2.5 Million New Prospects!

Who would’ve thought the Congressional Budget Office could be the center of so much attention? Ever since the non-partisan government agency released  a report on February 4th about the outlook for the budget and the economy, lawmakers on both sides of the aisle have been playing the “what does it mean?” game, trying hard to spin it in their favor, of course.

The reason for all the attention? Well, in the report, the CBO estimates that 2.5 million Americans will leave the workforce over the next ten years as a result of the Affordable Care Act. This, of course, sparked a debate between Democrats and Republicans about whether the CBO’s prediction was a good thing or a bad thing for the country.

Obviously annoyed by all of the questions about what the report meant, the CBO released a list of Frequently Asked Questions on Monday, February 10th.

The FAQs begin with the question “Will 2.5 Million People Lose Their Jobs in 2024 Because of the ACA?” The CBO’s answer: No, we would not describe our estimates in that way.

The report goes on to explain that most of these full-time workers will be leaving the workforce voluntarily, so in the CBO’s opinion, this is a good thing. Here’s how they describe it:

Here’s a useful way to think about the choice of wording: When firms do not have enough business and decide to lay people off, the people who are laid off are generally worse off and are therefore unhappy about what is happening. As a result, other people express their sympathy to those people for having “lost their jobs” due to forces beyond their control. In contrast, when the labor market is strong and people decide on their own to retire, to leave work to take care of their families, or to cut back on their hours to pursue other interests, those people presumably think they are better off (or they would not be making the voluntary choices they are making). As a result, other people are generally happy for them and do not describe them as having “lost their jobs.”

So, based on the clarification from the CBO, it appears that the Democrats may be winning this particular debate, but at HPA we see a different takeaway from the CBO report. If millions of Americans are truly leaving the workforce voluntarily because they no longer need to depend on their employer for health insurance coverage, that means that they will all be in the market for an individual health plan.

With no employer plan to stand in the way, many of these individuals will qualify for a premium tax credit. And because all plans are guaranteed issue, individuals with medical conditions should skate on through the application process.

So how can agents take advantage of the opportunity this creates? The first step is to make sure you have a solution to help these individuals purchase a qualified plan and apply for a government subsidy.

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