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Business Insider
7 days ago
- Business
- Business Insider
Millions of Americans could pay up to $1,247 more for Affordable Care Act health insurance next year
Middle-class Americans have a new cost to worry about next year: Pricier health insurance premiums. A Biden-era policy expanding eligibility for Affordable Care Act subsidies is set to expire at the end of this year, and there doesn't seem to be much legislative appetite to extend it. Without those subsidies, out-of-pocket premium costs are set to go up by an average of 75% — imposing another financial burden on Americans and potentially leading to some opting out of coverage altogether. For some Americans, that could mean a $1,000 or more a year increase in health insurance. An analysis from the Center on Budget and Policy Priorities found that the enhanced ACA subsidies reduced net premium costs by 44% in 2024, with 93% of those enrolled in the marketplace receiving some form of premium tax credits. In 2024, around 19.3 million Americans enrolled in the marketplace received premium tax credits — the subsidy beefed up by both the American Rescue Plan and the Inflation Reduction Act. How much enrollees received depended on their income and the initial costs of their local plans. Miranda Yaver, an assistant professor of health policy and management at the University of Pittsburgh and a healthcare fellow at the left-leaning Roosevelt Institute, said that the enhanced subsidies were a "game changer" for Americans who earn too much to qualify for Medicaid, but still may struggle to make ends meet. Business Insider has reported on these workers, known as ALICE or asset-limited, income-constrained, employed. They make too much to qualify for robust assistance, but still struggle to pay their bills. "If you're piecing together some better-than-minimum-wage jobs, but still hourly jobs, this means that health insurance becomes much more accessible, and that means that you can get the care you need and not have to fear as much about getting sick," Yaver said. Subsidies expanded who was eligible for ACA health insurance Some GOP legislators have argued that the policy expanded ACA eligibility too much and offered relief to higher earners while remaining costly to the country. A CBO projection found that making the policy permanent would increase the deficit by $335 billion over the next decade and reduce revenues by $60 billion. "It is particularly concerning that, by removing the income eligibility limit, some of our nation's highest earners are now eligible for government assistance," Reps. Jason Smith and Jodey Arrington, who respectively chair the House Ways and Means Committee and House Budget Committee, wrote in a 2024 letter. "In certain areas of the country, a family making as much as $599,000 in 2023 could qualify for taxpayer-funded subsidies." Before the subsidies, only Americans earning between 100% and 400% of the federal poverty line qualified, or between $15,650 and $62,600 based on the current cutoff for a single American. That 400% limit was expanded under the new structure, meaning that some Americans with ACA coverage were newly eligible to have some premium relief, especially older beneficiaries. Those who made above the 400% line, but were spending over 8.5% of their household income on premiums, became eligible for subsidies. Christen Young, a visiting fellow at the Brookings Institution's Center on Health Policy, said that those newly eligible Americans saw savings of around $10,000 to $15,000 a year on their premiums. "Those are the people who are facing particularly large increases in premiums when these enhancements expire," Young said. A 2024 KFF analysis found, for instance, that Americans making $40,000, or 266% of the federal poverty line, could see their annual premiums increase by $1,247 annually. "If you take a single parent of one child earning $50,000 a year, that family is saving about $1,700 because of the enhanced premiums. They're going to see their premium increase by about 80% next year when the subsidy enhancements go away," Young said. "A family of four with a household income of $130,000, they're saving $8,000 a year with these enhancements, and they'll see their yearly premium increase by about 60 to 70% next year." When health insurance costs go up, healthy young people tend to drop coverage With the expiration looming at the end of the year and premiums expected to rise, many younger and healthier Americans may decide to opt out of coverage. This could, in turn, raise costs even more for those who remain on ACA plans. Without that younger and healthier group, it becomes more expensive to insure the remaining Americans, and costs go up across the board. "It's insurance companies correcting for the fact that the people who are going to be enrolled in their plans will probably not be as healthy," Yaver said. A projection from the nonpartisan Congressional Budget Office found that should the measures lapse, 4.2 million more Americans would be uninsured by 2034. "One of the things that is really critical to health insurance is being able to essentially spread the risk of insuring people so that we can essentially bring younger and healthier people into the insured population," Yaver said. There is a possibility that Congress could step in and extend the subsidies, although that looks unlikely, as it would have to have bipartisan approval. The potential end of the subsidies also comes as Americans face a mixed economy: The labor market is seeing shifts, but still chugging along. Inflation is creeping higher, and consumer sentiment is looking dreary — albeit not as low as it has been. "The average American would have a very difficult time accommodating an unexpected $1,000 expense. That could be a medical, dental expense, home repair, car repair, you name it," Yaver said. "It's very easy to end up spending a thousand dollars in the American healthcare system."
