Repealing the Affordable Care Act may result in 2.6 million job losses in 2019.
A new analysis suggests that repealing the Affordable Care Act (ACA) may lead to significant financial losses, and the loss of millions of jobs.
With President-elect Donald Trump and Republican lawmakers moving towards repealing the ACA, many Americans fear what will happen to their health insurance, and subsequently, their health status, as a result of this action.
A repeal of the ACA would likely start with rolling back tax credits and Medicaid expansion, but there have been no announced plans for which aspects of the legislation could be eliminated and what will be saved. Despite not having a definite replacement plan, GOP lawmakers are still pushing forward with the repeal.
Healthcare comprises a large portion of the country’s economy, and altering portions of the industry will likely cause significant changes in other areas, according to a report from the Commonwealth Fund.
For example, tax credits are given to health insurers, with the money then being received by physicians, hospitals, clinics, pharmacies, and other providers. Medicaid funding works similarly, with federal funding received by the state, which then pays healthcare providers.
When healthcare providers receive the funding, they are able to pay staff members, and purchase goods and services, such as equipment and an office for their practice. The vendors for those purchased goods and services then are able to pay their employees, and purchase other goods and services, according to the study.
These individuals are then able to afford bills, food, transportation, and other purchases to fund businesses.
If federal funding for healthcare is cut or reduced, it could affect the economy in seemingly unrelated areas. These losses, which will be seen with the ACA repeal, causes widespread layoffs, a downturn in the economy, and reduced state and federal income, according to the report.
The investigators found that repealing the ACA will result in a loss of $140 billion in federal healthcare funding in 2019, which would cause 2.6 million Americans to lose their jobs. By 2021, this loss is projected to rise to 3 million.
Approximately one-third of these jobs are in healthcare, but a majority of the jobs lost are in unrelated fields, such as construction, real estate, retail, and finance, according to the study.
Without a speedy replacement, economic losses on the state level will also rise. The investigators predict that there will be a $1.5 trillion in gross state products, and a $2.6 trillion reduction in business output from 2019 to 2023.
Both state and local tax revenues are estimated to plummet $48 billion during this time. Declining revenues may cause healthcare providers to offer care for individuals, but not receive compensation due to a rise in the uninsured rate.
Repealing federal tax credits alone would result in 1.1 million job losses, and $341 billion in federal spending cuts from 2019 to 2023, according to the study. Gross state products would fall by $623 billion, and tax revenues would decrease by $21 billion during this time.
Undoing Medicaid expansion would decrease federal funding by $466 billion during this 5-year period, and would lead to 1.5 million job losses, the study noted. Gross state products would decrease by $900 billion, and tax revenues would decrease by $29 billion.
Interestingly, even states that did not expand Medicaid could feel the effects of repealing this provision. There would be an estimated 338,000 jobs lost in 2019, even though these states do not receive federal funding for Medicaid expansion.
Repealing the ACA will likely lead to serious economic consequences and millions being without health insurance and employment. Prior to repealing, Republican lawmakers must look at the consequences and determine whether repealing key provisions is worth the potential economic harm, the study concluded.