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Home Publications Blogs Beat the Press It Is Not Good News That Obamacare Will Create Lots of Jobs to Steer People Through the System

It Is Not Good News That Obamacare Will Create Lots of Jobs to Steer People Through the System

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Saturday, 27 July 2013 07:56

"Which way is up?" reporting makes a big-time appearance in this Washington Post article telling us that Obamacare will create a boom in jobs since workers will have to be hired to steer people through the system. The article reports:

"About 7,000 to 9,000 new customer service agents will be needed to man phones and Web chats for the marketplace, called an exchange, the federal government will run for more than half of the states, a spokesman for the Centers for Medicare and Medicaid Services said. Additional agents will be needed for exchanges run by the states themselves."

The next paragraph raises the stakes to:

"Altogether, tens of thousands of people could be hired over the next several years to set up and support the online marketplaces, according to some estimates."

Okay, let's make it three tens of thousands (a.k.a. 30,000). If we continue to create jobs at the rate of 170,000 a month (an assumption, not a forecast), then we will create 6.1 million jobs. This means that our 30,000 Obamacare jobs will be a bit less than 0.5 percent of net job creation over this period. That's a plus, but not exactly a boom.

More importantly, the jobs needed to steer people through the system are a waste from the standpoint of the economy as a whole. In an efficient system people can figure out how to get their health care without needing a consultant to guide them through a complex process. The fact that Obamacare may require people for this task means that it is adding waste to the health care system.

In a recession, anything that employs people can be seen as positive since otherwise they would sit home doing nothing. However if we envision at some point that we will be back to something resembling full employment, it would be much better to have a health care system that did not require tens of thousands of workers to explain insurance options to people. 

Comments (11)Add Comment
There's Waste and Then There's ... Waste
written by Last Mover, July 27, 2013 10:45

Amusing how the media plays up waste associated with Obamacare. If you want to see waste, real unadulerated rotten to the core abundant economic waste, just look at private sector health care insurance.

It's completely useless, adding no value at all while substracting enormous value, acting as nothing more than an extortionist middleman bill collector for health care cost at the provider level.
C'mon
written by EMichael, July 27, 2013 10:45
"In an efficient system people can figure out how to get their health care without needing a consultant to guide them through a complex process."

No. An efficient system must be able to help all of the people. Thinking that all of the "people" are capable of doing so is a little elitist.

Somehow I am think the owner of a landscape company will have little trouble working without the call center. His lowest man on the totem pole who does not even have a computer might need some help.
Adding waste?
written by Robert Hammond, July 27, 2013 10:50
Well, if you're looking at it from a glass half empty perspective, yes. I get what you're driving at (and agree), but considering how difficult navigating health care is at the present, maybe you could look at it as adding value? I'd like to think of it as a dollar diverted away from dividends and into a healthier populace.
To eliminate waste . . .
written by rrose, July 27, 2013 11:45
Wouldn't lifting the age restriction on Medicare eliminate that problem (along with a host of other problems)?
Last Mover Nailed It
written by ethan, July 27, 2013 1:22
If you are going to keep fee for service medical care, single payer is the only way to go. I would rather have my claim adjudicated by a government bureaucrat than by a corporate minion whose bonus and promotion depend on how many claim denials he can make stick.
...
written by AlanInAZ, July 27, 2013 3:35
I haven't looked at the exchanges, but I can't imagine they are more complex than the Medicare menu of choices for supplemental insurance. In AZ I was advised that the county council on aging would provide guidance which seems to be the old persons substitute for the proposed help desk. I think medical insurance choices are far too complex and virtually impossible for ordinary people to pick the optimal benefit package.
Smells Like Off-Shore Call Centers
written by Bart, July 27, 2013 4:23

Did the article say where the jobs will be created?
...
written by D. Schultz, July 28, 2013 5:47
The navigator jobs will be contract jobs; the federal government has given that contract to Serco which has said it plans on hiring 1500 people by August. The marketplace assisters will be employees of already existing non-profits or agencies in states with exchanges or partnerships with the feds; the funding for paying these employees is coming from federal grants.

As far as I can tell, there's no provision to make these jobs a permanent part of the health care 'system'. The grants are time-limited. I think the idea is that these helpers are going to smooth the transition to the new system and then people will have to rely on brokers, agents, advertising, and the information available on the federal and/or state websites.

More mud from the ConSwervatives
written by jumpinjezebel, July 28, 2013 6:08
And insight on the actual story?
http://www.nationalreview.com/corner/354556/obamacare-call-center-will-not-offer-health-care-benefits-employees-eliana-johnson
Dean who?
written by pete, July 28, 2013 8:32
First he sides with the Tea Party against crony banking capitalism in terms of Frankendodd, and now going after standard stiumulative make work. Wow. What's next, calls to repeal the minimum wage and Davis-Bacon (DB certainly similar in flavor with hiring people to do useless jobs, in the sense that DB requires the govt to over pay folks)?

Note how the GOP tried to co-opt Rand Paul and his like but he wouldn't budge, so now they (again, as they did when he was running) have to ostracize him. And the charge is that his brand of politics is like the 60s radicals! Wow. We saw what happened when they were co-opted. Fizzle....
The flywheel effect of waist...
written by Paul Carey, July 29, 2013 2:07
In general I agree with the tenor of your argument Dean. Most certainly health care costs are inflated with a financial burden as well as an unneeded marketing burden. 30% is a number I have used. Adding employees to service the market as well increases the cost of delivery. Waist on waist. Much of which would vanish in a single payer system.

But essentially, jobs are jobs. My property in Connecticut was bounded buy stone walls that were built as WPA projects. Questionable value, but building these walls was an activity that got the unemployed up in the morning and productive.

Such wasteful spending has a flywheel effect on the economy. Worthwhile reading is the "Report from Iron Mountain" wherein war spending is categorized as waist but provided the "flywheel" effect.

I had a discussion last night with a friend who hasn't had a "real" job since the crash, eking it out on partial employment and poverty level support programs. They desperately want to someone to tell them how ObamaCare is in fact affordable. Given the mandate, and the number of people in their position, 30,000 may be a drop in the bucket.

http://www.teachpeace.com/Report_from_Iron_Mountain.pdf


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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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