Yahoo
19-06-2025
- Business
- Yahoo
'We Know For A Fact It's Not AI,' Experts Explain Slowdown In White Collar Hiring
For the past two years, hiring in professional and business services roles— more commonly referred to as "white collar" jobs— has been slow. The Bureau of Labor Statistics reports that in May, hiring in the sector declined by 0.1%. Economists told CNBC that the shrinkage was not because of AI, like many people assume, but because of structural issues in the economy. "We know for a fact that it's not AI," Roosevelt Institute director Alí Bustamante said. Don't Miss: Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — Peter Thiel turned $1,700 into $5 billion—now accredited investors are eyeing this software company with similar breakout potential. Learn how you can Cory Stahle, an economist at Indeed, agrees. "This is more of an economic story and less of an AI disruption story, at least so far," told CNBC. Experts point to the fact that the decline in job creation has been an issue for several years, and began in a time when AI technology wasn't all that effective, as the primary reason that AI isn't behind the slowdown, according to CNBC. Additionally, Stahle told CNBC that the technology is still in its early stages and can't yet execute certain tasks without human intervention. A 2024 report by Indeed found that AI is more likely to support white collar workers than to replace them. Of the 2,800 skills evaluated in the report, only 28.5% were deemed fully replaceable by generative AI, and only if the technology improved quite a bit. Meanwhile, 68.7% of the work skills were deemed "very unlikely" or "unlikely" to be replaced by generative AI, as they require too much of a human touch. Trending: Maximize saving for your retirement and cut down on taxes: . "We might get to a point where [AI replaces human workers], but right now, that's not necessarily looking like it's a big factor," Stahle told CNBC. In fact, the World Economic Forum's Future of Jobs Report 2025 forecasts that AI will create 170 million new jobs by 2030. That number amounts to 14% of total current employment, and would go a long way in offsetting the 92 million jobs that could be displaced by AI. Stahle urges white collar workers whose skills may overlap with AI and who could potentially be displaced by it to learn how to use the technology to stay ahead. "Certainly, jobs are going to transform," he told CNBC. "I'm not going to downplay the potential impacts of AI." Read Next: Here's what Americans think you need to be considered wealthy. These five entrepreneurs are worth $223 billion – Image: Shutterstock Up Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market. Get the latest stock analysis from Benzinga? APPLE (AAPL): Free Stock Analysis Report TESLA (TSLA): Free Stock Analysis Report This article 'We Know For A Fact It's Not AI,' Experts Explain Slowdown In White Collar Hiring originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Sign in to access your portfolio
CNBC
13-06-2025
- Business
- CNBC
‘White collar' jobs are down — but don't blame AI yet, economists say
While there hasn't been much hiring for so-called "white collar" jobs, the contraction is not because of artificial intelligence, economists say. At least, not yet. Professional and business services, the industry that represents white-collar roles and middle and upper-class, educated workers, hasn't experienced much hiring activity over the past two years. In May, job growth in professional and business services declined to -0.4%, slightly down from -0.2% in April, according to the Bureau of Labor Statistics. In other words, the sector has been losing job opportunities, according to Cory Stahle, an economist at job search site Indeed. Meanwhile, industries like health care, construction and manufacturing have seen more job creation. In May, nearly half of the job growth came from health care, which added 62,000 jobs, the bureau found. More from Personal Finance:Here's what's happening with unemployed Americans — in five chartsThe pros and cons of a $1,000 baby bonus in 'Trump Accounts'Social Security cost-of-living