The "Job-Killing" Health Care Bill

January 17, 2011
Stan Duncan

I think (or at least I pray) that by now everyone knows that the respected, centrist, non-partisan (that means middle of the road, solid, not Democrat or Republican) Congressional Budget Office has scored the Health Care bill of last year and in a preliminary report, it says the bill will create jobs and decrease the budget.

And everyone knows that John Boehner, incoming Speaker of the House, has said the numbers from the centrist, non-partisan, professional budget analysts are just “their opinion” (the kind of language one uses when talking about differences of opinion on, say, why the Patriots lost to the Jets, not conclusions from professional budget analysts).

And that he and several other Representatives on January 6 (Epiphany), have released their own unbiased, objective, analysis that they call the “Budget-Busting, Job-Killing Health Care Law” (to see it, click here) which contradicts the centrist, respected, non-partisan CBO.   

Click here to see the CBO’s January 17, 2011 letter to Mr. Boehner, saying that repealing the health care bill would actually increase the budget deficit, not decrease it as he and other Republicans frequently claim.

And finally, as you probably also know, the Republicans in Congress continue to refer to it as “Job Killing Obama Care,” and have voted to repeal it in the name of saving the jobs the CBO says will not be lost by it. In fact the resolution in the House to repeal the bill was called the “Repealing the Job-Killing Health Care Law Act.” That’s not a joke. That’s the real name of a piece of legislation passed by the House of Representatives in the world’s most respected Democracy.

For what it’s worth, click here to go to the equally non-partisan “,” and see their analysis of the health care bill, and their findings that, in spite of the many claims by Republicans, the new bill will have little or no effect on jobs. They conclude that while the new law will likely lead to somewhat fewer low-wage jobs (because of the law’s requirement that firms with more than 50 workers pay a penalty if they fail to provide health coverage for their workers) on the other hand, the relatively small losses would be partly offset by gains in the health care industry.

So, how were the Republican staff people able to look at the bill and continue their claims that it will kill jobs and increase the deficit?

First was the inclusion of the so-called “Doc Fix.” That’s an issue that arose in 1999, when the formula for reimbursement of Medicare patients was changed and doctors and hospitals began to be paid so little that some of them refused to take Medicare patients. Congress has never refigured the formula, but has made a temporary “Doc Fix” every year to increase compensation. The new health care law makes the “fix” permanent. It regularizes an increase in Medicare payments at the yearly fixed level to keep from having to go back each year and pass the same measure.

According to the Boehner staff people, this fix--that simply budgets for doing what we have been doing for 11 years--is actually an increase in spending. I don’t want to sound unfriendly about this, but that is a little bit like saying that I’ve been spending about $700 for gas every year, so next year I’ll put that amount in my family budget. Then someone else accusing me of increasing my annual spending because I’ve decided to put what I am already doing in the ledger where I can monitor it.  

Second is the number of jobs that the Boehner report says will be lost is based on a bill that did not become law. They believe that the bill will result in the loss of 1.6 million jobs and they support that by citing an early analysis by the National Federation of Independent Business.[1] However, the NFIB study was written in January, 2009, and not based on the final health care bill. It looked at early versions that contained an expensive and hypothetical employer mandate that did not make it into the final law. For good or ill, the final version is not as forceful and makes allowances for companies with under fifty employees. Mr. Boehner’s report never tells us that and includes the costs of the early version of the mandate as though it had become law. It didn’t.

And, incidentally, the NFIB study also notes that even had the larger mandate become law, there would still have been an  increase in jobs from the health care bill, because of increased labor demands in the health care industry.[2] The Republican report, while citing potential job losses in the NFIB study, does not mention its discussion of increases.

Third, it cites an April, 2010, CBO study that said that start-up costs of the bill might be as high as $115 billion. They are correct. However, the new CBO study attempts to allow for that by scoring the costs and benefits over ten years, which are past the start-up costs and which brings it to the conclusion that on balance the bill will actually cut costs, not increase them. The Republican report does not acknowledge that.

Fourth, it misrepresented the CBO study's finding that the bill would reduce the number of employed. 
What the report exactly said was that, "The legislation, on net, will reduce the amount of labor used in the economy by a small amount _roughly half a percent_ primarily by reducing the amount of labor that workers choose to supply."[3a] Their point was that because of better benefits, and better health care, there could be a slight uptick of people who have been hanging onto jobs, who could now decide to retire and leave the work force. The Republicans did the math on that one half of one percent and came up with the claim that the bill would kill 650,000 jobs. No it won't. And they supported that claim by saying that they got it from the CBO report. No they didn't. A voluntary reduction in workers because they no longer have to work to keep their health care, is not the same as "killing jobs."

My suggestion is that even if you don't like the health care bill, you shouldn't lie about why.

Finally there are a couple of smaller things that are interesting. This is complicated, but the CBO accounted for the fact that if because of the bill jobs go up and income goes up (something they say will happen) then income will go up (if only slightly), and that will cause revenue to Social Security to go up. Also, if more people have health care, then eventually charges to Medicare will go down because we will have a slightly healthier society. These factors are not huge, but should be factored into the totals.

The Republican report discounted this for two reasons. First, they say that since Social Security and Medicare have already budgeted for those people, allowing for savings from not treating them would be “double-counting.”[3] If I understand that argument (and their report noted it three times) they are saying that if you budget for a certain amount, yet don’t spend the whole of that amount, it shouldn’t be counted as savings because you budgeted for it. You claimed you were going to spend it, so you can’t say it was savings when you didn’t spend it. That sounds odd, but it does seem to be what they are saying. For what it’s worth, in my defense, Paul Krugman also wrote on this, and he doesn’t understand it either.[4]   

Second, they say that if both of these things are true--that people will live longer and dip into Social Security and Medicare longer--it will therefore be an ultimate financial drag on those two programs, and that is a bad thing. We will ultimately have an older, healthier nation, but we’ll have to pay for it.

That may be true, but as a kind of soft-hearted religious liberal, I’m unsure of the point. Should we therefore not do things that will make people live longer? Being healthy in old age is a bad thing? I don’t want to evoke Jesus into a conversation with Christian Republicans, but I’m not clear on why helping people grow old healthy is wrong. Is that really a reason to repeal the health care law?

My bottom line on this topic, as it is for so many similar topics, is that we as a nation need to have a clear-eyed adult conversation about what we can do about the health care crisis that has been slowly strangling people in this nation for decades. Every year more and more people are unable to afford health care and the tab is picked up by you and me when they fall into Medicaid or emergency rooms in hospitals. But we’re not. The kind of smoke and mirrors that is being produced in the debate is insulting and demeaning and it does not represent the voice of a healthy democracy or our better angels.   

[1] Obamacare: A Budget-Busting, Job-Killing Health Care Law, January 6, 2011, p. 5.  
[2] “Small Business Effects of a National Employer Healthcare Mandate,” Michael J. Chow and Bruce D. Phillips NFIB Research Foundation, Washington, D.C. January 26, 2009, p. 20, cited at
[3] Obamacare: A Budget-Busting, Job-Killing Health Care Law, January 6, 2011, p. 13.
[3a] Ricardo Alonso-Zaldivar, "FACT CHECK: Shaky health care job loss estimate," Associated Press, Jan 18, 2011,
[4] Krugman, “The War on Logic,” New York Times (January 16, 2011),

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