White House: Health reform hasn't hurt jobs

The White House pushed back on Monday against allegations that healthcare reform is hurting jobs and the economy.

In fact, the restaurant industry – given by many critics as the prime example of a place where jobs and hours would be cut if employers had to provide health insurance – is adding jobs, said a senior administration official, who spoke on condition that he not be identified.

“Restaurants have had the fastest job growth among the industries, and even faster than what would be predicted by their sales growth,” said the official.

In addition, health care costs are slowing and by one measure, inflation in health care spending is the lowest it’s been in 49 years, says Council of Economic Advisers chairman Alan Krueger. And to further make its point, the White House posted a Tumblr page extolling the virtues of health reform.

The Obama administration has begun a full court press to sell health reform, whose main provisions are just beginning to come into effect. Republicans in Congress have been countering with hearings aimed at showing the legislation's shortcomings, and by making a show of voting to repeal the legislation or to prevent federal funds from being used to pay for it.

“In sum, data from across the economy – covering consumers, government, and private employers – point to the same conclusion: health care cost growth has slowed,” Krueger writes in a post on the official White House blog.

“Prices for personal consumption expenditures (PCE) on health care goods and services rose just 1.1 percent over the twelve months ending in May 2013, the slowest rate of increase in nearly 50 years,” Krueger writes. PCE includes government and consumer health spending.

The senior official said the 2010 Affordable Care Act was helping bring down these costs. The law, known widely as Obamacare, has provisions to encourage hospitals to take better care of patients so they don’t end up coming back again and again for complications.

The rate of these hospital readmissions has fallen to 17.8 percent, slightly down from 19 percent in 2010, the official said.

Spending on hospital services, nursing homes, outpatient services and drugs all grew at lower rates in the time period from March 2010 to May 2013 than in previous times going back to March of 1980, the White House said.

And, the official said, the Affordable Care Act has not hurt jobs. “If the Affordable Care Act was slowing job growth, then one would expect weaker job growth in industries that currently offer health insurance to fewer employees, since these industries will be more substantially impacted by the employer mandate,” according to the official.

“In fact, since the private sector began adding jobs in February 2010, job growth in these ‘low coverage’ industries has been faster than the rest of the private sector.”

Earlier this month, the Obama administration delayed a requirement that anyone with 50 or more workers offer health insurance to any of them working fulltime. The requirement defines full-time as 30 hours a week or more -- something constructed to make sure that employers didn’t shave a few hours off fulltime workers' weeks to avoid having to provide the coverage.

But many employers have threatened to cut both workers and their hours. The state of Virginia already has done so -- it has capped part-time workers’ hours at 29 hours a week. State officials have said it would cost more than $100 million a year to provide them all health coverage.

Restaurants, which employ many part-time and seasonal workers, would be especially affected by the law, and some restaurant executives have told Congress they will cut hours and jobs.

“I suspect there will be some isolated instances,” the Administration official said, but added there was no evidence such cases would affect the economy.

The White House also says one of the main plans of health reform – the health insurance marketplaces where people without insurance can buy coverage – are also turning out to be less pricey than critics had warned they would be.

“In 13 states that have publicly reported premiums for 2014, the average of the lowest-cost plan is nearly 20 percent below projections based on Congressional Budget Office premiums,” Krueger blogs.

“This includes New York State, which recently announced that health insurance rates in 2014 will be at least 50 percent lower, on average, than the plans currently available in the state.”