Tuesday, January 21, 2014

Fixing and "Fixing"

Commentary worth reading on the Forty Hours is Full Time Act, which Sen. Susan Collins has proposed as a partial Obamacare "fix":

The kicker is the Collins-Donnelly proposal would put millions more workers at risk. Overall, we estimate that 6.5 million employees would be immediately vulnerable to hour reductions under their proposal, nearly three times the number under current law. That's because the cost of cutting hours from 40 to 39 hours a week would be negligible for the vast majority of employers and many more employees work 40 hours a week or more compared to those who work close to 30.

By effectively eliminating the employer penalty, this proposal would also result in more people losing job-based coverage. In July, the Congressional Budget Office estimated that the one-year delay in the employer penalty would mean one million fewer Americans with job-based coverage. Half would shift into subsidized coverage through a state or federal marketplace or onto Medicaid. The other half would become uninsured.

The Collins-Donnelly plan also has important implications for the federal budget. The CBO estimates that the employer penalty will bring in $140 billion in revenue between 2014 and 2023. Little if any of this revenue will be collected if the 40-hour change is made. Meanwhile, the additional federal cost of health care for those workers suddenly without coverage through their job would add to the fiscal pain.

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