The AHCA Will Kill Jobs and Chill Economic Growth

The ongoing political debate over repealing the Affordable Care Act keeps me scratching my head on many fronts, one of which is the overwhelming body of evidence that the proposed replacement will cause real people to lose real jobs. The latest report on to catch my attention was an economic and employment analysis by the Commonwealth Fund and researchers at George Washington University: “The American Health Care Act: Economic and Employment Consequences for States.” It finds that by 2026 the AHCA could lead to 1 million fewer jobs than in the 2017 baseline year.

It’s important to note that the study actually anticipates a temporary uptick in jobs in 2018 that are quickly offset as the bill’s provisions that drive millions of people out of coverage kick in. Moreover, the job loss and economic impact trends are expected to continue past 2026. This is because it “appears” (the author’s can’t say definitively since the bill’s language hasn’t seen the light of day) that the Senate version of the AHCA will slow the pace of coverage losses through a longer phase out of the Medicaid expansion. This doesn’t mean that fewer than 23 million people will lose coverage as projected by the Congressional Budget Office. It just means more people will lose coverage after 2026 and jobs will continue to be lost.

There are numerous headlines out there that support these findings like the one published in Forbes earlier this year “As Obamacare Repeal Looms, Hospitals Brace for Job Losses.” You would think that the Trump administration and the majority party in Congress, which tout jobs and economic growth as key priorities, would take heed of such analyses. In particular, I wonder why the Trump administration, which has appointed a number of Goldman Sachs alumni to key positions, would not have paid attention to a March 2017 analysis by Goldman Sachs indicating that “a decline in health insurance coverage would likely be associated with a drag on health-care employment, reversing some of the increase” that occurred as the result of Obamacare subsidies.

Reaction to these and other headlines cautions that other components of the AHCA, namely repealing certain taxes, could offset the losses. So it’s important to note that the Commonwealth study accounts for both coverage-related and tax repeal changes. Notably, losses in health care employment would be so significant that they would outstrip gains in other sectors.

The study provides state-by-state analysis showing that every state will lose health care jobs while all but four states will have overall employment losses. Losses will be worse in states that expanded Medicaid and have laws that terminate the expansion if federal funding is reduced. Individual state fact sheets provide a summary of the national findings and state-level impact at a glance.

Proponents of the ACA claimed it would be a job-killer, largely because they wrongly predicted that employers would cut hours and jobs as a result of the law’s mandates. But history speaks for itself. Gains in employment in the health care sector helped pull the U.S. out of the Great Recession. A repeal of the ACA will reverse this progress, potentially pulling the country back into an economic downturn.

 

Tricia Brooks is a Research Professor at the Georgetown University McCourt School of Public Policy’s Center for Children and Families

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