adjustment may be 2.5% in 2026 However, economists have said that the decline in white-collar job openings is more driven by structural issues in the economy rather than artificial intelligence technology taking people's jobs. "We know for a fact that it's not AI," said Alí Bustamante, an economist and director at the Roosevelt Institute, a liberal think tank. Indeed's Stahle agreed: "This is more of an economic story and less of an AI disruption story, at least so far." There are a few reasons AI is not behind the declining job creation in white-collar sectors, according to economists. For one, the decline in job creation has been happening for years, Bustamante said. In that timeframe, AI technology "was pretty awful," he said. What's more, the technology is even now still in early stages, to the point where the software cannot execute key skills without human intervention, said Stahle. A 2024 report by Indeed researchers found that of the more than 2,800 unique work skills identified, none are "very likely" to be replaced by generative artificial intelligence. GenAI creates content like text or images based on existing data. Across five scenarios — "very unlikely," "unlikely," "possible," "likely" and "very likely" — about 68.7% of skills were either "very unlikely" or "unlikely" to be replaced by GenAI technology, the site found. "We might get to a point where they do, but right now, that's not necessarily looking like it's a big factor," Stahle said. While AI has yet to replace human workers, there may come a time where the technology does disrupt the labor force. "Certainly, jobs are going to transform," Stahle said. "I'm not going to downplay the potential impacts of AI." Stahle said that openings for consulting jobs focused on implementing generative AI have been rising. Over the past year, management consulting roles with AI language accounted for 12.4% of GenAI postings, showing signs of growing demand, per a February report by Indeed. A separate report by the World Economic Forum in January forecasts that by 2030, the new technology will create 170 million new jobs, or 14% of the current total employment. However, that growth could be offset by the decline in existing roles. The report cites that about 92 million jobs, or 8% of the current total employment, could be displaced by AI technology. For knowledge-based workers whose skills may overlap with AI, consider investing in developing skills on how to use AI technology to stay ahead, Stahle said.
CNBC
11-06-2025
- Business
- CNBC
Here's what's happening with unemployed Americans — in five charts
While the unemployment rate in the U.S. is still fairly low, data shows it's not uncommon to see individuals job hunting for extended periods of time. The unemployment rate remained flat at 4.2% in May, the Bureau of Labor Statistics reported Friday. However, over the past six months, it's become "drastically harder to find a job," whether you're entering the job market for the first time or you've been looking for a while, according to Alí Bustamante, an economist and director at the Roosevelt Institute, a liberal think tank. "It's not that folks are losing their jobs," Bustamante said. "It's just that businesses are much more reticent to hire people, to make investments, because they just feel this very uncertain economic climate." More from Personal Finance:Millions of Americans would lose health insurance under House GOP megabillCheck your home insurance ahead of an 'above normal' hurricane season401(k) balances drop due to market volatility: Fidelity Bustamante and other economists say several data points beyond the headline job market numbers — the job-finding and quits rates, the share of workers who have been unemployed for 27 weeks or more, a broader rate of unemployment and the state of so-called "white collar" jobs — showcase deeper issues within the labor market. "Employers aren't hiring, they're not firing. People aren't leaving their jobs, and there's just fewer opportunities right now," said Cory Stahle, an economist at Indeed, a job search site. As career coach Mandi Woodruff-Santos put it during a recent