Four Financial Implications of the Affordable Care Act
The Affordable Care Act, also known as ObamaCare is a law that literally contains thousands of pages of reforms to the healthcare and insurance industries in America. The bill aims to provide affordable and quality health insurance coverage and to control healthcare spending. The financial implications of the bill are far-reaching. There is much speculation as to what these implications will be, though most economists feel it is too soon to know. A constructive starting point for analyzing the potential financial impact of ObamaCare is to examine the possible effects on the workforce.
Creation of New Jobs in Certain Fields
Among impacts on the workforce, many economists speculate that certain careers will actually be boosted by ObamaCare. Nurse practitioners and physicians assistants will be in higher demand, as more people seek medical attention. Human resource professionals, computer technicians, medical billing coders and payroll specialists will be needed to meet new logistical demands. Whether a New York computer technician or a California medical billing specialist, many professional areas across the country may experience a boost.
Fewer People Hired Full-time
ObamaCare requires companies to provide health insurance to all full-time employees if the company has more than 50 full-timers, or pay a fine. Some economists believe that this measure will lead to more part-time employment. This might also explain some of the positive job growth numbers that we’ve seen in recent months. Most polls will count a person as employed, even if their position is just temporary or part time. With the Federal reserve taper closely tied to these employment numbers, you could see an artificially good prognosis of the economy because of the surge in part time employment. This in turn would lead to higher stock prices and bull markets. It will be interesting to see what what, if any effect this legislation has on hiring.
Reduction in Wages and Number of Hours Worked
In companies that will begin to offer coverage, the cost will likely be covered by money coming directly from wages. There is also speculation that because the law boosts coverage and benefits for low income workers, people may actually elect to leave the workforce or simply work fewer hours. Because it creates an incentive for lower wage earners to earn even less, there may be a small portion of the population that simply drops out of the workforce. Some lower income families, whose motivation to keep a job was insurance benefits, may now be eligible for government health programs, and choose to leave the workforce, or take a job elsewhere.
Mobility in the Job Market
Economists are divided on whether they believe ObamaCare will lead to more or less mobility in the job market. Critics of the bill believe that employees in bad jobs that offer coverage will stay because they are afraid they will not find another full-time position offering coverage. The White House, on the other hand, claims that the bill will facilitate job mobility because coverage is less expensive and easier to buy, so people will be less afraid to change jobs or even considering starting their own companies. If the Affordable Care Act does indeed lead to more entrepreneurship, it could be a huge boon to the Us economy, and be one of the greatest legacies of the Obama presidency. Should this be the case, we could expect a number of exciting IPO’s in the next 4 years, along with some attrition from larger corporate giants, possibly enough to lower their value over time.
Because ObamaCare is such complex legislation, it is hard to predict exactly what the financial implications will be. At this point, proponents and critics can do little more than speculate, though it is clear that these changes are bound to have far-reaching implications that affect many facets of the economy.
Share this:
Category: Health
