Healthcare changes could shrink labor market: CBO
The nonpartisan Congressional Budget Office said that the 5-month-old health reform package could ultimately cause workers to leave the job market, largely because of an expansion of Medicaid and federal subsidies meant to help individuals afford insurance. In an update to its economic and budgetary outlook, the CBO said that the new law would shrink the labor market by about half a percent. Under the law, Medicaid would expand to include most Americans whose income is below 138% of the federal poverty level, or $10,830 for a single person and $22,050 for a family of four. For the first time, childless adults would become eligible for the program as well. Additionally, individuals making between 138% and 400% of the federal poverty level will be eligible for tax credits to help them pay for their health coverage in a newly created insurance exchange. “The expansion of Medicaid and the availability of subsidies through the exchanges will effectively increase beneficiaries’ financial resources,” the CBO concludes.