Another Failed Obamacare Promise: The Continuing “Job Lock” Problem

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Oops! It seems Barack Obama did it again. He made another healthcare promise he didn’t keep.

I know: You’re shocked. Am I? Not at all.

Healing the Economy Through Health Care—or Not

Remember way back in 2009 when Obama was pushing health care reform while the country languished through its worst financial crisis in years? Obama sold the country on socialized medicine—the last thing a country teetering on the edge of bankruptcy needs—by arguing that health care reform was economic reform. He promised that the Affordable Care Act would “build a new foundation for lasting and sustained growth.” One of the ways that health care reform would give a much-needed boost to the economy, Obama promised, was by ending what is known as “job lock.”


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Job Lock

First, a little background: Why do economists worry about job lock, anyway? More importantly, what is job lock?

I’m glad you asked.

Job lock is the phenomenon whereby individuals who receive their health insurance through their employers are afraid to leave their jobs out of fear of losing their health insurance. Those employees are literally “locked in” their jobs by their health insurance needs. Where employees are afraid to leave dead-end jobs for better jobs or, more importantly, to start their own businesses, they are less productive than they could otherwise be.

Growth in American productivity, in turn, is widely assumed to be necessary in order for American workers, as a whole, to see their wages rise. Indeed, this lack of productivity growth is one of the fundamental problems keeping the United States economy stagnant. For that reason, insurance-related job lock is seen as a major impediment to American economic prosperity—so much so that it is acknowledged as a pressing concern by politicians on both sides of the aisle.


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Unkept Promises

In 2009, the newly elected President Obama campaigned for the Affordable Care Act before a skeptical American public. In his characteristic eloquent style, Obama stood confidently before hopeful crowds flush with the promise of exceptional but free care. He spoke eloquently of health care as a human right, not a privilege. He told the stories of ostensible victims of the vicious healthcare system that routinely brought attendees to tears. He told of the horrors of the insurance industry, drug manufacturers, physicians like me, . . . everyone except the government—his government.

In an attempt to appear to reach across the aisle while doing nothing of the sort, Obama made a show of good will for his recently vanquished presidential opponent, Republican Senator John McCain. Obama magnanimously cited research from the conservative Heritage Foundation praising McCain’s 2008 health reform plan and its proposed ability to solve the job lock problem by offering tax credits to employees so they could afford to buy health insurance on the private market. While the details under Obamacare differed (and who has time for details?), Obama confidently promised the same outcome. As a result, Obama argued, American workers would feel free to leave unfulfilling and unproductive jobs, because they would “own” their health insurance coverage and could take it with them to a new, more fulfilling, and more productive job.

The American public could almost hear the cha-ching-punctuated purring of a humming, happy economy.

Curing job lock was the first step to economic utopia. Upon that both parties agreed. Obama had a point. The problem was, he had no power to deliver on his grand promise. To the contrary, the Affordable Care Act promised not relief, but exacerbation of the problem of job lock. And the American public was supremely uninterested in the boring details. And so they fell for Obama’s empty promises—as they say, hook, line, and syringe. Or something like that.



The Final Analysis

Now, over seven years later, as Obama prepares to leave the White House, we can chalk Obama’s pledge to end job lock up as another promise eloquently made but not kept.

According to a new study by the nonpartisan National Bureau of Economic Research (NBER), Obamacare has done nothing to solve the problem of job lock.

NBER economists recently studied states that expanded their Medicaid programs under the ACA. They found no evidence that there was a reduction in job lock in those states as a result.

What they did find was something completely predictable—and damning to Obamacare:

New Medicaid enrollees exceeded expectations. That is a problem, because those individuals require taxpayer subsidies, some to the tune of 100% of their Obamacare premiums. And they are likely—make that certain—to require continuing subsidies in the future. To make matters worse, many of them are the sickest of the sick and already need long-postponed—and very expensive—care. And Obamacare says they can have it, after the fact, for free.

It gets worse: While the number of new Medicaid enrollees exceeded expectations, the enrollment of middle-class, working, taxpaying Americans fell far short of expectations—according to one recent study, by more than one-half.

Economic Death Spiral

Obamacare, it seems, suffers from the most devastating economic malady of all: one-way cash flow. All of the Obamacare cash—heck, all of the healthcare cash—is destined to flow out to those who contribute nothing. At the same time, those who do contribute get nothing for their good deeds. And so they opt out. And the money stops flowing in. And there is nothing that Obama or anyone else can do to revive the dying patient.

As it turns out, you don’t have to have a degree in economics—or even be that interested in the boring details—to understand that this represents an economic death spiral.

The insurance industry’s reaction has been equally predictable: One by one, they are throwing in the towel and exiting the Obamacare exchanges. Despite the fact that they supported the law and were instrumental to its passage. Despite the fact that they knew these very losses would occur, and why. Despite the fact that they have already received their cash bailout, which was baked into the Obamacare pie.

So much for ending job lock. Now, we have both job lock and “disease lock.” Because the chances of your navigating these choppy waters without subjugating your interests to those of the federal government, and the Wall Street and insurance fat cats with whom they share both a bed and a lifeboat, are slim to none—nonexistent, really.

Welcome to Obamacare. I’m sure you’re going to hate it.

Those are my thoughts. Please let me know yours.




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Rhonda M. Moorman, M.D., J.D.

Rhonda M. Moorman, M.D., J.D. is a physician and attorney who attended the Harvard Law School with Barack Obama. Currently, Dr. Moorman lives and practices both medicine and law in her home state of Georgia. In medicine, she specializes in emergency and primary care in some of Georgia's most rural communities. In law, she represents primarily individuals, physicians, and healthcare facilities in matters involving medical malpractice and healthcare oversight and regulation. Dr. Moorman also serves as President and CEO of Moorman Media, LLC. She recently published her first book, entitled Mr. Obama and Me: My Classmate, Our President, and the Fight for Your Health. Copies may be purchased at Dr. Moorman also hosts "The Dr. Rhonda Moorman Show - MedLaw Talk" every Wednesday from 6:00-7:00 PM EST on WDDQ Talk 92.1 FM and Red Nation Rising Radio's Justice Channel, with replays on Red Nation Rising every Saturday from 4:00-5:00 PM EST. You may contact Dr. Moorman on Facebook (rhonda.moorman.56, #MoormanMedia), follow her on Twitter (@DrRhondaMoorman), or email her directly at She welcomes your feedback.