interview with CNBC: "The job market is kind of trash right now." Here's what's happening with unemployed Americans, in five charts. The job-finding rate reflects the share of unemployed workers who successfully found a job, Stahle said. Over the past few years, the job-finding rate for unemployment has been declining, he said. In other words, people who are looking for work are not finding jobs, Stahle said. On the flip side, the quits rate reflects the share of employees who have left their jobs in a given month, Stahle said. That figure has also been declining, meaning people are not voluntarily leaving their jobs. The quits rate was at 2.0% in April, little changed from 2.1% in March, both numbers seasonally adjusted, according to the latest Job Openings and Labor Turnover report by the Bureau of Labor Statistics. The number of quits was down by 220,000 over the year. Hiring activity has also been down in recent years. The rate of hires was at 3.5% in April, little changed from 3.4% in March, both seasonally adjusted, per the JOLTs report. As people stay put in their jobs and employers are reluctant to hire, such factors create a "low hiring, low firing" environment, Stahle said. The number of long-term unemployed workers dropped in the bureau's latest report. However, not only is the rate still high, the recent drop could also be a red flag, Bustamente said. The share of unemployed workers facing long-term unemployment — those who have been jobless for at least 27 weeks — was a seasonally adjusted 20.4% in May, according to the bureau's latest data. That's down from a seasonally adjusted 23.5% in April. But the recent decline may not be an improvement. It could be signaling that a large number of long-term unemployed workers left the labor force altogether, he said. Considering that 139,000 jobs were added in May and about 218,000 workers are no longer in the unemployment cohort, there's a significant gap of workers who were unemployed but did not secure new roles, Bustamante said. What's more, the number of people not in the labor force jumped by 622,000 in May. "All the data point to long-term unemployment declining because people left the labor force," Bustamante said. While the headline unemployment rate — also known as the U-3 rate — has remained steady, another measure shows a clearer picture of what's happening with unemployed workers still looking for jobs, experts say. The U-6 rate includes the total number of unemployed workers, plus all marginally attached workers, and the total employed part time for economic reasons. Marginally attached workers are those who are neither working nor looking for a job — but indicate that they want and are available for work, and looked for a new role recently. There's a subset of this group called discouraged workers, or those who are not currently looking for a job due to labor-market reasons. People employed part time for economic reasons are those who want and are available for full-time work but settled for a part-time schedule. As of the latest BLS data, the U-6 rate remained unchanged from April at 7.8%. This data tells us that more and more Americans have either stopped looking for work out of labor-market frustrations, or are picking up part-time gigs to get by financially, experts say. When looking at professional and business services — the industry that represents "white collar," and middle and upper-class, educated workers — there hasn't been much hiring, experts say. Fields such as marketing, software development, data analytics and data science have far fewer opportunities now than they did before the pandemic, Stahle said. On the other hand, industries such as health care, construction and manufacturing have seen consistent job growth. Nearly half of the job growth came from health care, which added 62,000 jobs in May, the bureau found. "There's been a divergence in opportunity," Stahle said. "Your experience with the labor market is going to depend largely on the type of work it is you're doing."
Boston Globe
20-05-2025
- Business
- Boston Globe
Trump scolded companies for raising prices. Do they have a choice?
