The head of the trusted Congressional Budget Office (CBO) predicted ObamaCare will drive people out of the job market. Douglas Elmendorf, in an Oct. 22 talk, called this the most significant impact of the law, which now universally leaves a bad taste in Americans’ mouths. As director of the CBO, he is Congress’s chief accountant.
In a bizarre way, Elmendorf’s conclusion that the nationalized health law will reduce the workforce jibes with the fantasy world visualized by House Speaker Nancy Pelosi (D-Calif). She suggested on May 14 that ObamaCare would let people quit work and go dancing off to play the flute or some such zany preoccupation. With her usual dazed grin, Pelosi said: “We see it as an entrepreneurial bill.” She envisioned “a bill that says to someone if you want to be creative and be a musician or whatever, you can leave your work, focus on your talent, your skills, your aspirations because you will have health care.” Whoopee!
Elmendorf explained that Americans would choose not to work because they could subsist on the generous government insurance subsidies and Medicaid payments in the health care overhaul. “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.” But, he said, “the net effect will be reduction in the supply of labor, “largely attributable to the substantial expansion of Medicaid and the provision of subsidies through the new insurance exchanges.”
The CBO chief’s talk further explained what the 2,000-plus-page law means in practical terms, according to an Oct. 26 story from CNSNews.com. He said that already this year, major insurance companies, in advance of ObamaCare’s stringent regulations, stopped offering individual health insurance policies for children. Also McDonald’s and other large companies signaled they would have to drop health care coverage for their mainly hourly workers because of mandates in the law that dictate how much of premium revenues companies can put towards administrative and other expenses. Faced with this, the Department of Health and Human Services (HHS) granted McDonald’s a waiver.
Elmendorf gave his frank talk at a conference Oct 22 sponsored by the Leonard D. Schaeffer Center for Health Policy and Economics at the University of Southern California. He said the Democrat-sponsored health law would reduce unnecessary spending on health care by insured people—but only to “a very limited extent” over the next decade. Some of the main complaints about the law, even as the bill was being written, are that it doesn’t do enough to reduce costs. He also said the new law will expand the health care sector of the economy as millions more people are expected to have insurance by 2019. And gaining insurance coverage “will increase an individual’s demand for health services by about 40 percent.”
Elmendorf disclosed that some of ObamaCare’s supposed reforms probably will not be reforms at all. Analyzing the multiple provisions that were promised to make health care more efficient and less expensive, he said there was little evidence any of them would work—leading CBO to view their potential with skepticism. “The legislation set up a number of experiments in delivery and payment systems to induce providers to offer higher-quality and lower-cost care,” he said. “However, for a number of reasons, it is unclear how successful the experiments will be. As a result, CBO projects limited savings from the experiments in delivery and payment systems during the next decade,” he said.
Elmendorf said, too, that it is doubtful that lawmakers will be able to carry out the law’s vision of slowing the growth of Medicare. “It is unclear whether such a reduction in the growth rate of [Medicare] spending could be sustained, and if so, whether it would be accomplished through greater efficiencies in the delivery of care through reductions in access to care or the quality of care.”
For the small scattering of believers in ObamaCare, they can always look back fondly on the promising words of Obama’s March 21 speech to the nation on health care. With Vice President Biden standing beside him, hands folded as if in prayer, President Obama spoke from his podium:
“Tonight, at a time when the pundits said it was no longer possible, we rose above the weight of our politics….We didn’t give in to mistrust or cynicism or to fear. Instead, we proved that we still are a people capable of doing big things and tackling our biggest challenges. We proved that this government…still works for the people.
“Most importantly, today’s vote [in the House] answers the prayers of every American who has hoped deeply for something to be done about a health care system that works for insurance companies, but not for ordinary people….It’s about every American who knows the shock of opening an envelope nd seeing that their premiums just shot up again when times are already tough enough. It’s about every parent who knows the desperation of trying to cover a child with a chronic illness only to be told ‘no’ again and again and again. It’s about every small business owner forced to chose between insuring employees and staying open for business….(Are the tears flowing yet?)
“If you don’t have insurance, this reform gives you a chance to be a part of a big purchasing pool that will give you choice and competition and cheaper prices for insurance. And it includes the largest health care tax cut for working families and small businesses in history….This reform is the right thing to do for our seniors. It makes Medicare stronger and more solvent, extending its life by almost a decade. And it’s the right thing to do for our future. It will reduce our deficit by more than $100 billion over the next decade, and more than $1 trillion in the decade after that….This is what change looks like.”
And very few people—including the Congress’s chief accountant—like the looks of it.