Here's Why the CBO Thinks Obamacare Will Reduce Employment Among the Poor | Mother Jones:
If, for example, earning $100 in additional income means a $25
reduction in Obamacare subsidies, you're only getting $75 for your extra
work. At the margins, some people will decide that's not worth it, so
they'll forego working extra hours. That's the substitution effect. In
addition, low-income workers covered by Obamacare will have lower
medical bills. This makes them less desperate for additional money, and
might also cause them to forego working extra hours. That's the income
effect.
This is not something specific to Obamacare. It's a shortcoming in
all means-tested welfare programs. It's basically Welfare 101, and in
over half a century, no one has really figured out how to get around it.
It's something you just have to accept if you support safety net
programs for the poor.
It's worth noting, however, that health care is an exception to this rule. It doesn't have
to be means tested. If we simply had a rational national health care
system, available to everyone regardless of income, then none of this
would be an issue. There might still be a small income effect, but it
would probably be barely noticeable. Since everyone would be fully
covered no matter what, there would no high effective marginal tax rate
on the poor and no reason not to work more hours. Someday we'll get
there.