The headline on the front page of the New York Times today blares that the new health bill just passed by the House "threatens the job engine" in the USA. Get it? Not only is the health bill going to leave millions to die, but it also is going to undermine the economy. It's a lose-lose situation. It's also completely Fake News.
Consider the reality of the situation. When Obamacare was passed, it put the burden on businesses with more than 50 employees to provide health insurance for their workers. That health insurance had to be Obamacare-compliant (which means expensive). The result of this so called "employers' mandate" was that across America small businesses with 30 - 50 employees became much more careful about growing and hiring more workers that might put them over the 50 mark. Companies with a few more than 50 employees started laying off workers of switching to more part time workers to replace full time ones since only full time employees counted towards the 50. Large numbers of people were affected as their jobs became part time or disappeared entirely. Creation of new jobs also slowed. That is the actual fact.
Now let's consider the new law the House passed. The employers' mandate is gone. There is no need anymore to stop growing at 50 employees. There is no need anymore for part time workers to replace full time workers. That bar to job creation is being removed. That can hardly be said to threaten the job engine in the USA.
But there's more. According to the analysis by the Congressional Budget Office, 24 million people are going to lose coverage in the next ten years under the new law. This is, to say the least, a ridiculous number, but the opponents of the law like the Times love to rely on it, so let's go with that figure. There are only eleven million policies sold on the Obamacare exchanges, and seven million people lost their policies that they had prior to Obamacare when it went into effect. Those who lost their policies were forced to buy new ones on the exchanges. That means that the net gain in policies due to Obamacare is something like four million. It's probably safe to estimate that the seven million who lost their policies due to Obamacare and then bought new ones on the exchanges will still buy policies under the new law. So of the 24 million that the CBO says will lose coverage, only four million are people buying coverage on the exchanges. Where do the other 20 million come from? The CBO says that some are people who will lose Medicaid coverage. The bulk of the losses, however, will come from people whose employers will drop health insurance as a benefit, or so says the CBO. The CBO thinks that without the employers' mandate, hundreds of thousands of businesses will drop medical coverage completely.
Does that make sense? Will all those businesses drop health insurance? First, consider the track record of the CBO. When Obamacare was passed, the same CBO predicted that roughly 22 million policies would be sold on the Obamacare exchanges this year. There were only 11 million, so the CBO was off by 100%. More important, the reasoning at the CBO was that millions more policies would be sold on the exchanges because employers across the country would cease providing health insurance to their employees. It didn't happen; employers did not drop coverage. So when the CBO once again predicts that employers will drop coverage, is there any reason to believe that they will be correct with the same prediction that proved wrong last time? NO.
But we said that we would accept the CBO's numbers, so let's figure the effect on business of insuring about 18 million fewer employees if we are to see if that threatens America's job engine. If the average cost to the employer for a health insurance policy is only $4000 per year, that means that business will save about seventy two billion dollars by dropping coverage for these workers. The actual cost is higher, but let's just stick with this lowball estimate. That's seventy two billion dollars more for American businesses. More profits will be made, so more investments will be possible. That means more economic growth. It also means that some businesses can cut their prices to compete better with foreign companies because they have to cover fewer expenses. That should translate into more sales by US companies and more economic growth. More growth means more jobs, and more demand for workers means higher pay. In other words, if the health care law functions the way the CBO projects, it will mean a big boost to America's job creation engine. It will mean more jobs and higher wages.
It is completely dishonest for the NY Times to promote the fake narrative that the new health law will reduce the number of jobs created when the opposite is true. I realize that for the Times, defeating the President and the new health law is more important than telling the truth or even trying to do so. Just remember this the next time someone tells you that the media is not fake news. Oh, yes they are.
Consider the reality of the situation. When Obamacare was passed, it put the burden on businesses with more than 50 employees to provide health insurance for their workers. That health insurance had to be Obamacare-compliant (which means expensive). The result of this so called "employers' mandate" was that across America small businesses with 30 - 50 employees became much more careful about growing and hiring more workers that might put them over the 50 mark. Companies with a few more than 50 employees started laying off workers of switching to more part time workers to replace full time ones since only full time employees counted towards the 50. Large numbers of people were affected as their jobs became part time or disappeared entirely. Creation of new jobs also slowed. That is the actual fact.
Now let's consider the new law the House passed. The employers' mandate is gone. There is no need anymore to stop growing at 50 employees. There is no need anymore for part time workers to replace full time workers. That bar to job creation is being removed. That can hardly be said to threaten the job engine in the USA.
But there's more. According to the analysis by the Congressional Budget Office, 24 million people are going to lose coverage in the next ten years under the new law. This is, to say the least, a ridiculous number, but the opponents of the law like the Times love to rely on it, so let's go with that figure. There are only eleven million policies sold on the Obamacare exchanges, and seven million people lost their policies that they had prior to Obamacare when it went into effect. Those who lost their policies were forced to buy new ones on the exchanges. That means that the net gain in policies due to Obamacare is something like four million. It's probably safe to estimate that the seven million who lost their policies due to Obamacare and then bought new ones on the exchanges will still buy policies under the new law. So of the 24 million that the CBO says will lose coverage, only four million are people buying coverage on the exchanges. Where do the other 20 million come from? The CBO says that some are people who will lose Medicaid coverage. The bulk of the losses, however, will come from people whose employers will drop health insurance as a benefit, or so says the CBO. The CBO thinks that without the employers' mandate, hundreds of thousands of businesses will drop medical coverage completely.
Does that make sense? Will all those businesses drop health insurance? First, consider the track record of the CBO. When Obamacare was passed, the same CBO predicted that roughly 22 million policies would be sold on the Obamacare exchanges this year. There were only 11 million, so the CBO was off by 100%. More important, the reasoning at the CBO was that millions more policies would be sold on the exchanges because employers across the country would cease providing health insurance to their employees. It didn't happen; employers did not drop coverage. So when the CBO once again predicts that employers will drop coverage, is there any reason to believe that they will be correct with the same prediction that proved wrong last time? NO.
But we said that we would accept the CBO's numbers, so let's figure the effect on business of insuring about 18 million fewer employees if we are to see if that threatens America's job engine. If the average cost to the employer for a health insurance policy is only $4000 per year, that means that business will save about seventy two billion dollars by dropping coverage for these workers. The actual cost is higher, but let's just stick with this lowball estimate. That's seventy two billion dollars more for American businesses. More profits will be made, so more investments will be possible. That means more economic growth. It also means that some businesses can cut their prices to compete better with foreign companies because they have to cover fewer expenses. That should translate into more sales by US companies and more economic growth. More growth means more jobs, and more demand for workers means higher pay. In other words, if the health care law functions the way the CBO projects, it will mean a big boost to America's job creation engine. It will mean more jobs and higher wages.
It is completely dishonest for the NY Times to promote the fake narrative that the new health law will reduce the number of jobs created when the opposite is true. I realize that for the Times, defeating the President and the new health law is more important than telling the truth or even trying to do so. Just remember this the next time someone tells you that the media is not fake news. Oh, yes they are.
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