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Home Affordable Care Act Studies: ACA Has No Effect on Hours Worked [UPDATE]

Studies: ACA Has No Effect on Hours Worked [UPDATE]

3 minute read
by Robert Sheen
ACA Has No Effect on Hours Worked

Shortly after the passage the Affordable Care Act (ACA), some economists predicted that the law would cause employers to slash workweeks to less than 30 hours to avoid having to offer health insurance to full-time employees.

Critics of the health law said it would negatively affect workweeks for several reasons. They said employers would reduce work hours for many of their employees to less than 30 to avoid the requirement to offer health insurance coverage.

They also noted that the ACA made insurance available to those with pre-existing conditions and at affordable costs through Medicaid or subsidized rates on Marketplace exchanges. People who had continued working only to qualify for employer-sponsored group insurance would now be able to drop out of the labor force, they said, further reducing hours worked.

But that has not happened, according to several studies on the issue.

In January 2016, we wrote about a comprehensive study reported in the journal Health Affairs that found employees working just above and just under 30 hours per week both experienced virtually no change in their workweeks during the years the ACA has been in effect.

The study analyzed data from the Current Population Survey conducted annually by the Census Bureau, along with information about state-level variations due to local economic fluctuations. They then looked at the likelihood of employees working in several hourly ranges: 35 hours and above, 30 to 34 hours, 25 to 29 hours per week, and 24 hours or less.

For all three groups, the probability of working those hours remained essentially unchanged from 2005 through 2015, bracketing the 2010 passage of the ACA, according to the study’s authors, Asako S. Moriya,Thomas M. Selde and Kosali I. Simon.

A more recent study in 2017 from the Urban Institute reviewed similar Census data from 2000 to 2016 and found similar results. The main finding of the study, conducted by Senior Fellow Bowen Garrett, was as follows:

We find no evidence to support claims that the ACA has been a job killer. Through 2016, the ACA had little to no adverse effect on employment and usual hours worked per week. For both measures, levels in 2014, 2015, and 2016 are statistically identical to our projections based on patterns existing before 2014, the year the major provisions of the ACA went into effect.

The Urban Institute found that while the ACA did not lead to widespread cutbacks in workers’ hours by employers attempting to avoid being subject to employer mandate penalties, it could be associated with a reduction in the number of hours workers chose to work.

That was consistent with the findings of the earlier study published in Health Affairs, which found that voluntary reductions in work hours occurred among workers at firms of all sizes. The researchers found that a slight increase in part-time work among older workers resulted from their decision to work fewer hours, rather than changes made by employers.

In January 2017, a summary of various studies prepared by Jean Abraham, PhD, a professor of healthcare administration at the University of Minnesota School of Public Health and researcher with the National Bureau of Economic Research, and Anne Beeson Royalty, an economics professor at the Indiana University Purdue University Indianapolis (IUPUI), was published by University of Pennsylvania’s Leonard Davis Institute of Health Economics. Having looked at the available research, the article concluded that the ACA had minimal effect on employment, hours of work and compensation.

While there is no evidence demonstrating that the ACA has made it more difficult for workers to put in their hours at work, there is ample evidence that the ACA has made significant strides in cutting the number of uninsured Americans. A recent study from the Kaiser Family Foundation showed that 16.5 million Americans, particularly low-income individuals and young adults, have either enrolled in expanded Medicaid or in new coverage options offered by the healthcare marketplace. This has resulted in an historically low rate of uninsured Americans.

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Studies: ACA Has No Effect on Hours Worked [UPDATE]
Article Name
Studies: ACA Has No Effect on Hours Worked [UPDATE]
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Some economists predicted that the Affordable Care Act would cause employers to slash workweeks to avoid having to offer health insurance to full-time employees. It turns out that didn’t happen.
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The ACA Times
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