Liberal group’s study says Obamacare repeal without replacement would cost the state jobs in 2019
The Economic Policy Institute, a Washington-based non-profit research group, report looked at how the combination of tax cuts and spending cuts in the ACA would affect employment in the U.S. if it is repealed. “This report adds to the mounting evidence that ACA repeal will be very bad for Kentucky,” Dustin Pugel, research and policy associate for the Kentucky Center for Economic Policy, said in an e-mail. “Repeal would not only hurt our people, but our economy.”
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| Graphic from report. Click here to go to interactive map. |
Nationally, the report estimates that a repeal of the ACA would eliminate almost 1.2 million jobs in 2019. These losses would come from the loss of federal spending that pays for the tax subsidies people get to help pay for their coverage on the marketplace, and the loss of spending for Medicaid services.
“If this support were withdrawn, people would have less money to spend on other basic necessities like food and rent,” says the report. “Fewer dollars spent at grocery stores and other businesses means 1.2 million jobs would be lost.”
The report says that while every state would lose jobs if the ACA is repealed, the poorest and those that expanded Medicaid under the law would lose the most. It says Kentucky would lose more jobs as a share of its overall employment than any state but New Mexico.
The report says that Kentucky would lose $4.1 billion in federal Medicaid spending, or about 2 percent of the state’s GDP, while the tax cuts would only put $677 million back into the economy (largely benefiting the most wealthy Kentuckians). Thus, less money would be going into the state’s economy and fewer jobs would be created.
It also notes that 486,000 Kentuckians would lose their health insurance if the law is repealed, causing the number of people without insurance to increase by 200 percent.
“Our state’s decision to expand Medicaid and cover more people resulted in a huge increase in federal funding and the evaporation of those dollars is the primary cause of the job loss,” says the KCEP news release.
A similar study by The Commonwealth Fund and the Milken Institute School of Public Health at the George Washington University estimated that 2.6 million people would lose their jobs in 2019 if the Medicaid expansion program and the premium tax credits were removed from the ACA. The report said Kentucky would lose 45,000 jobs.
“Bivens said his job-loss estimates are lower than those in the Commonwealth study because his projections reflect potential job gains resulting from termination of the ACA’s higher Medicare taxes and its surcharge on earnings above $200,000,” Tony Pugh reports for the Lexington Herald-Leader.
Both reports note that job losses would not only come from health care, but also from construction, real estate, retail, finance, insurance and other industries.
The repeal and replacement of Obamacare remains uncertain. While the Republican-controlled Congress is working toward this goal, it hasn’t come up with a plan. President Donald Trump said this week that it may be next year before they do so.
The report involves estimates based on modeling, much like Kentucky’s Deloitte Consulting report that projected the expansion of Medicaid would create more jobs than it actually did. The 2015 Deloitte report estimated that in 2014, the first year of the expansion, it would created more than 12,000 jobs, including 5,400 in health care. But the Bureau of Labor Statistics found that health care and social assistance jobs rose by only 3,100 jobs, despite Medicaid enrollments that were larger than Deloitte projected.