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AHCA may result in nearly 1 million jobs lost, harm economy in long run, says Commonwealth Fund

The AHCA would raise employment and economic activity at first, but lower them in the long run, due to reductions in support for health insurance.

Jeff Lagasse, Associate Editor

In addition to increasing the number of uninsured, the GOP-backed American Health Care Act would greatly harm state economies, resulting in close to 1 million jobs lost country-wide by 2026, according to a new analysis from the Commonwealth Fund.

The AHCA would raise employment and economic activity at first, but lower them in the long run, due mostly to reductions in support for health insurance. Based on Commonwealth's projections, 924,000 jobs would be lost by 2026, gross state products would be $93 billion lower, and business output would be $148 billion less. About three-quarters of the jobs lost, 725,000, would be in healthcare.

While overall employment would increase during the initial months of the AHCA, the healthcare sector would experience job losses almost immediately, shedding 24,000 jobs by 2018. That would be a major reversal from current trends, the study said, as healthcare has been one of the main areas of job growth in recent years.

[Also: CMS estimates 13 million more would become uninsured under AHCA, fewer than in CBO estimate]

The estimates are based on changes in federal funding gained or lost to states, businesses and consumers. The AHCA significantly reduces federal match funding for the 31 states and District of Columbia that expanded Medicaid, encouraging them to discontinue their expansions, the report said.

And the states that have expanded Medicaid face deeper and faster losses if the AHCA is passed as is, the analysis found. Having earned more federal funds, they lose more when Medicaid matching rates fall.

Of all states, New York stands to lose the most jobs by 2026 -- more than 86,000, according to Commonwealth's estimates. Pennsylvania, another expansion state, faces about 85,000 jobs lost. Florida, a non-expansion states, comes in third with a projected 83,000 jobs lost by that year.

[Also: AHCA could jeopardize health coverage for young adults, study suggests]

Michigan would likely lose about 51,000 jobs, and in fact has a state law in place that would terminate its Medicaid expansion if the federal match rate is reduced. Even Maine, a non-expansion state with a small population, faces about 10,000 job losses.

It's likely, according to the study, that the business cycle will eventually slow down again. If that happens, the AHCA could accentuate job losses and economic contraction. Combine that with major increases in the number of uninsured, and it may well herald a period of medical and economic hardship in the U.S. Researchers said the AHCA could exaggerate both the highs and lows of the business cycle -- and recommend the government instead develop countercyclical policies that strengthen employment and the economy during times of contraction.

In late May, the Trump administration released its budget proposal, which calls for an additional $610 billion in Medicaid cuts, beyond those included in the AHCA. Such deeps cuts, the report said, would further deepen the employment and economic losses.

Twitter: @JELagasse

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