'Fundamentally, what we're seeing in both instances is that the president makes a policy mistake, that policy mistake leads to an increase in consumer prices and the president who made the policy mistake is blaming the businesses,' said Michael Strain, an economist at the right-leaning American Enterprise Institute. Advertisement In the case of Trump's tariffs, which are set at 30 percent on Chinese imports until mid-August, the effects will reverberate across the economy, either pushing up prices for consumers or, if companies do absorb some of the costs, lowering profits for businesses. Those responses could drive inflation, slow growth and raise unemployment. Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up Yet while mainstream economists are generally in agreement that there is nothing unseemly about raising prices when companies' costs spike, that view is hardly universal outside the profession. A variety of populist-minded thinkers across the political spectrum think that there may be grounds for concern about price gouging, and that Trump wasn't necessarily wrong to call out companies for raising prices. 'I'm not here to tell you whether he's right about certain industries,' said Elizabeth Wilkins, the president of the Roosevelt Institute, a liberal think tank. 'But the basic idea that companies have more pricing power than we believe that they did is something we should interrogate.' Advertisement Trump suggested that Walmart use its billions in profits from last year -- 'far more than expected,' he wrote on his platform Truth Social on Saturday -- to cushion consumers against price increases. But the size of a company's profits has little effect on its decision to raise prices, said Chad Syverson, an economist at the University of Chicago. Most companies want to preserve their profits whether they are large or small, because failing to do so would incur the wrath of their owners or shareholders, some of whom are pension funds and small-time investors. They pass along price increases to consumers instead. Pricing decisions come down to factors other than profitability, like how much competition companies face and how sensitive consumers are to price increases. If you splurge on a latte only now and then, you may balk when the coffee shop raises prices. If you can't live without your daily caffeine and sugar hit, you may suck it up and pay the higher amount. And if, in some cases, companies increase prices by even more than the jump in their costs, that doesn't necessarily reflect nefarious behavior, said Alexander MacKay, an economist at the University of Virginia. It may reflect the fact that consumers are no longer as turned off by price increases. This appeared to happen during the pandemic, when some companies raised prices by a small initial amount in response to higher costs. Companies that saw little drop in demand often continued to raise their prices. Advertisement Jared Bernstein, who served as Biden's top White House economist, said many consumers during the pandemic were less deterred than usual by price increases because they were flush from a series of government cash infusions. But, Bernstein added, those idiosyncratic circumstances have largely disappeared, so firms are likely to be more restrained in raising prices in response to Trump's tariffs as a way to bolster profits. He said he still expected them to pass along cost increases, however. Populist critics of mainstream economics see companies' pricing decisions much more cynically. Oren Cass, a former Republican policy aide, said in an email that a large company like Walmart had far more influence over its prices than it let on. 'If Walmart were to simply adopt a policy that 'we will not change our prices in response to the tariffs,' there would be some situations where suppliers ate the costs, some where suppliers shifted to other sources of supply to avoid the tariffs, and some where Walmart accepted lower margins,' said Cass, whose think tank, American Compass, pushes Republicans to adopt more worker-friendly policies. Walmart argues that its options are still limited. In an interview with CNBC last week, Walmart's chief financial officer, John David Rainey, said that the company is 'well equipped' to navigate price increases of 2 percent or 3 percent but not a tariff of 30 percent, the current rate on goods from China. Rainey added that Walmart would in fact absorb some of the cost increases. Nick Iacovella, executive vice president of the Coalition for a Prosperous America, which has advised the Biden and Trump administrations on efforts to expand domestic manufacturing, noted a dubious logic to price-setting by companies: An automaker will scream about the need to raise prices when costs increase, but when an automaker takes advantage of a trade deal to shift production to Mexico, it rarely passes the savings along to consumers. Advertisement 'Can you tell me what car they lowered the price for when they saved all that money?' said Iacovella, a former Senate aide to Secretary of State Marco Rubio. 'The answer is none.' On the left, Wilkins of the Roosevelt Institute argued that large companies do not merely raise prices when their costs increase, or when shoppers become willing to pay more. She said companies sometimes exploit widespread concerns about inflation to actively manipulate prices. In a competitive industry, she said, a company should be reluctant to announce a price increase, for fear that other companies would undercut it. But in a market with only a few actors, a large company might signal its intention to raise prices on an earnings call as a way to encourage other large companies to follow suit. 'It's not explicit collusion, but you can kind of throw those one-sided invitations out there,' said Wilkins, a former chief of staff to Lina Khan, Biden's head of the Federal Trade Commission, who considered looking into these practices. MacKay, the University of Virginia economist, conceded that this sort of coordination was possible. He pointed to a recent study arguing that airline industry executives have effectively coordinated to reduce seats on competitive routes by telegraphing their intentions during earnings calls. But MacKay wasn't entirely convinced. 'Executives need to make disclosures about what they're doing as a public company,' he said. 'Often when firms face common industrywide trends, they're making similar decisions. So it's hard to say conclusively.' Advertisement This article originally appeared in .
