. Throughout the developed world, branded prescription drugs are generally cheaper than in the U.S.”

“The upshot is Americans fund much of the global drug industry’s earnings, and its efforts to find new medicines. ‘The U.S. is responsible for the majority of profits for most large pharmaceutical companies,’ said Richard Evans, a health-care analyst at SSR LLC.”

“The government systems also are the only large drug buyers in most of these countries, giving them substantial negotiating power.”

“Medicare, the largest single U.S. payer for prescription drugs, is by law unable to negotiate pricing. For Medicare Part B, companies report the average price at which they sell medicines to doctors’ offices or to distributors that sell to doctors. By law, Medicare adds 6% to these prices before reimbursing the doctors. Beneficiaries are responsible for 20% of the cost.”

“The arrangement means Medicare is essentially forfeiting its buying power, leaving bargaining to doctors’ offices that have little negotiating heft.”

Healthcare Costs Still a Concern for Americans

Gallup: “Slightly fewer than one in three Americans (31%) say that they or a family member have put off any sort of medical treatment in the past year because of the cost. This is essentially unchanged from the 33% who said this in 2014, and the figure has remained steady for the past decade. The majority of Americans (68%) say they did not have to put off care because of the cost.”

Trend: Percentage of Americans Putting Off Medical Treatment Because of Cost

Obamacare has “provisions that are designed to limit the cost of healthcare services, but despite all these measures, a consistent third of the country say that in the past year, they or their family has had to delay medical treatment. The ACA has achieved objectives considered important by the policymakers who crafted the law — most notably, ensuring that a greater a number of Americans have medical insurance — but on this cost-related metric, its influence has not been felt.”

Americans Concerned About Health Care Costs

Gallup: Americans continue to name the cost of (22%) and access to (20%) healthcare as the most urgent health problems facing the U.S. Obesity and cancer are next on the list, cited by 15% and 14%, respectively. No other issue receives more than 2% of mentions from Americans.

Trend: Cost and Access Remain Most Commonly Named as Urgent Health Problems

The Obama administration has made a major effort to address healthcare cost and access by passing the Affordable Care Act. Since its major provisions went into effect, there has been a drop in the percentage of Americans who lack health insurance. But the law probably did not affect the healthcare situation for the large majority of Americans, most of whom get health insurance through an employer or Medicare. The percentages mentioning both cost and access are down from the later years of George W. Bush’s administration, even though they remain the top overall issues.

Is a December Rate Hike a Done Deal?

Washington Post: “The minutes of the central bank’s October meeting shed light on the lingering divisions among the Fed’s top ranks over whether to raise its key interest rate for the first-time in nearly a decade when they convene in Washington next month.”

“The documents show that most of the 17 Fed officials who participate in the debate expected that the economy would be ready for a rate hike by December. Delaying a move could increase uncertainty in financial markets, which have been scrutinizing officials’ every word for signs of when the decision might come: Investors might interpret additional delay as a sign of the central bank’s lack of confidence in the economy. Additionally, the Fed’s target rate has been at zero since 2008, and participants noted that the long period of extraordinary stimulus could be distorting the financial system.”

“In a policy statement after its October meeting, the Fed explicitly stated it could raise rates in December. The minutes show most officials believed the wording indicated they were leaning toward action but also as ‘leaving policy options open’ … Expectations that the Fed will move next month have jumped to more than 60 percent since the October meeting and a blockbuster October jobs report.”

Fewer Employers Choosing to Terminate Coverage Due to Obamacare

Forbes: “The likelihood that small employers will terminate health coverage for their workers due to the Affordable Care Act is far less likely than the ‘early days of the health reform debate,’ according to a new analysis.”

“Employee benefits consultancy Mercer … said just 7% of employers with 50 to 499 employees now say they are ‘very likely’ or ‘likely’ to terminate coverage for their workers within the next five years.”

“This is in sharp contrast to the early days of the health reform debate when employers worried the law would ad layers of bureaucracy and higher costs from various new rules and mandates. In 2013, one in five small employers, or 21%, said they were ‘very likely’ or ‘likely’ to terminate their health plans, the Mercer annual employer health survey shows. And in 2014, the likelihood of employers dropping coverage fell to 15% of these smaller employers.”

Few employers now say they will drop coverage due to issues related to the Affordable Care Act. Source: Mercer’s National Survey of Employer-Sponsored Health Plans