John Holahan and Bowen Garrett, both of the Urban Institute, conclude the Affordable Care Act will not have a noticeable effect on net levels of employment for three reasons:
-- The law's net new expenditures are too small relative to the overall size of the U.S. economy to have much of an effect on employment.
-- The expansion of coverage through Medicaid and income-related subsidies in the exchanges would likely increase employment in the health sector, countering negative effects of Medicare payment cuts and new taxes.
-- The new law will not affect most firms, because they already provide health insurance meeting the new federal standards, or they are exempt from the new requirements because they employ fewer than 50 workers.
The authors note there are many other forces, such as monetary and fiscal policies, that are likely to have a much greater effect on future economic activity than healthcare reform.
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