Critical Condition

Obamacare and Unemployment

This afternoon, Sens. Tom Coburn (R., Okla.) and John Barrasso (R., Wyo.) released a 27-page report entitled “Grim Diagnosis: A Check-Up on the Federal Health Law.” The piece reviews some well-known criticisms of Obamacare, especially its impact on the deficit. But the report’s point of emphasis — one that deserves broader mention — is the law’s impact on jobs and unemployment.

For example, Coburn and Barrasso point us to the Congressional Budget Office’s August economic outlook, in which the CBO estimates that the law’s Medicaid expansion and insurance subsidies will shrink the labor market by approximately one half of one percent. That is the equivalent of around 780,000 jobs: about 50 percent more than are sponsored by GM, Ford, and Chrysler combined.

Another point in the report that deserves further attention is the Ponzi scheme known as the CLASS Act, a new assisted-living entitlement that is almost certain to add hundreds of billions to the federal debt. As Sens. Coburn and Barrasso write:

CBO determined  that the “CLASS program could be subject to considerable financial risk in the future if it were unable to attract a sufficiently healthy group of enrollees.” Unfortunately, CBO also found this is a likely outcome, saying “attracting healthy enrollees could be challenging for several reasons.” Because the law requires the CLASS program to enroll all eligible individuals who apply, CBO said it is “likely that some enrollees would be people who were unable to obtain coverage in the private market because of their poor health status.” So, with a higher percentage of the CLASS program participants consisting of individuals who are sicker and more needy—and therefore cost more to care for—CBO concluded the “relatively small enrollment would increase the risk of adverse selection and could undermine the long-run stability of the program.”

I’ve posted a more extensive summary of the Coburn/Barrasso report over at Obamacare Watch.

Avik Roy is the President of the Foundation for Research on Equal Opportunity (, a non-partisan, non-profit think tank.

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