New estimates released Tuesday by the Congressional Budget Office say President Barack Obama's Affordable Care Act will reduce American workforce participation by the equivalent of 2 million full-time jobs in 2017, Reuters reported.
The new report has prompted Republicans to claim that the law is bad medicine for the U.S. economy.
In its latest U.S. fiscal outlook, the nonpartisan CBO said the health law would lead some workers, particularly those with lower incomes, to limit their hours to avoid losing federal subsidies that Obamacare provides to help pay for health insurance and other health care costs, Reuters reported.
The biggest impact would begin in 2017, the CBO said, because major provisions of the law will be well underway by then. The CBO said there would be smaller declines in work hours that would occur before then.
Work hours would be reduced by the equivalent of 2.5 million jobs in 2024, said the agency, which earlier predicted 800,000 fewer full-time jobs by 2021. The bottom line would be a slower rates of employment and compensation growth in the coming decade, according to the report.
Business Insider columnist Josh Barro provides some insight on why some of the ways the law will reduce work hours will be desirable. There are seven things you should know about Obamacare, jobs and the CBO estimate, he writes.
The report also lowered the estimate of first-year enrollment in the online exchanges, Politico reported. The new estimate, down from 7 million to 6 million, was "not the cataclysm many had expected during the worst early months of the website debacle," according to Politico.
The CBO's budget outlook predicts a late enrollment surge in the next couple of months. March 31 is the 2014 enrollment deadline to avoid the law's individual mandate penalty for going without coverage.
For the broader economy, the report offered some bright spots, saying the U.S. budget deficit would be a smaller than expected $514 billion in the fiscal 2014 year ending Sept. 30. That is down from a previous estimate of $560 billion and a fiscal 2013 deficit of $680 billion.
But it said sluggish economic growth and stubbornly high unemployment would cause the improvement to be short-lived.